This summer has seen quite the tragedy and scandal. Two of the biggest crises in the past couple of months have been none other than the Paula Deen racial scandal and the Lac-Mégantic tragedy and the horrific crisis management from the railroad company responsible, Rail World Inc. Since new developments have emerged in both crisis cases, I thought I’d provide you with a little update on each of them.
The Paula Deen Racial Scandal
It has been ruled, by a federal judge, that former employee, Lisa T. Jackson, was nothing but “an accidental victim of the alleged racial discrimination” and therefore is not to be protected under federal law for her racial discrimination charge against Deen. Although she will not be able to pursue Deen for these racial discrimination charges, she will still be pursuing Deen’s brother, Earl W. Hiers (a.k.a. Bubba), for sexual harassment in the workplace.
Although Deen will not be prosecuted for her racist tendencies, this does not mean that the crisis is behind her. As we say often, there are two courts that organizations are judged by: the court of law and the court of public opinion. Unfortunately for Deen, the way that she chose to manage the crisis as it unfolded hurt her in the court of public opinion. Because of this, she will have a long road ahead of her in rebuilding her reputation to what it once was. I’m not saying her career is over – she still has a number of loyal fans and advocates on her side – but she does have her work cut out for her.
I look forward to continuing to watch this case as time goes by and seeing how quickly and how well Deen does or does not recover.
The Lac-Mégantic Tragedy and Consequences for MMA
A Quebec judge has ruled that Montreal, Maine & Atlantic Railway Ltd (MMA), a unit of Chicago-based Rail World Inc., is responsible for cleaning up the 5.7 million liters of spilled oil that resulted from their derailed train exploding and killing 47 people in Lac-Mégantic earlier this summer. This ruling was made due to the fact that “the bills were not being paid [and] there was worry as time went on,” said Quebec Environment Minister, Yves-Francois Blanchet. “The citizens of Quebec are not the ones that will have to pay for this,” he continued.
With an estimation of $200 million in damages, company assets surmounting to $17.9 million and insurance that amounts to only $25 million in liability insurance, MMA was ordered to cease operations in Canada, since they no longer have the “adequate insurance to continue to operate in the country in the aftermath of the Lac-Mégantic disaster” (Financial Post). Quebec Superior Court judge, Justice Martin Castonguay, accepting MMA’s motion for creditor protection in Canada and the U.S. “He said without such protection, there would be “judicial anarchy” with multiple lawsuits happening in various jurisdictions as hundreds of individuals and businesses seek redress,” (Montreal Gazette) and the victims of the disaster are to be included as creditors.
Since the beginning, MMA has proven to be terrible crisis managers (something that is reprehensible considering the risky nature of their day-to-day business). They lacked quick reaction and response, showed a lack of true concern, care and sympathy for the victims, and have been very slow to move and take responsibility. I’ll continue to watch as this crisis moves along, but I can say now that MMA is doomed. The tragedy in itself was enough to bring down a company financially, but the lack of compassion, response and much needed ACTION has dug their grave 100 times deeper and 100 times faster.
Image credit: Kevin Bennett | BDN
Author of Crisis Ready: Building an Invincible Brand in an Uncertain World, Melissa Agnes is a leading authority on crisis preparedness, reputation management, and brand protection. Agnes is a coveted keynote speaker, commentator, and advisor to some of today’s leading organizations faced with the greatest risks. Learn more about Melissa and her work here.