Business Ethics Case Analyses: Nation wide recall of Leafree Sanitizer (2020)

  After delving into the world of hand sanitizer for my case on LeaFree hand sanitizer regarding their
packaging, I found many pitfalls. I was able to find a variety of sources that covered my topic, along with other hand sanitizing brands that are facing similar heat. Although there is very limited information on Corgi Med as a company, I do know that they manufacture products from Yangzhou Olande Cosmetic Co. Ltd. (China)   Corgi Med released their LeaFree Hand Sanitizer in summer 2020 but quickly recalled it due to the packaging that stated “edible alcohol.” The negligence from their packaging could have potentially led to extreme medic
al conditions. Medical conditions such as a lack of coordination, slow or slurred speech, drowsiness, coma and death
   Due to Corgi Meds quick recall on the mislabeling of their sanitizer, there have been no filed lawsuits. However the mislabeling was negligent and inhumane. I will analyze the LeaFree hand sanitizer case according to the theories of Individualism, Utilitarianism, Kantianism and The Virtue Theory to determine whether the company was acting ethically or unethically. According to Individualist, Corgi Med was ethical in its action with the goal to gain profit. However from a Utilitarian standpoint the mislabeling of the product would be considered unethical because it could have harmed stakeholders. Kantian ethics would also disagree with Corgi Med because the harmful mislabeling of their product would not pass the categorical imperative test. Kant would say that Corgi Med benefited at the expense of their stakeholders. There is a possibility that Corgi Med labeled the product “Edible” to make it more marketable. Virtue theorists would also state that Corgi Med is unethical since their actions do follow their main virtues that are courage, honesty, temperance and justice.

Controversy
Early summer of 2020 in the heights of the coronavirus pandemic, when hand sanitizers were on backorder, Corgi Med launched to market a hand sanitizer Manufactured by Yangzhou Olande Cosmetic Co. Shortly after being on the market Corgi Med made a voluntary recall on September 3rd, 2020. The company’s reason for announcement, according to the FDA article, was because the product was labeled as “Edible Alcohol” The FDA along with several other sources stated the serious health risks that can arise due to the mislabeling. Alcohol toxicity such as drowsiness, lack of coordination, coma or death. NBC, another news source states “toxicologists say methanol should never be used in hand sanitizer, because it could poison people who drink it as a substitute for other forms of alcohol.” It is a critical time in the world of health and many people rely on safe sanitizers and disinfectants. Corgi Med jeopardized the health, safety and trust of their consumers by mislabeling their product. Although there is no current evidence that supports a lawsuit against Corgi Med, is this case still deemed ethical?

