MBA - Legal Environment: Foundations, ADR, and Agency

Order Description Discussion Activity 1. Read the case of Compton v. Merlotte's posted in" rel="nofollow">in the Topic 1 discussion and discuss the followin" rel="nofollow">ing: Should the Court hear Bill's claim or is he bound by the arbitration agreement? Discuss the pros and cons and be sure to refer to the law in" rel="nofollow">in your textbook to support your views. 2. Read "The Case of the Loose Keys" posted in" rel="nofollow">in the discussion area. There are three topics posted in" rel="nofollow">in the Discussion: 2 (a) For the Plain" rel="nofollow">intiff; 2 (b) For the Defendant; and 2(c) The Judgment. Your faculty member will assign you to the role of Plain" rel="nofollow">intiffs� attorney, Defendants� attorney or Judge. Plain" rel="nofollow">intiffs� and Defendants� attorneys must post a well-reasoned analysis to support their respective clients� positions. This is not a team assignment. It is an in" rel="nofollow">individual discussion activity. Each in" rel="nofollow">individual Plain" rel="nofollow">intiffs� and Defendants� attorney should post his or her argument no later than WEDNESDAY Mornin" rel="nofollow">ing. Judges should read the arguments posted in" rel="nofollow">in Topics 2(a) and (b) and post in" rel="nofollow">in 2(c) a well-reasoned opin" rel="nofollow">inion rulin" rel="nofollow">ing in" rel="nofollow">in favor of either the plain" rel="nofollow">intiff or the defendant based on the law and the facts presented. Each in" rel="nofollow">individual judge is required to post only one decision on the case no later than Thursday Mornin" rel="nofollow">ing. Individual judges may ask questions of both sides but should post only one opin" rel="nofollow">inion per judge. On Friday and Saturday, everyone should participate in" rel="nofollow">in the Judge's topic and by Saturday, 11:59 p.m., everyone should post Fin" rel="nofollow">inal views of the judges' rulin" rel="nofollow">ings. Legal Environment: Foundations, ADR, and Agency The purpose of this work is to discuss the first topics in" rel="nofollow">in the legal environment of busin" rel="nofollow">iness: the foundations of the Constitution and the court system, alternative dispute resolution and agency. Introduction to the Legal Environment of Busin" rel="nofollow">iness by Rosemary Hartigan, J.D., M.A. and Paula O'Callaghan, J.D., M.B.A. Why should I care about the law? Why do busin" rel="nofollow">inesspeople need to know anythin" rel="nofollow">ing about the law? Some people thin" rel="nofollow">ink of lawyers in" rel="nofollow">in busin" rel="nofollow">iness as a necessary evil. That may be true, because if everyone were scrupulously honest and had photographic memories regardin" rel="nofollow">ing all statements uttered that could constitute promises, perhaps lawyers wouldn�t be necessary. But, alas, we are mere mortals with failin" rel="nofollow">ing memories and sometimes failin" rel="nofollow">ing ethics. Professor Hartigan's perspective on the roles of the lawyer and the manager Havin" rel="nofollow">ing been on both sides of the fence as a lawyer and a product development and marketin" rel="nofollow">ing manager, I have a bit different view of law than many lawyers. You might say it is a systems perspective. I believe that a lawyers� role is to guide the manager in" rel="nofollow">in analyzin" rel="nofollow">ing risk, but that it is the ultimate responsibility of the manager to make the fin" rel="nofollow">inal busin" rel="nofollow">iness call. Lawyers are in" rel="nofollow">inherently conservative when it comes to risk. That is our train" rel="nofollow">inin" rel="nofollow">ing and it�s our responsibility to accurately convey risks to the client. I�ve seen some busin" rel="nofollow">inesses where the legal departments are allowed too much control over busin" rel="nofollow">iness decisions. Managers can�t abdicate responsibility for makin" rel="nofollow">ing the busin" rel="nofollow">iness call. This is one of the main" rel="nofollow">in reasons it is important for managers to have legal literacy. You need to know when you need legal advice; and then what to do with it. Sometimes basic legal knowledge is necessary on the front lin" rel="nofollow">ines in" rel="nofollow">in dealin" rel="nofollow">ing with customers and co-workers. Knowin" rel="nofollow">ing somethin" rel="nofollow">ing about the law can assist you in" rel="nofollow">in �prevention.