PayPal,
Dog Food and California’s Anti-Forced Patronage Law: Did PayPal Chief David
Marcus cross a line by threatening the jobs of employees who don’t use PayPal
products?
28
Feb 2014 by Curt Surls
In
what passes for celebrity gossip in Silicon Valley, the technology press is
abuzz and atwitter over a leaked e-mail from PayPal President David Marcus to
the company’s San Jose employees. In the memo, Marcus bemoans the San
Jose staff’s allegedly tepid personal enthusiasm for PayPal products. At
other offices, Marcus noted, the staff is willing to “hack into Coke machines
to make them accept PayPal because they feel passionately about using PayPal
everywhere.” Marcus also expressed irritation with employees who can’t
“even remember their PayPal password.”
As
if password amnesia and a preference for using coins in Coke machines weren’t
bad enough, Marcus was especially incensed by those San Jose employees who did
not personally use PayPal products. “Some of you,” Marcus lamented,
“refused to install the PayPal app,” a point he underscored in the memo with
flamboyant punctuation (“!!?!?!!”).
After
urging the “San Jose PayPals” to use the company’s products, he closed with a
vague threat, recommending that employees who refuse to install the PayPal app
can go find another job.
In
the tech word, the internal use of a company’s own software to demonstrate the
quality and capabilities of the product is known informally as “eating your own
dog food” or “dog-fooding.” For example, Hewlett-Packard staff once
referred to a project using only HP’s own products as “Project Alpo.” But
did Marcus take the “dog food” concept too far by threatening the jobs of
employees who refuse to patronize PayPal?
The
answer lies in California’s Depression-era Forced Patronage Law. What is
forced patronage, you may ask? Let me illustrate the concept with a tale
from my youth.
Long
ago, in a downscale mall in a mid-sized Midwestern city, I got my first and
only retail job at a now-defunct rural-themed clothing chain called the “County
Seat.”
It
is difficult for young people today to appreciate the sartorial horror that was
the County Seat. The clothing seemed targeted at rodeo clowns or the more
fashion-forward Amish. Nevertheless, County Seat staff were forced to buy
County Seat clothing at a small discount and wear it on the job – in public!! –
as a condition of employment. The delusional thinking was that turning
the sales clerks into human mannequins would stimulate sales. This was classic
“forced patronage.”
But
that was the Midwest. Here in California, Labor Code section 450
prohibits an employer from compelling or coercing an employee to purchase goods
or services from his or her employer or any other person. The law was
originally aimed at the proverbial “company store” of the coal mine of the
remote farm labor camp. But in modern times, it has been used in class
action litigation against employers such as Abercrombie & Fitch (the County
Seat of our time) and other clothing chains which require employees to purchase
and wear the company’s fashions on the job.
So
back to David Marcus and the PayPal e-mail. Was there a violation of
Labor Code section 450? No one at PayPal, as far as I know, has been
fired for refusing to use PayPal products. And, because the statute
prohibits the “purchase of anything of value,” Pay Pal could argue that
requiring the download of a free PayPal app is not a violation of section
450. On the other hand, if PayPal employees are terminated for refusing
to purchase PayPal products, that would be a different bowl of dog food.
The
evolution of the application of Labor Code section 450 from the coal mine to
Silicon Valley shows how old statues are reinterpreted and updated for the
cyber age. There is, alas, no specific statute that protects an employee from
termination for forgetting a password. Therefore, we are all very, very
vulnerable.
