(as Nate McCann Company)
(as Kirby Company)
|Parent||Right Lane Industries|
The Kirby Company (stylized as KIRBY) is a manufacturer of vacuum cleaners and home cleaning accessories, based in Cleveland, Ohio, United States. It is a division of Right Lane Industries. Dealers are located in over 50 countries throughout the world. Kirby's products are only sold via in-home door-to-door demonstrations and the company is a member of the Direct Selling Association. All of the vacuum cleaners are built in either Ohio or Texas.
Jim Kirby (1885–1971) designed the first Kirby vacuums for George Scott and Carl Fetzer after World War I, although the Kirby name was not used on a vacuum cleaner until the 1930s. James Kirby invented the "vacuette" circa 1920. The company's primary competitors included The Hoover Company and The Eureka Company, both of which began operations in 1909, as well as Bissell that started building carpet sweepers in 1876. Their primary European competitor was Electrolux, which started 1924. Dyson, Miele and Sebo followed in the 1980s.
Introduced in 1925, the Vacuette Electric featured a removable floor nozzle and handle, and became the forerunner of today's multi-attachment Kirby vacuum models. In 1935, the company introduced the Kirby Model C, the first product to carry Jim Kirby's name. The Vacuette was also briefly offered as a manual vacuum cleaner, utilizing a spring-loaded worm gear driven by pulling the vacuum cleaner backwards; when pushing the machine forward, the worm gear would power a turbine that provided suction. As long as the cleaner was consistently pulled backwards, tension in the spring would remain constant and the turbine would continue spinning. It was designed for rural areas that didn't have electricity, and was very similar to the carpet sweeper.
While competitors have changed the orientation of the motor, their products' appearance, construction materials and other features over the years, Kirby has remained with its original design, materials and functionality with enhancements added to aid in its operation and durability. The company changes the appearance of the cleaner with revised color schemes and introduces new model names while keeping the core technology intact. Used machines are widely available for sale internationally. Because the attachments and appearance items are interchangeable between generations, some machines can be found consisting of parts from multiple models. Machines built in the 1930s, 40s, 50s and 60s are still in operation worldwide and can be completely repaired or rebuilt with widely available parts from the factory.
In the 1930s and the 1940s, Kirby decided to offer their products in retail environments, and introduced the "R" series. They are essentially identical to their "C" series, with the only difference being the power switch installed on the handle. The first model was the R, followed by the 2R, 3R and 4R. In 1970, input from Kirby distributors, dealers, management and customers guided Kirby engineers in developing the Kirby Classic. This ushered in the second generation models, and was an instant success, with soaring sales, allowing the company to expand its manufacturing facilities outside of Cleveland for the first time, which coincided with the rising popularity of wall-to-wall custom installed carpet. In 1972, Kirby West began operations in Andrews, Texas at 1345 NW 101 Street (also known as North Seminole Highway), which doubled the company's manufacturing capacity. The company did maintain a presence in Canada at 1009 Burns Street East in Whitby which is no longer staffed.
Berkshire Hathaway bought Kirby parent Scott Fetzer in 1986 for $315 million. Two years prior, Ivan Boesky had offered to buy Scott Fetzer for $60 a share, or $420 million. Warren Buffett has singled out Scott Fetzer to Berkshire's shareholders as the "prototype" for the "kind of company — and acquisition — he was interested in." According to Berkshire managers, "absolutely no changes were made to the existing Scott Fetzer business or management, and the entire business (and its jet) was preserved."
As of 2003, Kirby is the largest source of revenue and profit for Scott Fetzer, with approximately 500,000 sales per year, about a third of which are outside the United States. In 2003, Scott Fetzer sold the vacuums to about 835 factory distributors, who in turn sell the vacuums door-to-door. As an incentive to new customers, Kirby offers the Service Center Vacuum Rebuild Program for original owners who have been registered with the company. As long as the customer owns the machine as the registered owner, if the cleaner needs repair, they can send it back to the Rebuild Department and have it restored to “like-new” condition. The company will completely disassemble it, repair or replace any worn Kirby parts, and sandblast, polish and buff metal parts back to a shiny “new” appearance. Internal components are also thoroughly inspected and repaired with Kirby replacement parts so that it will perform as originally designed. This is an advantage to the company, as they can evaluate product durability from actual use and make revisions on future models.
Since 1920, new Kirby home care systems have only been sold through (door-to-door) in-home demonstrations by independent, authorized Kirby distributors. The Kirby Company manufactures the unit and sells it to a group of authorized distributors. Each distributor is an independent business, and as such sets their own price for the unit and conducts their own business operations. Independent distributors recruit dealers who are also independent contractors. 
