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Comment by themgt | Hacker News Reader

> In at least some cases, Hampton Creek lumped in expenses related to buying its own products with wages paid to contractors, according to five former workers. All five said money they were given to buy jars of Just Mayo were treated as taxable income, making them liable for a higher tax bill than their actual earnings would require. One former contractor provided H&R Block tax records showing this to be the case. Another Creeker asked the company in an e-mail to separate the expenses from taxable income. But the request was ignored, the contractor said. Hampton creek declined to comment about the alleged practice.

Sketchy and unacceptable

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Worse than sketchy - it's fraud. People should go to jail for this.

That's a bit extreme. Non-violent crime and all. A fine perhaps.

I'm not so sure. It is obviously fraud, and couldn't appear not to be that way for the perpetrators.

So if they only face fines it makes sense for them to weigh up the potential gains against losses - and its not just flat cash.

On top of that bear in mind that high sales figures will allow them to grow faster - you can't fine growth very easily.

Defrauding investors is a serious crime. Think of the widows and orphans and their pension funds. :-)

Lots of non-violent people go to jail for marijuana use as an example... Lots of violent destructive people never see jail -- you know the kind of people that forcefully take homes and money from people with the help of the sheriff because they knowingly sold homes to them that they couldn't afford..

This is the worst argument, though, if your point is to argue that these people ought to be in prison. Many non-violent crimes that people go to jail for are activities which should never have been made into crimes in the first place.

And if you extend this out, you start to wonder just how many non-violent crimes ought to be punishable with prison. The shoplifting example, for instance, might be something that should only be a civil penalty rather than criminal, as long as it isn't armed robbery.

It's hard to know where to draw the line, but if you want these people to go to prison, then don't highlight crimes that the majority of Americans now think shouldn't be crimes.

I'm willing to bet you'd put a shoplifter in prison for stealing a computer. This type of fraud is a much bigger theft.

I'd agree if it was just defrauding investors (assuming they valued the company based on this and had no knowledge of it) or the stores (assuming there were contracts forbidding it). But they also screwed their employees by paying out the expenses as salary. Personally I'm a bit less forgiving when it comes to employers defrauding employees. The power disparity and all.

Almost anyone in a highly competitive market doesn't play by the rules.

Isn't it sketchy when egg-carton has a chicken freely roaming the grass on it?

Isn't it sketchy to write cage-free when the chicken is in a dark large container clumped together with hundreds of other chickens?

They are selling a product that has to compete with billion-dollar businesses that already have plenty of sketchy and untruthful marketing.

They spent a meager 77k on this and somehow that is unacceptable.

It's just the same if not less worse than what their competition does.

It's sketchy to call egg-free-white-flavored-oil-mix Mayo. It's sketchy to put a giant egg on your egg-free mayo.

"While Just Mayo is egg-free, Hampton Creek Chief Executive Josh Tetrick also emphasized that it doesn’t use the term “mayonnaise,” only “mayo.”"

It's mayo, not mayonnaise you silly consumers.

http://www.wsj.com/articles/just-mayo-reaches-agreement-with...

edit: You know, of all the things I could comment I talk about eggless f'ng mayo. I wish I could delete this :)

I did mention that the sketchiness is at least on the same level.

In my opinion, sketchiness of the billion-dollar egg-dairy-meat industry is far above Hampton Creek marketing.

Yeah, I wouldn't disagree with that though I'm far from knowledgeable.

Meh. Mayonnaise is mostly emulsified oil anyway. The egg helps emulsify it and adds a bit of flavor, but it ain't like you're eating much egg on your sandwich or salad.

Which is fine; oil is tasty. I'm sure Just Mayo tastes fine.

The misleading marketing (trumpeting health benefits or - like our parent post - less animal cruelty) is fairly ridiculous though.

> The misleading marketing (trumpeting health benefits or - like our parent post - less animal cruelty)

If the product truly is free of animal products, then it is most certainly reducing animal cruelty compared with mass-farmed chicken egg mayo. Ethics aside, that is an objective fact.

Not to nitpick but how do you define animal cruelty? For instance, wouldn't increased farming lead to additional erosion and destruction of habitable land for many creatures? I've always heard that simply reducing the amount of animal products does not always correlate to an increase in benefits for wildlife. I'm asking this legitimately because I am ignorant about it.

Eggs in commercial products either come from free-range, barn, or cage chickens. The vast majority are from caged chickens, although this is slowly changing. Caged chickens are locked in a tiny cramped cage, sometimes strapped down with their beaks removed, and are usually pumped full of chemicals.