� I hope that by equippin" rel="nofollow">ing you with the skills of legal analysis you will be able to prevent lawsuits and other unpleasantness from becomin" rel="nofollow">ing a distraction from your busin" rel="nofollow">iness. However, in" rel="nofollow">in many cases you will be the one who has to brin" rel="nofollow">ing a legal related matter to closure. Perhaps you�ve taken over from an executive who has left the department or company and left behin" rel="nofollow">ind a problem that requires a legal solution. Or, you may have done somethin" rel="nofollow">ing that triggers a legal response from a customer or vendor. If you know the relevant legal rules for your area of busin" rel="nofollow">iness, you�ll know when it�s appropriate to in" rel="nofollow">involve legal counsel. Remember those critical thin" rel="nofollow">inkin" rel="nofollow">ing skills learned "way back" in" rel="nofollow">in Week 2? This week we will apply our newly honed critical thin" rel="nofollow">inkin" rel="nofollow">ing skills to legal matters affectin" rel="nofollow">ing busin" rel="nofollow">iness. et�s begin" rel="nofollow">in with a basic overview about the two types of law Differences between civil and crimin" rel="nofollow">inal law American society highly values in" rel="nofollow">ingenuity and entrepreneurship, but there are legal limits on the conduct of commerce. Some of those limits are statutory, which means a law-makin" rel="nofollow">ing body has enacted a specific law to regulate a specific activity (e.g. the Sherman Act statute regulatin" rel="nofollow">ing antitrust) and some are found in" rel="nofollow">in the common law (e.g. tort law imposin" rel="nofollow">ing liability for an in" rel="nofollow">infin" rel="nofollow">inite variety of behaviors). Most of the legal limits on busin" rel="nofollow">iness fall in" rel="nofollow">into the category of �civil law.� One big difference between civil and crimin" rel="nofollow">inal law in" rel="nofollow">involves the potential penalties. Civil law liability carries penalties that are monetary � so called �damages.� The guilty party pays monetary damages in" rel="nofollow">in an amount the court believes would make the wronged party whole. This contrasts with crimin" rel="nofollow">inal law � where the possible penalties are limits on personal freedom (such as in" rel="nofollow">incarceration and death), although monetary penalties are also possible in" rel="nofollow">in some crimin" rel="nofollow">inal matters (such as a fin" rel="nofollow">ine payable to the government or restitution to the victim). Special exception: the government contractor There is one major exception to the rule that busin" rel="nofollow">iness contracts do not in" rel="nofollow">involve crimin" rel="nofollow">inal penalties for breach: government contractin" rel="nofollow">ing. Because so many students at the University have employment that in" rel="nofollow">involves contracts with the U.S. government in" rel="nofollow">in some manner, we fin" rel="nofollow">ind that is often a poin" rel="nofollow">int of confusion in" rel="nofollow">in the conferences. Government contractin" rel="nofollow">ing is a special circumstance where the contracts in" rel="nofollow">involve civil law - yet breach of contract potentially in" rel="nofollow">involves crimin" rel="nofollow">inal penalties. The crimin" rel="nofollow">inal penalties can in" rel="nofollow">include jail time for serious violations. Those of you who work in" rel="nofollow">in this area probably will attend a professional development semin" rel="nofollow">inar about contract "compliance" where you will learn the particulars of your contractual obligations. Trend developments in" rel="nofollow">in busin" rel="nofollow">iness law The past twenty years have seen a rise in" rel="nofollow">in the crimin" rel="nofollow">inalization of busin" rel="nofollow">iness law. While it�s still true that no one goes to prison for breakin" rel="nofollow">ing the terms of a contract (notable exception: government contractin" rel="nofollow">ing), there has been a marked in" rel="nofollow">increase in" rel="nofollow">in the number of busin" rel="nofollow">iness related activities that carry possible crimin" rel="nofollow">inal penalties. Busin" rel="nofollow">iness activities that are punishable by crimin" rel="nofollow">inal penalties (in" rel="nofollow">in addition to fin" rel="nofollow">ines and damages) are known as �white collar� crimes. We mention this because many of you will be familiar with some famous cases from the last several years in" rel="nofollow">involvin" rel="nofollow">ing busin" rel="nofollow">iness people� Martha Stewart (ImClone), Kenneth Lay (Enron), Dennis Kozlowski (Tyco), and, of course, Bernie Madoff. Those busin" rel="nofollow">iness people managed to get themselves in" rel="nofollow">into the crimin" rel="nofollow">inal justice system by committin" rel="nofollow">ing fraud, lyin" rel="nofollow">ing to federal authorities, or otherwise in" rel="nofollow">invokin" rel="nofollow">ing specific laws to deter commercial crimes such as in" rel="nofollow">insider tradin" rel="nofollow">ing of stock. The possible penalties for white-collar crime do in" rel="nofollow">include imprisonment as well as fin" rel="nofollow">ines and damages. When you see a busin" rel="nofollow">iness person in" rel="nofollow">in handcuffs doin" rel="nofollow">ing "the perp walk," ask yourself, �What law has been allegedly broken?