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Company Name: Xentel DM Inc
EthicScan DataBase Number: Not in DataBase
Contract Number: 04-113 (AI)

This is a Major Concern area as the company resists collective bargaining, offers limited training for staff, and has telemarketing campaign recipients who complain about pressure tactics and misrepresentation.

Xentel is not unionized. There have been some attempts to unionize staff at U.S. operations (such as St Louis and Milwaukee) and in Canada (both eastern and western Canada). Mr Platz says that the unionization effort at Milwaukee is in the doldrums, at present.

The spokesperson reports that there are 1,500 full time equivalent (FTE) staff and 250-300 administrative staff. The number of full and part-time employees has dropped from 3,000 in 2003 (2003 Annual Report) to 1,800 FTE today, which suggests consolidation and layoffs at U.S. acquisitions which were “overstaffed”. In total, some 85-90% of Xentel’s workforce are in sales (telemarketing). Call centre personnel salaries represent 50% of total expenses. No mention is made of employee counselling, flex time, or work-home balance initiatives. Normally less than two days of training are offered to new telemarketing staff, most of whom work under 30 hours per week. Call centres typically operate from 8:30 AM to 9:00 PM. A lawsuit against the company initiated in March 2003 by a former employee was settled in June 2003— the case involved claims of improper dismissal, sexual harassment and fiscal irresponsibility.

Telemarketing jobs are traditionally seen as low status, high stress, part-time, seasonal, and high turnover. A Rip Off Reports website reports two personal postings or testimonies from persons alleging to be Xentel employees. One, from Jerome based in Regina, alleges smoking in the lunchroom, threats to staff who didn’t reach fundraising quotas, complaints that only two of five training days were delivered, and concern with telemarketer statements that the monies solicited were to be used locally when this was neither true nor verifiable. The other, from New Stanton, Pennsylvania, alleges difficult working conditions and false representation by fellow call centre telemarketing colleagues. There is no independent verification of either posting.

The company, which does not separate the position of chair and CEO, has two co-CEOs. Each owns 21% of the company’s shares. Directors and officers control 50.2% of all shares. No mention is made of a nomination or compensation committee of the Board, let alone one populated wholly by independent directors.

Today, four of Xentel’s seven directors are unrelated and independent. Of the six directors reported in the 2003 AIF, four were executives or related, and information wasn’t detailed enough to determine if the other two were wholly unrelated. One of them, a lawyer whom the company had done business with a former firm, has now grown into an insider relationship. In the 2003 Annual Report, three of five directors where data is available appear to be related, rather than independent.

Stock option plans exist for employees, officers and directors. The company has dual share structure-- both voting and non-voting shares--  which is frowned upon by good governance advocates. Mr Platz says that non-voting shares have never been issued. The company used businesses owned by non-arms-length related parties to procure certain real estate rental premises (354401 Alberta), voice mail (Medianet), and production (Allwest Productions) services which are recorded in its financial statements. Mr Platz describes these related party relationships as “limited” or “insignificant”.

Corporate charitable cash donations in 2003 were an estimated $20,000-25,000 in Canada and $15,000-20,000 in the United States. A key part of such support were cash donations of monies that otherwise would have been used for Christmas cards. In addition to cash, there was an estimated $3,000-5,000 and $500 in in-kind donations, Canada and the U.S. respectively, primarily of tickets to entertainment events and silent auctions, mostly to civil society organizations who are clients. Xentel is not pledged to the Imagine Campaign, signifying donations of at least 1% of pre-tax earnings over a three year average. Xentel’s donations are less than one quarter of one per cent, albeit in a non profitable year of operations.

Xentel develops family entertainment programs and sells excess venue capacity tickets to community-based events like circuses, old-timer hockey challenges, and celebrity basketball games. For example, Xentel buys surplus tickets to a university or college sports game, makes a donation to the institution’s athletic program, and markets the event to the public as a Shrine Bowl. In 2002, such activity at nine hundred public benefit events accounted for 60% of Xentel’s total revenues. .” In 2003, an investigation by a reporter for the Philadelphia Inquirer resulted in a story that Xentel, Inc raised $US 475,000 for the Pennsylvania Narcotics Officers Association, but kept 88% of all telemarketing campaign pledges and donations raised.

In 2004, the state of Iowa initiated a lawsuit against the American Deputy Sheriffs Association, which used Xentel as its telemarketing fundraising, including affidavits that the telemarketers promised contributors a decal which could be seen by some to influence an officer’s issuing of traffic tickets. Mr Platz comments that police officers would do no such thing (that is, not write a ticket to the driver of a decal vehicle) and that the U.S. “is an over-decaled bumper sticker society

Legislation dealing with commercial telemarketing is nuisance-based in the United States and privacy-based in Canada. The company is exempt from Do Not Call legislation enacted in 2003 in the U.S. because it acts on behalf of not-for-profit organizations. The CRTC in Ottawa said that there were no public complaints raised, or collected, about Xentel or other companies in its sector in Canada. Proposed CRTC rules expected to have been tabled in 2004 have been stalled by criticisms that they are unworkable or questionable. In 2003, the Toronto police officers union received adverse media coverage in Toronto for a True Blue campaign, conducted on its behalf by Xentel, as an American style, high pressure campaign to extort money from individual citizens. In 2004, the company was successful in its lawsuit against the City of Windsor, Ontario which had enacted an anti-live animal (anti performing circus) by-law.