That's pretty fucked up, the only way this could not reasonably be considered cruelty is if you assert animals have no emotions and science seems to disagree with that notion. Free range is much better, the chooks can roam around in the open doing chicken stuff. I eat free range eggs.

Environmental damage from increased farming is only a major factor where specific habitats are being destroyed, eg Palm Oil in Indonesia. Even then, it's a lesser evil than directly harming individual creatures.

The largest producer of mayo in the USA and UK, Hellman's, uses only free-range eggs

> Ethics aside, that is an objective fact.

It's actually not an objective fact. Compare two scenarios:

10 acres of rainforest were clearcut to grow palm oil to make the mayo

1/2 acre of grassland in Iowa that was previously used for corn is allocated to raise pastured happy chickens, rotated with market heirloom grains. They are allowed to live out their natural life, and are fed even after they stop producing eggs.

Which of those scenarios has more animal cruelty? In one situation you are essentially committing genocide of an entire microecology, in the other you are giving some animals an incredible life, and eating part of their waste stream, eggs which are not necessary for their survival or happiness, and in fact are over-budgeted in their genetics to allow for predation.

Veganism is an OK heuristic for animal cruelty, but it's far from perfect. It's often better than nothing, but a vegan Whole Foods diet may well cause more animal harm than someone living near the poverty level in, say, Korea, eating some animal products, but also making much more efficient use of land. Vegans love to pretend land use doesn't matter, but land use = animal displacement.

Eating more plants can be a great way to reduce cruelty. But Vegan\ism\ as a hard rule is more about religious purity than it is about animal cruelty.

Signed,

Someone who ate entirely vegan today and most days

Just Mayo does not include palm oil

While it might be a fun thought experiment to find situations where a non-vegan dish includes less animal cruelty than a technically vegan dish, for 99.99% the people reading this and in 99.99% of the real world situations they ever be in, choosing the vegan dish will mean choosing significantly less animal cruelty.

A common pro-vegan argument is actually less land use for growing feed crops for raising livestock.

I never said Just Mayo includes palm oil.

And I'm not really impressed by your made up statistics. Again, if you actually cared about animals you would actually care about the numbers, and not just make up fake percentages to make your decisions seem better.

It's not hard to find vegan diets that destroy more habitat per calorie than many meat-based diets. Look at hunting for example, which is often a net positive for animal habitat.

You may be interested to learn that mayonnaise is one of the most highly regulated foods in the US. When your product consists of ingredients as basic as eggs, oil, and vinegar/lemon juice, the name "mayonnaise" loses its meaning very quickly once corners start getting cut (aka the profit motive to reduce costs).

what you are saying is known as the "fallacy of relative privation." yes, it's not as bad as another imaginary company's potential trespass, but that's neither here nor there.

I'm just saying it would be stupid of Hampton Creek to play by the rules. They don't have the money and they don't have the long standing tradition of their competition's products.

It's sketchy because the alleged actions are basically tax fraud. It's also unethical because Hampton Creek were taking money from the pocket of the contractors because they were making them pay income taxes on money they didn't actually earn.

Did you actually read the parent comment? This goes way beyond any deceptive marketing practices.

For the record, I'm one of HN's many (oft mocked) libertarians, but even as a hands-off kinda guy, this is a step too far. They "laundered" the money through their contractor's pay, because they didn't want it to show up on their financial statements.

So it's not the deceptive marketing (you're right that this is more or less par for the course), it's the lies and fraud they allegedly committed to hide the deceptive marketing.

it is not tax fraud, it is fraud on the employees and investors. What they did was allowed by the IRS but they lied to the employees and investors about doing it. If a company forces you to buy a uniform with your own money that is legal, if they then decide to give you bonus for the exact amount the uniform costs that is also legal. The fraud is that it was not told to employees that it would be done that way, it was told they would be reimbursed for the expense and they did this to hide the reimbursement which should be investigated by the SEC

Not the SEC's jurisdiction. Probably the DOJ.

Likely also the FTC

It's not really clear that anyone was criminally defrauded. The investors could opt to sue in civil court though.

It probably largely depends on the state but I wouldn't be surprised if it's not legal to require an employee (contractor or otherwise) to make purchases like that out of pocket. There's a world of difference between requiring a uniform or professional tools and buying hundreds or thousands of dollars worth of your product.

I buy the explanation on checking quality. This is a big problem with packaged foods from grocery stores, especially if your product is new. Maybe demand padding was a partial motivator but hardly the only one.

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