Florida Gulf Coast University Lumbar Liquidators Discussion


After watching the 60 minutes? video regarding Lumbar Liquidators, there were multiple issues with the company and its leaderships behavior and unethical practices. The CBS program investigated laminate flooring sold by Lumbar Liquidators and uncovered they were misleading their customers and were forced to pay $33 million to their investors (Weiner, 2019). This was a result of 60 Minutes learning that the laminate flooring, labeled California Air Resources Board (BARB-2) compliant, in fact had formaldehyde Their stakeholders, the people with a vested interest in the operation of the company (Stanwick & Stanwick, 2016, pp. 40-41) were fraudulently informed by Lumber Liquidators that the testing performed by a third party were compliant with formaldehyde emission standards and that suppliers that did not meet standards were no longer being sourced (U.S. Securities and Exchange Commission, 2019). This was determined to be false.

Lumber Liquidators intentionally mislead stakeholders, lied to consumers, fraudulently labeled laminate flooring as CARB-2 compliant, and compromised the health of their customers by selling laminate with six to seven times higher levels of toxic chemicals than that are safe (60 Minutes, 2018). These actions conflict with the business?s duty of Corporate Social Responsibility. This includes its legal responsibility, meaning performing in a way that is consistent with government regulations, and its ethical responsibility, or the obligation to act in a manner that is aligned with the behavioral expectations of society (Stanwick & Stanwick, 2016, pp. 52-53).

As the founder and chairman of Lumber Liquidators set the ethical culture of the business. By dismissing the comments of employees admitting the flooring was non-compliant, refusing to accept the testing methodology as valid, insisting that all products meet or exceed emission standards, in addition to reiterating that his company is not required by law to test finished products, Tom Sullivan shows that he is at best an amoral leader, but more likely immoral.


60 Minutes. (2018, October 11). The 60 Minutes story on Lumber Liquidators that led to a $36 million settlement [Video]. YouTube. https://www.youtube.com/watch?v=dWu4gO9ZhKs&feature=youtu.be

Stanwick, P. A., & Stanwick, S. D. (2016). The Evolving Complexities of Business Ethics. In Understanding business ethics (pp. 40?41). , SAGE Publications, Inc.

Stanwick, P. A., & Stanwick, S. D. (2016). The Evolving Complexities of Business Ethics. In Understanding business ethics (pp. 52?53). , SAGE Publications, Inc.

U.S. Securities and Exchange Commission. (2019, March 12). SEC.gov | SEC Charges Lumber Liquidators With Fraud [Press release]. https://www.sec.gov/news/press-release/2019-29#:%7E:text=In%20its%20response%2C%20Lumber%20Liquidators,unable%20to%20meet%20these%20standards.

Weiner, R. (2019, March 12). Lumber Liquidators to pay $33 million for misleading investors about formaldehyde in laminate flooring. Washington Post. https://www.washingtonpost.com/local/legal-issues/…

Kyle CurrySep 1 9:20pm

Reply from Kyle Curry

The 60-Minute coverage of the usage of formaldehyde laminated floorboard by the company Lumber Liquidators was a big example on the quality and way people will stick to ethical means of business, from both local businesses to the foreign suppliers from countries with much lax health standard safety protocols such as they are in the united states like with the carb 2 compliance. Their lack of integrity can be said in self-preservation and oppertunity. “Business have absorbed and made their own the lessons of environmental awareness, stakeholder management, community relations, codes of conduct, and public affairs.” (Wood, 2000) This could lead to businesses who do not want to follow normal code of ethics in places like the US.

The lack of ethical standards for their business integrity by utilizing the cheating culture, “breaks the rules to benefit… but it does refer to actions that give an unfair advantage to those who do not follow the rules established by society” (Stanwick & Stanwick, 2016) that makes its way into how an organization operates. In the case of Lumber Liquidators, their overlooking their integrity and are now facing three barriers to conducting ethically. These would be motivated blindness, indirect blindness, and ill-conceived goals. Their motivated blindness comes from their operations in the stores. Carb 2 stickers placed on flooring when these products don’t actually live up to carb 2 standards. This is directly putting consumer’s health at risk with the carcinogens. This is also allowing them to acquire bigger revenue with their ill-conceived goals using unethical actions. Their Last barrier they face is the indirect blindness, using non carb 2 compliant Chinese made boards hit their store floors and get installed in customer’s homes, regardless of the adverse health effects that comes with.

Stanwick, P. A., & Stanwick, S. D. (2016). Understanding business ethics. SAGE Publications, Inc.

Wood, D. J. (2000). Theory and integrity in business and Society. Business & Society, 39(4), 359?378. https://doi.org/10.1177/000765030003900402

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