Timeline of events

Stakeholders
The Stakeholders in my Corgi Med case include Yangzhou Olande Cosmetic Co. (the manufacturer for Corgi Med) Corgi Med itself, and their direct consumers. Direct consumers would be considered family members, friends, kids and anyone else that used the product. These direct consumers are the stakeholders being treated unethically. Consumers of Leafree products may not understand the severe health risks that could arise from ingesting sanitizer products. Young children who accidentally ingest sanitizer products and adults who drink these products as an alcohol substitute are most at risk. Yangzhou Olande Cosmetic co, the manufacturer for Corgi Med would also be considered a stakeholder because of profits lost from the recall. There is also potential that Corgi Med changes manufacturers in the future.
Individualism
Milton Friedman's theory of Individualism states that the only goal of the business is to profit within constraints of the law. Individualism starts with the fundamental premise that the human individual is of primary importance in the struggle for liberation.
Using this theory to analyze my case, I can conclude that an Individualist would believe that Corgi Med followed the theory because their primary goal was to profit. Corgi Med used specific labeling that would perhaps make their product more marketable and in return, profitable. Although the product being labeled “Edible” is misleading, Corgi Med is still within bounds of the law.
The main concern in my case was the potential health risks that could arise from ingesting the sanitizer. Corgi Med voluntarily recalled their product and the FDA put out a statement of risk, stating “Ingesting hand sanitizer, which is intended for topical use, may result in alcohol toxicity.” Along with several other symptoms. (FDA.gov)
Utilitarianism
According to An Introduction to Business Ethics, utilitarianism at its most basic structure is to maximize happiness for all. ( Desjardins 35) In other words the action would be considered right insofar as it promotes happiness, and that the greatest number should be the guiding principle of conduct.
With consideration for all, the stakeholders that were most affected were the consumers. “Utilitarian's tell us that we can determine the ethical significance of any action by looking to the consequences of that act.” (Desjardins 29) A utilitarian would view this case as unethical because consumers were subjected to serious health risks due to the mislabeled product. If Corgi Med had done their research they would have understood the negative effects of their action. Corgi Med violated the stakeholders approach by putting to market a potentially harmful product.
Kantianism
Kantian ethics was developed by the philosopher Emmanuel Kant and is primarily focused around duty rather than emotions or end goals. All actions are performed in accordance with some underlying maxim or principle, it is according to this that the moral worth of any action is judged. The four principles of Kantian ethics is to act rationally, to respect people and to be driven by goodwill and duty, looking to do the right thing. The categorical imperative is the primary formulation of Kant’s ethics and tests whether an action is permissible or impermissible. Permissible means that the action is accepted morally and if it is impermissible then it is therefore wrong to do. (Case Manual, Heather Salazar) A formulation attached to the categorical imperative is The Formula of Humanity. This formulation of the CI states that we should never act in a way that we treat humanity, whether in ourselves or in others, but always as an end in itself.
The case regarding Corgi Meds hand sanitizer is considered impermissible according to Kant's ethics and therefore does not pass the CI test. By purposefully labeling the product “Edible” to make the product more marketable, the company was putting consumers' health at high risk. Corgi Meds' case does not pass any of the four principles when they brought their product to market. However, when Corgi Med made the decision to voluntarily recall all LeaFree sanitizers, they then conformed to the principles of Kantianism.
Virtue Ethics
Virtue ethics is one of three major approaches in normative ethics. Virtue ethics is person rather than action based: it looks at the virtue or moral character of the person carrying out an action, rather than at ethical duties and rules. A moral person is someone who possesses virtue and shows it in his or hers actions. The admirable character traits are called virtues, their opposites are vices. Typical moral virtues include courage, temperance, justice, prudence and truthfulness. Examples of vices include dishonesty, greed and selfishness.
Applying the Virtue Theory to the Corgi Med case, I don't believe the company was acting courageous because they put their consumers' health at high risk. However, it was courageous of the company to do a voluntary recall on their product after the fact. Honesty was applied in this case because Corgi Med announced their recall publicly and was willing to take back all of their mislabeled products. The third virtue is temperance, which is defined as moderation or self restraint. I don't believe Corgi Med met reasonable expectations when putting the sanitizer to market. Corgi Med was not just for putting their consumers' health at risk to make their product more marketable. However, Corgi Med showed empathy and compassion by voluntarily recalling their product. The last moral virtue is prudence. Prudence is the ability to be wise in practical affairs, as by providing for the future. Corgi Med was far from wise in this case therefore they lack this virtue.
Action Plan

Safety alert

Although there have been no lawsuits against Corgi Med for distributing a sanitizer labeled “Edible Alcohol” There is still great concern. The primary concern being the health and safety of their consumers. Corgi Med was negligent by bringing a product to market that poses health threats just to make their product more profitable. Thankfully on September 3rd 2020 Corgi Med announced a voluntary nationwide recall for their LeaFree Sanitizer. Corgi Med did the right thing by recalling its mislabeled product, but there are some procedures I would suggest so that ethical issues do not arise again.
The first suggestion I have for Corgi Med, that I believe is the correct or ethical thing to do, is to send out a statement of apology. Consumers bought directly from Corgi Med which means they have their contact information from purchase. Corgi Med could also release a public statement of apology if direct contact is an issue. This would show consumers that Corgi Med is empathetic and has a customer first attitude. Corgi Med as a company would also benefit from a statement of apology because it would give them a chance to preserve their consumer relationships and avoid negative buzz. By trying to mend and preserve their client relationships, it will in turn make Corgi Med more profitable in the future.
The second suggestion I have for Corgi Med is to recreate a product label that is FDA approved. Corgi Med failed to do this by mislabeling their LeaFree sanitizer. Although Ethyl is the principal ingredient in alcoholic beverages like beer, wine or brandy, it is extremely dangerous to consume. During May 1- June 30, 15 cases of people reportedly ingesting alcohol-based hand sanitizer were hospitalized. Of those 15 cases, 4 patients had died. Corgi Med needs to create a strong warning label in order to prevent serious injury. Along with adding a warning sign, the company should also include the manufacturer on its packaging. According to an article by Frontier Label, “The manufacturer of the product should be listed along with the distributor.” In this case LeaFree did not post the manufacturer. If Corgi Med were to use my suggestions, they would in turn be on the way to creating an ethical brand with honest products.
Isabella Lake- Western New England University