of 24 million customers, forcing the
company into a period of damage control
as it rushed to inform those affected,
assure them that it was taking the most
aggressive steps possible to guard against
further attack and, most importantly, keep
their business.
After navigating the legal side of an
initial investigation into the breach,
Chou had to deal with the 10 class action
lawsuits that followed. At press time, those
still-pending suits had been filed in several
jurisdictions around the country, including
Nevada, Florida, Massachusetts and
Kentucky, and the idea was to rein them all
into something more manageable.
“We filed a motion to consolidate
them,” she says. “That’s a pretty standard
practice, and we’re still at the early stages
of those litigation matters. We’ve never
been involved in a class action lawsuit, and
10 is obviously unique. It’s something we’re
incredibly focused on.”
New legal challenges related to
litigation also mean looking to outside
counsel for solutions.
“We don’t have a go-to,” she explains.
“We select [outside counsel] depending
on the facts and circumstances of each
case, where it’s located, the history and
experiences of available counsels, and their
expertise in the particular subject area of
litigation. We will evaluate that each time.”
Along with an enormous customer
base, Zappos now faces other challenges
related to its speedy growth from startup
to billion-dollar business. The company’s
2009 acquisition by Amazon was huge,
bringing with it a contingent of new
overhead considerations that come with
being part of a publicly traded corporation.
Nonetheless, Chou says Zappos’ treasured
autonomy hasn’t been affected too deeply
by the deal.
“Amazon acquired us partly because
we do think about things differently from
them. … They were looking at us as a
completely different way to approach the
online retail business. We do still pay our
own bills, have our own accounts payable
department, our own finance team and
accounting team; Amazon has allowed us
to run all other operations as well. We’re
a subsidiary, so we end up having to be
subject to a lot of those regulations. …
There’s a lot of coordination [with certain
patent cases, intellectual property issues
and lawsuits on which Zappos and Amazon
are co-defendants, but] they’ve generally
left us alone.”
That’s a fortunate thing for Chou and
her colleagues, given the workplace
unorthodoxy they’ve learned to love. But
even without the outside micromanaging
to contend with, the question remains: How
do you keep fostering that prized feeling of
“family” among a workforce that’s grown
vastly larger than what a typical employee
lounge can contain? The answer: Find a
bigger room.
SUPER LAW YERS / BUSINESS EDITION 2012
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