The value of a company's public image is hard to quantify. For companies that sell directly to consumers, damage to a reputation can be quite costly. Case in point -- widespread negative publicity connected to a recent episode at Wendy's
It might seem that business-to-business operators are somewhat less vulnerable to such shocks, given that they operate primarily outside public scrutiny. Logic suggests that the primary concern for such firms should be their reputations in the eyes of their clients, who, after all, are the ones who pay the bills. The public, meanwhile, doesn't even need to know that business-to-business outfits exist.
But such business-to-business assumptions appear to be too simplistic, if contract research company Covance
Still, PETA should not be dismissed lightly. It is organized and vocal. The interest group has filed a complaint with the U.S. Department of Agriculture requesting that Covance's Virginia laboratory be shut down. Further, PETA's very public claims could also make pharmaceutical companies cautious about dealing with Covance for fear of being drawn into the melee and suffering a backlash from drug consumers.
Covance, in turn, has filed a lawsuit against the animal-rights group and a PETA member who worked undercover at the company. The Covance suit claims fraud, contract violation, and conspiracy. For investors, this is definitely a case worth watching.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
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