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gfors gfors
 
January 28, 2009 03:45 PM

Should my friend blow the whistle on his employer?

A large international high 9 figure company is forcing employees to forfeit their company cc reward points. The company policy book states in unambiguous terms that points are to be accumulated for use in corporate travel only. The cc's reward program website is crystal clear in it's consideration of this practice being fraud.

I don't believe the employee protection to be strong enough in the jurisdiction where he works, he could easily be fired for being a 'trouble maker' as the company has demonstrated it's willingness to fire those who step out of line.

Poor guy is like a beaten dog working for this company and it bothers me to say the least.  What advice would you give him?  Is this worth it?  Should he just be happy to have a job? 
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ssharon ssharon
 
January 28, 2009 04:05 PM
In this market I would say be happy to have a job. Then again, there are a lot of companies failing that I think deserve to fail (I'm thinking CEOs being over paid and some car companies that just don't get it) and so I don't like the idea of letting them get away with this.

Calling the CC company seems like the easiest way to bring the issue to someone's attention other than someone in the company. Whether that would clear your conscience enough is a personal matter though.

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gfors gfors
 
January 28, 2009 04:19 PM
let me take this opportunity to say i love what you did with the purple box.

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ssharon ssharon
 
January 28, 2009 04:33 PM
Thank you!
If you like the purple box I wonder how my answer got marked as not helpful . . .

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djscram djscram
 
January 28, 2009 04:34 PM
Way back in law school, in Tax class, the point was made that Frequent Flyer miles and other reward programs really belong to the employer, and should be taxed as income if transferred to the employee.

If the credit card company wants the benefits to go to the employee, I don't see how they make that into law just be including it into their terms of service. Credit card companies don't make law.

That's assuming that the entire cc bill is for work-related expenses. If the employee is also using the cc for personal expenses, then sure, the rewards should go to the employee.

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gfors gfors
 
January 28, 2009 05:36 PM
"the point was made that Frequent Flyer miles and other reward programs really belong to the employer," - this is the type of info im looking for, do you have sources?

contractual agreements between cc company and cc holder in effect make legally binding rules - perhaps not law per say. ?

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djscram djscram
 
January 28, 2009 06:17 PM
Well, it looks as though the IRS has decided not to tax frequent flyer miles (http://taxprof.typepad.com/taxprof_blog/2008/07/the-tax-treatme.html) unless they can be converted into cash. But my understanding is that this was more a decision based on the fact that the miles are often hard to convert.

Meanwhile, there is some State law out there that for state employees, the state owns the miles: (http://www.fpd.finop.umn.edu/groups/ppd/documents/policy/frequentflyer_pol.cfm)

As to your question, contractual agreements are enforceable under contract law, but that doesn't apply to third parties and doesn't create fraud, which is a crime, not a contract violation. If anything, the employee is at fault for agreeing to a contract with the credit card contract which violates his existing contract with the employer.

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gfors gfors
 
January 28, 2009 06:33 PM
"If anything, the employee is at fault for agreeing to a contract with the credit card contract which violates..." - indeed. There in lies the problem, this is being issued to the employee as a matter of company policy. As originally stated, a fear of being targeted as troublesome exists in challenging the policy.

Also note that the cc company, unlike the airline model, has 2 account types (cardholder payer vs corporate single payer) , and this situation has arose from a gaming of the system, so to speak.

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drmatt drmatt
 
January 28, 2009 04:35 PM
My question would be who your friend signed a contract with first - the company or the credit card. I'm going to go with the assumption that it is with the company. Therefore, the first contract was with the company that any points would be used for the company. If your friend signed another contract with the credit card that conflicts with the first contract, then either you friend did "bad" (because, he couldn't sign a second contract that conflicts with the first contract) or the second contract is void because of the first contract.

Now... the credit card MIGHT be saying... if you have a PERSONAL credit card, a company can't force you to give over the points to your company (for company expenses). But this is a company card, so, I can see it logical being the company's points.

To answer your question directly... I don't see what the hubub is about and there doesn't seem to be a "felony" sized infraction here, so, it might not be a good time to "blow the whistle".
Source(s):
I watch a *LOT* of Judge Judy and consider myself an expert in contract law because of her guidance. Okay.... Maybe not an "expert".


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gfors gfors
 
January 28, 2009 05:26 PM
the employment contract status is a good question, he has been promoted all the way up from bell hop (so to speak).

the cc company has two classifications for company cards one is personal company card, so the employee is issued the card through the employer, however the employee is responsible claiming expenses, getting reimbursed and making payments. bills go to the individual. If payments are late the employee is responsible for interest charges. the cc company encourages employees to use their card over other payment options with points program. this is costly to do, but its an effective way to generate loyalty when it's the INDIVIDUAL deciding the payment method. This is the main (perhaps only) reason points programs exist.

the other scenario is a single payer, who negotiates on volume and the CC can cut deals to large corp customers - there are no points awarded with this type of card because there is no need, employees will always choose the company card, otherwise they are just buying stuff for the employer, customer loyalty is a non issue.

with the credit card lobby as it is, i would not be surprised to learn this was indeed a felony, but i know what your saying.

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vandal913 vandal913
 
January 28, 2009 04:43 PM
It seems to me the credit card company probably has this 'policy' because they don't like the idea of various individuals pooling their rewards points to an organization, giving the company or organization to quickly accumulate large amounts of points and redeem for high dollar items in a shorter period of time.

Let's face it, credit card policies are rarely made to benefit the user of the credit card. Would the CC company prefer to have a bunch of users points grouped together, allowing the opportunity for redemption more quickly, or have those spread out individually, so that it takes that much longer for the points to accumulate to a level where it would be 'worth' obtaining rewards for them?

I hope my logic here makes sense. Either way, I agree that the points belong to the company, not your friend. He's not paying the bill. He doesn't seem to have any legitimate claim to blow the whistle on his company, instead he should be raising questions about the credit card company's selfishly fabricated policies.

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