Criticism of marketing and sales practices
The practices of some of Kirby's independent distributors have been subject to criticism. The Kirby is included by Lon L. Fuller and Melvin A. Eisenberg, Professors of Contract Law at Harvard Law School and UC Berkeley School of Law/Columbia Law School, as a textbook example of unconscionability. Kirby has been subject to relentless criticism by consumer protection agencies. As of 1999, of the 22 state consumer protection agencies, 15 had received a total of more than 600 complaints in just a few years. Between 1996 and 1999, the Wisconsin Department of Agriculture, Trade, and Consumer Protection received 50 complaints regarding Kirby dealers, and concluded from its investigation that Kirby, through its distributors, engaged in a "statewide pattern of trade practices" violation of state consumer-protection laws.
" The Wall Street Journal records examples where an elderly couple was unable to remove three Kirby salesmen from their home for over five hours; in another example, a disabled woman who had been living alone in a mobile home on $1000/month in Social Security payments and suffering from Alzheimer's disease was discovered to own two Kirby vacuum cleaners, having paid $1,700 for the second one. In 2002, the Florida Agriculture and Consumer Services Commissioner obtained $13,000 in refunds for 13 senior citizens.
According to the Wall Street Journal, the device "costs more than four times what other top-of-the-line vacuum cleaners do." Kirby compares the price difference to that between luxury and economy cars, yet "luxury-car dealers don't make house calls in trailer parks. But Kirby dealers do." The Kirby vacuum cleaner is "marketed exclusively door-to-door — often to people who cannot afford a $1,500 gadget, but succumb to the sales pitch nonetheless."
In 2001, the West Virginia Attorney General obtained more than $26,000 in refunds and credits for dissatisfied Kirby buyers. In 2002, ABC's Primetime conducted a hidden-camera investigation in response to more than a thousand complaints regarding Kirby's salespeople. In June 2004, the Arizona Attorney General filed suit against Kirby distributors for violations of the Telemarketing and Consumer Fraud and Abuse Prevention Act, seeking an injunction against any other home sales. Public authorities flooded with complaints about Kirby vacuum cleaners is not a recent phenomenon; even in the 1960s and 1970s, Kirby had been "cited by various agencies a number of times" and the Detroit Better Business Bureau had received so many complaints that it decided to turn the matter over to the Wayne County prosecutor.
Kirby asserts it is not liable for the actions of its sales force, whom it describes as independent contractors. Its "Distributor Code of Ethics" enumerates 12 principles, including "observe the highest standards of character, honesty and integrity in dealings with my customers, fellow Distributors and other members of the Kirby profession." Kirby also asserts that it teaches its distributors direct-sales laws, and that it requires them to resolve complaints within 24 hours under threat of termination.
Between 1998 and 2001, in Alabama alone, more than 100 lawsuits were filed against Kirby and its affiliates and subsidiaries, resulting in nearly $2 million in judgements and settlements.
Twelve distributors of Kirby vacuums in Massachusetts were cited for violations of the Commonwealth's wage and hour laws by the Massachusetts Attorney General's Office in July 2010. The 12 distributors were cited for a variety of different wage and hour violations including nonpayment of wage, nonpayment of minimum wage, misclassification, child labor, retaliation and record-keeping violations. The distributors were fined a total of $199,300 for the violations and also ordered to pay restitution.
The Supreme Court of Texas held Kirby liable for a rape committed by one of its door-to-door salesmen, finding that the manufacturer maintained control of its distributors and their salespeople, by requiring its distributors to make sales via in-home visits, and that the risk was foreseeable. In that case, the court found that — had the employee's references been checked — Kirby would have discovered complaints of inappropriate sexual behavior at his previous employer and an arrest and deferred adjudication for indecency with a child.
The North Dakota Supreme Court also held Kirby liable in a similar rape incident, where the salesman was hired after being convicted of assault and with charges of criminal sexual misconduct in the third degree pending against him.
Fraud and RICO
A federal class-action lawsuit is pending against Kirby under the civil action provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), for allegedly selling used vacuums as new; the complaint alleges that "Not only is Kirby aware of this practice, it 'participates in the scheme by, among other things, selling to its distributors duplicate or replacement "Original Purchaser's Registration" cards to be given to secondhand purchasers.'" The complaint also alleges that "Kirby commonly sells distributors new empty boxes and packaging material for the obvious purpose of repackaging units that the distributor previously sold to a prior customer." Kirby's motion to dismiss was rejected. After Kirby refused discovery requests for its sales contracts and other documents, Judge Clay D. Land compelled Kirby to disclose the requested documents.
A class-action lawsuit was also filed against Kirby in Bullock County Court in Alabama over its sales practices, specifically its use of credit cards issued expressly to fund Kirby purchases, under Truth in Lending laws. Kirby succeeded in persuading a trial judge to recuse himself.
