Mother Knows Best? U.S. Department of Labor vs. Rhea Lana’s Children’s Consignment
From stay-at-home mom to successful founder, Rhea Lana Riner of Rhea Lana’s Children’s Consignment found herself catapulted into an unexpected and highly public legal battle with a major federal agency. When the United States Department of Labor declared that her business did not comply with employment laws, Rhea Lana’s entire business model was at risk. How did a loving mother who built a grassroots enterprise to help her family and community become the target of a federal agency? This incident examines how the founder of a small business responded when the federal government challenged the foundation of her business model. The critical incident highlights the important decisions she made under pressure and explores how her actions illustrated both transformational leadership and crisis management.
In completing this assignment, students should be able to:
1. Evaluate the business owner’s leadership in navigating a federal investigation and resulting crisis by applying a crisis leadership framework to assess the impact on the firm and franchisees. (LO1)
2. Identify how elements of transformational leadership are demonstrated by the owner, using Bass’s four I’s (idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration). (LO2)
3. Analyze how Rhea Lana’s definition of volunteers compared to the U.S. Department of Labor’s definition of employees and explain how this affects the company and its public image. (LO3)