� Typically there will be a law (statute) or a regulation (e.g. Securities Exchange Commission rule) that has been allegedly transgressed. This week's readin" rel="nofollow">ing and assignment In order to make in" rel="nofollow">informed busin" rel="nofollow">iness decisions, managers need to understand the basic foundations of the legal system, how the courts work and how they can be avoided. Alternate Dispute Resolution is becomin" rel="nofollow">ing in" rel="nofollow">increasin" rel="nofollow">ingly important as an alternative to costly and stressful litigation. Note that all managers are in" rel="nofollow">involved in" rel="nofollow">in agency relationships. We are usin" rel="nofollow">ing a case-based approach in" rel="nofollow">in this class, and all of the cases are taken from the "real world." This week you are asked to address two cases. In the first one you are asked to consider whether an employee is bound by an arbitration agreement with his employer. The second case, "The Case of the Loose Keys," is an agency problem. Read the case carefully. You will be role-playin" rel="nofollow">ing in" rel="nofollow">in this case. Everyone will be assigned the role of Plain" rel="nofollow">intiff, Defendant, or Judge. Note that Plain" rel="nofollow">intiffs and Defendants need to submit their responses to the topic by Wednesday, so the judges can have time to respond. Judges must respond by Thursday. Everyone will have until Friday to post their view of the judges' rulin" rel="nofollow">ings. Participation earlier in" rel="nofollow">in the week is strongly encouraged. Topic 1: Compton v. Merlotte' Compton v. Merlotte's When Bill Compton started workin" rel="nofollow">ing for Merlotte Enterprises, he received a copy of Merlotte's Employee Handbook. As part of his acceptance of employment at Merlotte's, Bill signed a form statin" rel="nofollow">ing that he received the handbook and understood its terms and agreed to abide by the terms. Durin" rel="nofollow">ing Bill's third year of employment, Merlotte revised the handbook. One of the revisions was the addition of an arbitration clause that stated that all disputes arisin" rel="nofollow">ing out of employment with Merlotte would be settled by bin" rel="nofollow">indin" rel="nofollow">ing arbitration. Merlotte advised its employees of the specific changes to the handbook terms and required all employees to sign waivers statin" rel="nofollow">ing that they read, understood, and accepted the revised terms. Bill signed this form and contin" rel="nofollow">inued workin" rel="nofollow">ing at Merlotte's until his employment was termin" rel="nofollow">inated. Bill sued Merlotte allegin" rel="nofollow">ing various claims of unfair dismissal. Should the Court hear Bill's claim or is he bound by the arbitration agreement? Discuss the pros and cons and be sure to refer to the law in" rel="nofollow">in your textbook to support your views. Topic 2: The Case of the Loose Keys A new and used car dealership hired Employee to perform various duties such as cleanin" rel="nofollow">ing and gassin" rel="nofollow">ing vehicles, movin" rel="nofollow">ing vehicles from one lot to another and main" rel="nofollow">intain" rel="nofollow">inin" rel="nofollow">ing the showroom and vehicle lots. In this position, Employee had access to keys to the vehicle through a "key control shack procedure." Under this procedure an attendant keeps the keys in" rel="nofollow">in a control shack. When any employee wants to move a company vehicle, s/he must fill out a key "tag" or request form, which contain" rel="nofollow">ins spaces for the date, time, stock number of vehicle, name of employee checkin" rel="nofollow">ing out the vehicle, and the destin" rel="nofollow">ination of the vehicle. For example, the vehicle might be taken to a body shop for repairs or to a gas station, or to a company lot at a different location. Every time an employee checks out a vehicle, the reason must be for company busin" rel="nofollow">iness use. It was not necessary to put the expected return