Describe civil and criminal penalties that might arise from Ima’s death
Under the provisions of the Occupational Health and Safety Act (OSHA) 1970, all employers are responsible for creating adequately safe working environment (Pinnington, Macklin & Campbell, 2007). The possibilities of employee contact with uninsulated wire is a situation, when life of this employee becomes jeopardized, as well as there is a possibility of getting serious bodily damages. In this case, the affected employee, or the family members are entitled to claiming general damages from the employee. Furthermore, because the omissions of Walexron are conspicuously blatant (uninsulated wire obviously poses a huge hazard to the employee and visitors of the facility) the court may also award punitive damages.
At the same time, together with a civil lawsuit against Ima or, in case of her demise, Ima’s family, officials of the company are most likely to face criminal prosecution on the grounds of Section 17 E of the OSHA, which specifies that an employee, who willfully violates the provisions of OSHA, and whose actions led to death of an employee, can face an imprisonment (up to six months) and should pay a substantial fine (up to US$ 500,000 for organizations and US$ 250, 000 for individuals). At the same time, the practice demonstrates that the ‘beyond reasonable doubt’ burden of proof is very high in such cases (MacIntyre, 2008). Thus, the court should establish that it is the employer, who was responsible for the violation (e.g. not a third party contractor) that the direct cause of the employee death was the actions of the employer and that the employer acted willfully, i.e. that he knew that his actions were unlawful and could result in death.
What are the legal issues related to Dee’s decision options for reducing costs, such as shipping some of the materials for disposal in Vietnam, Thailand, Colombia, and Brazil
Disposing of hazardous materials in the developing countries is a common practice in today’s business segment, as exporting industrial toxic wastes into the countries of the third world is budget friendly, although simultaneously it is ethically dubious. However, importing toxic waste into a specific country is permitted only when there is a bilateral agreement between the two states. Currently, the United States of America entered into such agreements with Canada, Mexico, Costa Rica, Malaysia and the Philippines. In other words, today there is no legal possibility to export toxic wastes into Vietnam, Thailand, Columbia and Brazil, unless, under Basel Convention, the latter give an open and explicit consent for such operations. Otherwise, the customs authorities will simply stop the cargo of toxic wastes and those, who organized the project, will be brought to liability.
What are the legal pros and cons of each marketing proposal? What additional information do you need to adequately respond to the vice president?
Each marketing option has its positive and negative aspects, which should be carefully evaluated before a decision is made.
Walxron should set a minimum price, that the wholesalers can charge – this option verges upon the provisions of the United States antitrust law. It may be viewed as a restrictive business practice, as in this case the actions of Walxron are intended on making certain limits on the pricing policies of other members of the market. At the same time, this tactic can help to keep the prices of wholesalers on the level, which satisfies marketing policies of the companies.
Walxron should set a maximum price that the wholesalers can charge – this approach may also be viewed as an attempt to restrict business practices of a competitor, because by limiting the maximum prices of wholesalers, the company influences their profits (Kelly, Holmes & Hayward, 2005). In addition, this approach limits the possibility of Walexron to define the prices, because the company will not be able to make the prices higher than the wholesalers will.
The wholesalers can charge any price they want within a certain price limit, but they have to provide a rebate or coupon to the customers for a differential. Together with the two pricing strategies mentioned above, this approach also contradicts the provisions of the USA antitrust law.
The wholesalers can charge any price they want, but if they advertise a price that is less - this approach is the most legally recommended option. In particular, it is the only one from the listed options, which meets the provisions of antitrust law. Providing financial incentives to the companies, which, nevertheless, agree with Walexron pricing policies, is a good and antitrust law consistent strategy.
Based on the elements required for a claim of negligence, will PITS be successful in its suit against Walexron? Chuangxiang Yoys? Why or why not
In order to prove that negligence indeed took place, the plaintiff has to satisfy five standards:
Duty – firstly, a plaintiff should demonstrate that the defendant (Walexron abd Chuangxiang Toys) had a duty to produce the helicopters, which are safe and which will not harm its customers in any way. In this case, it is clear that the both defendants knew the purpose of using the products. In addition, Chuangxiang had to produce safe helicopters, while Walexron should have constantly supervised the production process and ensure that the helicopters were completely consistent with the existing standards and safety regulations.
Breach of Duty – secondly, despite the fact that the method of disclosing a violation is hardly consistent with the current business practices, it was made clear that Walexron and its co-defendant violated their mutual duty to manufacture high-quality products.
Cause in fact – potential plaintiffs should prove that there was a causation between the actions of Walexron and the harm inflicted.
Proximate Cause is the standard, which stipulates that the defendant may be held liable to the extent he foresaw or could have foreseen the occurrence of harm.
Damages – a reasonably and legally recognized harm should be present in each negligence claim (Deakin, Johnstom & Markesinis, 2003). However, the findings of PITS are based on speculations of one of the former company’s technician only.
Evidently, the plaintiff should collect more evidence before filing a claim. In particular, neither it is possible to prove that any damages have been inflicted nor there is any indication that the company foresaw or could have foreseen this chimerical harm.
