SCENARIO:

Nicole had a 5-year-old son, Karson, who had been diagnosed by his pediatric psychiatrist with ADHD. The physician tried multiple different medications and dosages with varying results to help Karson. Some would help for a while but then stop working; some would not help at all. Frustrated after a year of medication trials, Nicole came across an advertisement for a new center called Brain Training that promised to help children with ADHD without the use of medications. It was advertised as a privately owned "mental exercise center" that didn't require a physician's referral and did not employ medical staff. Also among the advertising material was the story about the founder, John Gaffner, who overcame his own ADHD without doctors or prescriptions and how he was bringing his technique to the world. Nicole made an appointment with the center to get more information.

While there, Nicole met with Michele, the director of the center. Michele provided numerous pamphlets touting the almost 100 percent "cure" rate of their method. She even provided Nicole with what looked like a clinical study conducted by six independent doctors showing a 100 percent success rate for 10 children completing the program.

Michele said that they believed ADHD was merely a failure of the brain to balance the "primitive reflexes" with which we are all born. She discussed how Brain Training would test Karson for these reflexes at the beginning of the program and again at the end of the 12-week program, and "without a doubt" Nicole would see improvement. Michele also told Nicole that the program consisted of a series of exercises that would be conducted at the center and that Nicole would need to conduct at home. The exercises involved things like listening to sounds in only one ear at a time and doing sit-ups.

Nicole thought the methodology seemed strange but was willing to give it a shot because she was exhausted from trying other therapies. Michele asked Nicole for copies of her pay stubs because she said, "the amount we charge for the program is dependent on each family's individual income, and we don't want any family to have to go without our services just because they couldn't afford the program." Nicole felt uncomfortable sharing her pay stubs, but relented, and Michele told Nicole the cost to her would be $6,000 for the 12-week program. Unbeknownst to Nicole, Michele actually worked on a commission, in which her salary was directly proportional to the number of clients she enrolled and at what pay rate.

Nicole paid the total amount up front, and Karson began the program the following week when the initial evaluation test of Karson was conducted. That same week, Karson begin his twice weekly sessions at the center. During the first two weeks of the program, Nicole noticed a dramatic worsening of Karson's behavior. He became more violent, hitting other family members and destroying furniture. Nicole raised her concerns with Michele and stated that she wanted to stop the program and have her money refunded. However, Michele assured her that it was perfectly normal to see some "behavior dips" but that the program would work if she just stuck to it. Frustrated, Nicole left the Brain Training office without saying anything else; however, she continued to take Karson to his sessions and diligently performed his at-home exercises.

At the end of the 12 weeks, Karson was re-tested. He showed no improvement from his initial scores and, in fact, had scored even worse in two areas. His teachers at school had been complaining that his behavior had been getting worse, and he was more frequently in trouble. Nicole also continued to see Karson's behavior worsen at home. Again, Nicole contacted Brain Training and demanded a full refund as the program had not only been ineffective but had seemed to make Karson's behavior worse. Brain Training refused.

DISCUSSION QUESTIONS:

Answer each of the following questions:

1. If you were the owner of Brain Training, give two steps you would take to maximize sales while limiting potential contract damages?

2. How does the structuring of employee pay (in this case, commissions) impact whether an employee (such as Michele) could be viewed as acting unethically or in bad-faith?

3. What might be the advantages and disadvantages for Brain Training in creating a written contract for services?

4. What types of language would need to be included in the contract?

Assume, in addition to paying Brain Training $6,000, Nicole was also told to put Karson on a special diet of organic, non-GMO fruits and vegetables, gluten-free foods, and expensive vitamin supplements, all of which cost $300 per week. If Nicole wanted to bring an action for compensatory and consequential damages, what should she include in her calculations and why? Assuming Brain Training admits to a breach of contract, what might be its position on the calculation?

As an employee, in this case Michele, there can a fine line between aggressively selling your product and committing fraud on behalf of the company. What kinds of ethical dilemmas might Michele face in her job? Does it matter whether Michele believes the methodologies employed by Brain Training work, don't work, or work through the placebo effect? What ethical obligations does the company owe to its customers?