time on the tag, but if a vehicle was expected to be gone for a long time, this in" rel="nofollow">information was supposed to be put on the tag. Sometimes the key shack attendant fills the tag out for the employee. When the tag is completed, the key shack attendant adds the in" rel="nofollow">information from the tag to key control log, gives the keys to the employee who has requested them, and hangs the tag on the board in" rel="nofollow">in the control shack. When the vehicle is returned the key shack attendant crosses out the entry for the vehicle in" rel="nofollow">in the control log, replaces the keys, and removes the tag from the board. Sometimes vehicles are gone for more than one day, but a new page of the control entry is started each day. Some vehicles may be removed permanently if they are sold from another lot. In these cases, the managers of the other lots call to let the key shack attendant know that the vehicle will not be comin" rel="nofollow">ing back. Sometimes employees would drive cars back and leave the keys with other employees. This practice was acceptable to the dealership. One day Employee asked the key shack attendant if he could use a car for 30 min" rel="nofollow">inutes on his lunch break to go to his mother's house. The key shack attendant told him it was okay as long as he brought it back because, otherwise, she could get in" rel="nofollow">in trouble. Employee took the car and left. On his way back to the dealership, Employee rear-ended a car stopped at a stop light, causin" rel="nofollow">ing in" rel="nofollow">injuries to the driver and a passenger. Employee told a police officer at the scene of the accident that he was on a lunch break from his job and that he had permission to drive the car, but his boss was not aware he had the car. The plain" rel="nofollow">intiffs sued the car dealership on the grounds that it was responsible for the in" rel="nofollow">injuries caused by Employee. Discussion Instructions Read "The Case of the Loose Keys". There are three topics posted in" rel="nofollow">in the Discussion: 2 (a) For the Plain" rel="nofollow">intiff; 2 (b) For the Defendant; and 2(c) The Judgment. Your faculty member will assign you to the role of Plain" rel="nofollow">intiffs� attorney, Defendants� attorney or Judge. Plain" rel="nofollow">intiffs� and Defendants� attorneys must post a well-reasoned analysis to support their respective clients� positions. This is not a team assignment. It is an in" rel="nofollow">individual assignment, and each Plain" rel="nofollow">intiffs� and Defendants� attorney should post his or her argument no later than Wednesday mornin" rel="nofollow">ing. Judges should read the arguments posted in" rel="nofollow">in Topics 2(a) and (b) and post in" rel="nofollow">in 2(c) a well-reasoned opin" rel="nofollow">inion rulin" rel="nofollow">ing in" rel="nofollow">in favor of either the plain" rel="nofollow">intiff or the defendant based on the law and the facts presented. Each in" rel="nofollow">individual judge is required to post only one decision on the case no later than by Thursday (and earlier if possible so that classmates can read and discuss the decisions before the weekends). Individual judges may ask questions of both sides but should post only one opin" rel="nofollow">inion per judge. Everyone should participate in" rel="nofollow">in the Judge's topic and discuss your views of the judges' rulin" rel="nofollow">ings. Topic 2A: Loose Keys - Attorneys for the Plain" rel="nofollow">intiffs � By Wednesday Mornin" rel="nofollow">ing Read the Case of the Loose Keys case study. Students assigned to be Plain" rel="nofollow">intiffs' attorneys should post a well-reasoned analysis to support the Plain" rel="nofollow">intiffs. Be sure to support your arguments with facts from the case and legal theory from your textbook. Topic 2B: Loose Keys - Attorneys for the Defendant � By Wednesday Mornin" rel="nofollow">ing Read the Case of the Loose Keys case study Students assigned to be Defendants' attorneys should post a well-reasoned analysis to support the Defendant car dealership. Be sure to support your arguments with facts from the case and legal theory from your textbook. Topic 2C Loose Keys Judges Read the Case of the Loose Keys case study. Students assigned to be judges should read the arguments posted in" rel="nofollow">in Topics 2(a) and 2(b) and post a well-reasoned opin" rel="nofollow">inion fin" rel="nofollow">indin" rel="nofollow">ing for plain" rel="nofollow">intiff or defendant based on the law and the facts presented. Be sure to support your arguments with facts from the case and legal theory from your textbook.