What steps should Walexron take to protect the design of the Ranger Helicopter from competitors?
Assuming that industrial design of the Ranger Helicopter was fully disclosed by the whistleblower during the press conference, Walexron should apply all possible legal defenses to prevent its competitors from using technological solutions developed by the company R&D department. Even if the company decides to recall its products, the reason of recall is based on the improper manufacture only, while the design is safe for the customers, and, therefore, resourceful competitors may easily imitate it.
Thus, the following legal measures should be taken:
Provided that the company patented Ranger Helicopter (most likely, it is a utility patent) it should make a media notification requesting the competitors to desist from manufacturing similar products with use of Walexron technologies.
The company should make a ‘reconnaissance’, and if any competitor is caught developing its own products based on Walexron technology, the firm attorneys should immediately send a ‘cease and desist’ letter.
If the ‘cease and desist’ letter produces no effect, then the company should start seeking judicial injunctions to stop development, production and use of similar products (Kelly, Holmes & Hayward, 2005).
Together with the injunction motion, the company attorneys should start working on preparing an infringement claim.
Did Penny or Sue commit any securities violations? Please explain the reasons for your conclusion. What factors might the court consider in conducting such an analysis?
The actions of both Penny and Sue present a dogmatic case of corporate misconduct known as “insider trading”. It is the act of trading stock of the company with intent to accrue benefits of avoids losses while using information, which is not available to the public (Bainbridge & Bainbridgem 2009). Thus, Sections 15 and 16 of the Securities Act 1933 contains a strict prohibition of selling/buying company stock by those, who have access to the information, which might have potentially changed the buying decisions of other shareholders or members of the public. The Securities Fraud Enforcement Act imposes severe liability for such activities, i.e. anyone caught trading with use of privileged knowledge should be fined as high as three times the sum, which this person received as profits, or avoided as losses (Elliott & Quinn, 2002).
In addition, the “Fair Disclosure” principle obliges the company management to disclose any information, which became intentionally or accidentally communicated to people, who should not be accessed to it, such information should be promptly communicated to the public (Butler & Rollnick, 2003). Thus, the actions of Penny and Sue expressly contravene securities law, as well as silence of Walexron constitutes an omission to perform its duties to the shareholders.
Discuss the legal and ethical issues associated with SWA’s action in selling the tug before filing bankruptcy. What recourse does Walexron have in recovering the money still owed on the equipment?
Obviously, the executives of SWA abused their good relationships with Walexron. The provisions of Bankruptcy Abuse Prevention and Consumer Protection Act 2005 banned getting extra liabilities when it was ‘reasonably evident’ for the company management that the company had high chances of getting bankrupt ( Bainbridge & Bainbridge, 2009).
The trustee, who is appointed the court, will be closely examining all transactions made by the debtor before the company filed for bankruptcy. One of the exceptions, when a trustee is authorized to ‘seize’ the sold assets is when the debtor sold the assets for price, which is below current market price (Maclntyre, 2009). In this situation, selling a tug with market value of US$ 18,000 for US$ 3,500 most assuredly meets this standard.
In order to recover the money, which the creditor still owes to Walexron, the company should get in contract with trustee of the assets. Depending on the type of their agreement with SWA, Walexron can be either first-line or second-line creditor, i.e. its interest may be either collateralized or not. In the second case the company has not other options, but to rely on the fact that the debtor has other assets, which can be sold to satisfy the claims of Walexron. The trustee will seize the tug from the buyer, sell at a fair market price and use the money for satisfying the claims of Walexron.
In case the trustee will not be capable of seizing the tug from the buyer, Walexron should rely on being reimbursed from other assets seized and sold by the trustee.
Under the CISG, has Walexron entered a contract with Toy Supply? Why or why not?
Articles 14-24 of the United Nations Convention on Contracts for the International Sale of Goods regulate issues connected with contract formation (Kelly, Holmes & Hayward, 2005). A contract is valid when a valid offer is followed by the valid acceptance of such offer.
Selling offers by e-mail is an admissible form of making offers, provided that the offer is detailed enough and contains description of the goods, their quality, specifications and price. In order to be valid, acceptance should unconditionally accept the terms offered by the seller (Maclntyre, 2008). However, in this case the alleged acceptance automatically transformed into counter-offer. Stating that W450 requires 250 helicopters extra, means that the contract is not binding until Walexron confirms that it is ready to supply 5250 items. The word ‘but’ is critical in this context. If the buyer stated that it accepts 5000 and requests additional shipment for 250, then the sentence could have been understood as an acceptance and a new offer for these additional 250 helicopters. However, the current wording precludes the seller from relying on CISG and other international private law protection until it confirms that it will be capable to deliver 5250 items as a single shipment.
What are the legal and ethical ramifications of the employee’s offer to the customs official? Would it make a difference if the officer requested a $1000 gift to his son’s soccer team in order to expedite the shipments?
