CASE
Tight Shoes
Nosso Cliente
Retail company of shoes, bags and accessories.
Desafio
In 2016, the height of the 2014/2018 crisis, the retailer suffered a drop in sales and, therefore, drastically reduced the volume of orders from its suppliers. As a result, some of them closed the factories overnight, laying off much of their staff. Although there is no provision for contractual exclusivity with such suppliers, in practice, these industries served almost exclusively our customers. Also, overnight, labor lawsuits with very high values began to appear, citing our client as joint and several liability for the labor liabilities of the supply chain.
The client initially sought out the best labor lawyers in the country, but the risk of garnishment in the company’s bank accounts was clear and imminent.
Nossa Solução
We believe that the first step in resolving any dispute is to understand exactly where interests are misaligned. In this situation, interests were perfectly aligned between suppliers (demobilizing a factory operation transferring labor costs to the customer), employees (pleading values from the past with zero credit risk), labor lawyers (harassment at factory doors to generate a ad exitum fee machine) and labor judges (in small counties, labor judges saw “social policy managers”).
Even in the remote hypothesis of “success” at the end of the labor lawsuits, it is not difficult to imagine that, after 10 years of a long battle in the courts, the customer would hardly recover his credit against suppliers. Not to mention the energy, focus and fees of employers’ lawyers spent on the journey. It was clear that in this game there was only one loser.
The solution seemed to us to be far from legal books and labor laws: on the contrary, the conciliation of interests would only be achieved by ethical negotiation and common sense. Within this scenario, we exclude any conversation with labor lawyers – it would also be
impossible to open a direct channel with employees to understand the legitimacy of the claims. We went straight to the table with the suppliers. We had a legitimate interest in tailoring a solution that would not shake the business relationships built over many years.
In the end, the reconciliation came with the payment of a fixed indemnity by the client to each supplier (infinitely less than the potential risk of the rain of labor lawsuits), which would be in charge of making agreements with its direct personnel in the labor court. The supplier that made good agreements could keep the difference between the compensation paid in the agreements approved by the court and the remaining balance. All the suppliers made great deals, the dismissed staff received only fair and due amounts and quickly and commercial relations were being reestablished with the improvement of the economy.