Unfair competition regulations?

[Michael Huston]

We have a customer who dictates that our company must follow a certain set of rules which has regularly causes us loss of income. However, we have a competitor who said customer does not require the same rules of them. Is there some law that states that can or cannot do this?

 

[Just Blue]

We have a customer who dictates that our company must follow a certain set of rules which has regularly causes us loss of income. However, we have a competitor who said customer does not require the same rules of them. Is there some law that states that can or cannot do this?

What state?
What "rules" are you being asked to follow and why does it cause a loss of income?

 

[Michael Huston]

Iowa.
We have to follow a quality procedure where if we have a spill of material, it becomes a "critical" which forces us to shut down for a week. We can produce up to 16,000 units a day, for 4 days a week at $18.38 a piece... $1.17M loss of revenue. However, we have a competitor, where the customer has even admitted, that the same spill is not a "critical" for them.

 

[Zigner]

What US state?

 

[Michael Huston]

See above.

 

[Zigner]

Thank you for adding the name of your state.
It appears that your competitor has negotiated a better contract, likely at a lower price. You may wish to review your contract and negotiate for better terms upon renewal.

 

[quincy]

We have a customer who dictates that our company must follow a certain set of rules which has regularly causes us loss of income. However, we have a competitor who said customer does not require the same rules of them. Is there some law that states that can or cannot do this?

Why do you have this customer if this customer is regularly causing you a loss of income?

What is it that your company does that you regularly “spill” materials that require a week-long cleanup?

I agree with Zigner that this sounds like a contractual matter - and the terms of your contract apparently were not negotiated as well as your competitor negotiated terms of their contract.

 

[Michael Huston]

It's not that we need to clean up the mess, that is done in a matter of minutes. We have to do an investigation as to what happened and how we can address it. Then we have to submit that to the customer who has until the end of the week to permit us to restart.

 

[Zigner]

It's not that we need to clean up the mess, that is done in a matter of minutes. We have to do an investigation as to what happened and how we can address it. Then we have to submit that to the customer who has until the end of the week to permit us to restart.

It's possible that your operations experienced more accidental spills than your competitor in the past, causing your customer to impose this requirement.

 

[adjusterjack]

Is there some law that states that can or cannot do this?

Nope.

 

[quincy]

It's not that we need to clean up the mess, that is done in a matter of minutes. We have to do an investigation as to what happened and how we can address it. Then we have to submit that to the customer who has until the end of the week to permit us to restart.

It sounds like your company has some problems operating without regular mishaps occurring.

What has your company done to reduce or eliminate the spills?

How long are you legally committed to the contract (when does it renew or expire)?

 

[AlmostThere]

Have you spoken to your customer about appending your contract with looser controls? Will they let you cancel the contract altogether?