This decision is nothing but a typical example of bribing a customs official and is neither consistent with ethical principles, nor it is allowed under the law. The federal law regulating bribery cases of the customs officials is 18 U.S.C. § 201(b), which makes it illegal to transfer anything valuable to a federal official of the United States for the commission of specific acts (Elliott & Quinn, 2002).
The concept of bribery encompasses the situations when the official does not take money for himself directly. The practice demonstrates that the cases, when public officials use different schemes to conceal that they are connected with the ‘gratitude’ payments are popular in the USA. The law expressly says that demanding any actions that will be beneficial to the public official or to the third parties, and which are not expressly prescribed by the law amounts to bribery. Consequently, the fact that the officer may ask a company to finance the soccer team of his son, and that he will expedite the process in return should not absolve him and the company from liability.
Together with the fact that it is one of the most heinous crime, it is also an egregious violation of the existing ethical codes and principles. A public employee is the one, who represents the government, and the community will be making conclusions about integrity of the entire system based on the actions of those employees, with whom they directly interact (Duska, 2007). Therefore, the actions of such customs officer should be viewed as those, which disrupt effectiveness, integrity and legitimacy of the United States public institutions. Actions of the company officials contravene the most fundamental postulates of business ethics as well – by igniting the interest of the routinely underpaid public workers, the company cultivates corruption and perverts law-abiding public servants (Duska, 2007).
What legal and ethical issues are presented by the working conditions of Walexron’s Indonesia stores?
Multiple international watchdogs are actively campaigning against child labor in the developing countries. Despite the fact that the Conventions on the Rights of the Child 1990 expressly prohibits all forms of work exploitation of children, the developing countries of Asia, Sub-Saharan Africa and Latina America are notorious for ignoring the most basic foundations of this law. The main problem with the Convention is that the largest user of cheap overseas child labor – the United States of America has not ratified the convention yet. Thus, taking into account the fact that the local legislation of Indonesia may allow child labor, as well as that this country may lack effective enforcement institutions, the activities of Walexron are entirely compliant from the legal point of view.
However, the case presents a serious ethical controversy. The practice demonstrates that in order to be profitable, development and production of high-quality products are no longer sufficient (Jones, Parker & Bos, 2005). Thus, many consumers tend to base their buying decisions on the reputation of a company and its adherence to the main principles of ethical and sustainable development. The use of child labor is utterly wrongful, and, therefore, a significant number of customers may decide to stop buying from Walexron.
What are the legal and ethical ramifications of Walexron’s lawsuit against the Paine family?
The lawsuit of Walexron against Mrs. Paine and her family is not likely to be successful due to several reasons:
Fine print is not allowed under the USA employment law. Despite the fact that there is no explicit prohibition of using different fonts for the different clauses of an employment contract, in Harris v. Blockbuster, Inc. the court ruled that the clause, which is non-understandable for an average employee, and which fails to attract attention may be unenforceable.
Even if the court ruled that the fine print is enforceable, the statutes of limitation in insurance claims rule that filing such a claim five years after the accident with no justification of such a delay. Failure to file a claim immediately after family of the injured person received compensation was a correct tactic in this regard, while in this case the plaintiff unreasonably stayed aside of the proceedings.
As the new Director of Compliance, you have reviewed each of the issues presented and the Vice President of legal requested that you identify any ethical concerns and provide recommendations on how to avoid both legal and ethical issues in the future. Be specific and detailed, and be sure to base recommendations on relevant legal and ethical principles.
Having analyzed current and past problems of Walexron, implementing the following recommendations seems to be necessary for ensuring long-term legal compliance and ethicality of all decisions made by the company executives:
The company legal department should make legal evaluations of all situations, concerning employees and partners of Walexron. This will help to file lawsuits, send “cease and desist” letters and prevent potential legal violations.
Before selling anything of high value, the company should conduct due diligence of the buyer to evaluate its financial capacities.
The company should dispense of all questionable legal practices, including use of ‘fine print’ clauses in its employment contracts. Additionally, the company lawyers should organize regular workshops to provide clarifications to the employees on how to act in a particular situation and what legal consequences their ordinary actions may entail.
References
Bainbridge, S. & Bainbridge, S. (2009). Corporate law. New York, N.Y.: Foundation Press.
Butler, C. & Rollnick, S. (2003). Compliance. London: Mosby.
Deakin, S., Johnston, A. & Markesinis, B. (2003). Markesinis and Deakin's tort law. Oxford England New York: Clarendon Press Oxford University Press.
Duska, R. (2007). Contemporary reflections on business ethics. Dordrecht, the Netherlands: Springer.
Elliott, C. & Quinn, F. (2002). Criminal law. Harlow: Longman.
Jones, C., Parker, M. & Bos, R. (2005). For business ethics. London New York: Routledge.
Kelly, D., Holmes, A., & Hayward, R. (2005). Business law. London: Cavendish.
MacIntyre, E. (2008). Business law. Harlow, England: Pearson Longman.
Pinnington, A., Macklin, R. & Campbell, T. (2007). Human resource management : ethics and employment. Oxford New York: Oxford University Press.