Kirby has sued unauthorized Kirby vacuum dealers for United States trademark infringement where the vacuums are identified by the Kirby name and logo. The United States Court of Appeals for the Fifth Circuit has held that such use does not constitute trademark infringement. The United States Court of Appeals for the Ninth Circuit vacated an injunction granted in Kirby's favor by a lower court in that Circuit based on similar trademark claims against an unauthorized distributor.
Kirby also did not prevail in a similar action against an unauthorized dealer in Minnesota, where it asserted trademark infringement, false and unfair competition, and trade disparagement; the authorized dealer prevailed on a $90,000 counterclaim against Kirby for defamation and then in a suit against an insurer who refused to defend the suit when the dealer refused Kirby's settlement offer. Kirby's parent lost another such suit in Minnesota based on trademark infringement and other related state law claims.
Nor did Kirby prevail in a tortious interference with contractual relations claim in Washington against an unauthorized retailer; the Washington Supreme Court awarded attorney's fees to the retailer. However, Kirby has prevailed in cases where unauthorized retailers went farther than using the name and logo to identify the vacuum cleaner, misrepresenting themselves as the manufacturer and claiming the existence of factory warranty.
- "The Kirby Story". kirby.com. Archived from the original on 2011-11-14. Retrieved 2007-07-16.
- "Kirby Vacuum Cleaner "500 Series" Details". 1377731.com. Archived from the original on 2011-09-07. Retrieved 2010-11-01.
- Joseph P. Cahill, "Here's the Pitch: How Kirby Persuades Uncertain Customers to Buy $1,500 Vacuum". The Wall Street Journal (October 4, 1999).
- The Scott Fetzer Company, "A History of Quality, Reliability & Performance" (#739807 copyright 2007)
- "Kirby Instruction and Owner's Manual". Kirby Vacuum Cleaners. Kirby. Retrieved 24 July 2017.
- Robert Cole. "Boesky makes bid for Scott & Fetzer" The New York Times (April 27, 1984).
- Miles, 2003, p. 273.
- Miles, 2003, p. 274.
- Miles, 2003, p. 276.
- "Kirby Rebuild Program". Kirby Vacuum Cleaners. The Kirby Company. Retrieved 21 July 2017.
- "Kirby Vacuums". Ventura Vacuum. Retrieved 4 June 2013.
- Lon L. Fuller and Melvin Aron Eisenberg, Basic Contract Law, Eight Edition 80 (2006).
- Greg Dawson, "Kirby Always Cleaning Up After Others," Orlando Sentinel (August 27, 2004).
- Sidney Margolius, The innocent investor and the shaky ground floor 117 (1971).
- National Union Fire Ins. Co. v. Cavins, 226 Fed.Appx. 895 (11th Cir. 2007).
- Read v. Scott Fetzer Co., 990 S.W.2d 732 (Tex. 2008).
- Phillip R. Jones, Jennifer A. Youpa, and Stacey S. Calvert, "Employment and Labor Law," 53 SMU Law Review 929 (2000).
- McLean v. Kirby Co., a Div. of Scott Fetzer Co., 490 N.W.2d 229 (N.D. 1992).
- Paul S. Swedlund, "Negligent Hiring and Apportionment of Fault between Negligent and Intentional Tortfeasors: A Consideration of Two Unanswered Questions in South Dakota Tort Law," 41 South Dakota Law Review 45 (1995-1996).
- Jordan v. Scott Fetzer Co., 2007 WL 4287719 (M.D. Ga 2007).
- Civil RICO Report, "Customers claim vacuum sales violate RICO" (January 1, 2008).
- Jordan v. Scott Fetzer Co., 2009 WL 1885063 (M.D. Ga 2009).
- Ex parte Kirby Co., 784 So.2d 290 (Ala. 2000).
- Scott Fitzer Co. v. House of Vacuums, Inc., 381 F.3d 477, 478 (5th Cir. 2004).
- Phillip B. Philbin and Carmen E. Griffin, "Intellectual Property Law," 58 SMU Law Review 985 (2005).
- Scott and Fetzer Co. v. Dile, 643 F.2d 670 (9th Cir. 1981).
- Williamson v. North Star Companies, 1997 WL 53029 (Minn. Ct. App. 1997).
- Louis J. Speltz and Ann S. Grayson, "Is that your final answer? Are insureds entitled to insurance coverage for trademark infringement?" 23 Hamline Law Review 348 (2000).
- Scott Fetzer Co. v. Williamson, 101 F.3d 549 (8th Cir. 1996).
- Scott Fetzer Co., Kirby Co. Div. v. Weeks, 786 P.2d 265 (Wash. 1990).
- Scott Fetzer Co. v. Gehring, 288 F.Supp.2d 696 (E.D. Pa. 2003).
|Wikimedia Commons has media related to Kirby Company.|
- Miles, Robert P. 2003. The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers.