THE CHAPARRAL GOES VIRAL
You are on the management team at “Texas Chaparral,” a restaurant chain with 34 locations
in NY, NJ and Pennsylvania. Texas Chaparral was an instant success when it was started two years
ago, and the chain has grown quickly in the last year, in part due to a TV ad that went viral on
YouTube because it contained a very catchy musical jingle with really cool images.
But now there is a problem. The problem started last month when the Health Department
in New Jersey cited three Chaparral restaurants for minor food-handling violations. Chaparral
paid a $3,000 fine. The citations and the fine are, in a sense, public, because one can find them
on the NJ Health Department’s web site -- if one knows where to look. But hundreds of
restaurants receive similar citations each month, the data on the web site is not easily searchable
and experience has shown that few folks check the State’s site. When the citations were issued,
your company suspended the managers of those three restaurants, and the violations were quickly
cured. The company thought the matter was over.
Today, however, you learned that a video has been posted on YouTube by someone
claiming to be a Texas Chaparral employee. The video is a clever mash-up of the successful
(copyrighted) TV ad, including the musical jingle and images, but interspersed between video
cuts are what appear to be photos of a dirty Texas Chaparral kitchen, spoiled food, and insects
and vermin at one of the company’s restaurants. The company’s federally trademarked logo
appears over-and-over again on the video. No consumer would think the viral video comes from
your company, but still, the video is offensive and will likely quickly hurt the business.
Your food inspection team is telling you that the photos are doctored, and that they do not
reflect actual conditions at any of the company’s restaurants. There is already a rumor going
around the company that the video was made and posted by one of the suspended managers, but
you are not sure. It might even have been posted by a competing restaurant. All you know is that
the poster used the pseudonym “Chaparral Sheriff.”
There are already reporters calling from local news media, and the video is starting to get
lots of hits on YouTube.
Your management team has been asked to formulate a legal strategy for dealing with the
video. Among the subjects you have been asked to consider are how the internet affects your
company’s predicament, and what legal rights your company may have against the perpetrator,
YouTube and any reporters that try and turn this prank into a story that may irreparably harm
your business. (Note – your company already has a “Public Relations” department, and they will
handle that aspect of the solution. You are asked to focus ONLY on what mechanisms in the law
might help solve the problem; the quicker the better!).