Per a recent Bloomberg report, CenturyLink Inc.’s (CTL - Free Report) former employee Heidi Heiser filed a lawsuit in the Arizona State Superior Court claiming that the company fired her on invalid, unreasonable and unethical grounds. Due to such controversies, shares of CenturyLink lost 4.56% at $25.72 on Jun 16.
As we know, CenturyLink is very close to completing its merger with Level 3 Communications, after the overwhelming state approvals from more than 15 states and territories and also from the shareholders of both the sides. The filing of the lawsuit had a considerable impact on the shares of Level 3 Communications Inc. (LVLT - Free Report) , which were down 2.77% to $62.03.
Heiser stated that she was being honest and open about the company’s malfunctions and illegal business activities, which involved the increasing of sales by deceiving customers. She had even attempted to inform CenturyLink’s Chairman and CEO (Chief Executive Officer), Glen Post, about such illegal operations, during a company-wide question-and-answer session held on an internal message board.
With regard to the company’s high pressure sales department, Heiser had discovered that many false accounts were being activated without customer consent in order to meet the sales goals and incentives. This led to heavy payments by the customers in the form of unauthorized charges. The accuser became concerned about the relativity between CenturyLink and the Wells Fargo incident last year. She reported the issues to her supervisors, who ignored the complaints and asked her to stay silent about it.
On an additional note, she mentioned that the company’s malfunctioning call distribution system led to dropped calls for which she was held responsible and was fired. Heiser used to work from her home for CenturyLink as a customer service and sales agent from Aug 2015 to Oct 2016.
On a similar note, Comcast Corp. (CMCSA - Free Report) , the leading cable multi-service operator (MSO) in the U.S., is said to have reportedly lost against TiVo Corporation (TIVO - Free Report) over a patent licensing dispute. Again, DISH Network Corp. (DISH - Free Report) was penalized by the U.S. District Judge for the Central Illinois District, Sue Myerscough with a fine-cum-damage recovery cost of $280 million, to be paid to the U.S. government and four states, in relation to the eight-year-old ‘robocall’ telemarketing lawsuit.
CenturyLink boasts to position itself and its employees to the highest ethical standards and claimed to have "an Integrity Line in place, 24 hours a day, seven days a week" for any such issues. CenturyLink confirmed that Heiser did not report to the Integrity Line, previously. Moreover, their leadership team was not aware of the matter until the lawsuit was filed. But now when they know it, they claims to have seriously started investigating this matter.
Sales departments or sales-related jobs, in any organization are always target based. If their related sales professionals are unable to achieve the mentioned target by the company, then their position is threatened. Hence, they are always in a tight spot, which prompts them to go for shortcuts in order to retain their jobs.
We believe it is the companies who should be setting realistic and practical targets, which are viable to be met by their employees without breaking laws. The companies should be thoughtful about their employees’ well-being and should not cut their daily earnings without a valid reason. This is because healthy and mutual understanding between a company and its workers helps enhance a company’s prospects.
Price Performance and Zacks Rank
CenturyLink is the leading regional wireline service provider of communications and data services nationwide and offers hosting, cloud, and information technology services. Currently, CenturyLink has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past one month, share price of CenturyLink inched up 8.84% while the Zacks categorized Wireless National industry fell 7.08%.
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