BLAW test 1
Business ethics and globalism:
American employees must be trained in cross-cultural business practices -ethics are cultural-centric -having to go beyond what is legally required and doing what ethically right
Jurisdiction over property:
Also called "in rem" (over things) jurisdiction. 2nd best jurisdiction -power to decide issues relating to property, whether the property is real, personal, tangible, or intangible -a court generally has in rem jurisdiction over any property situated within its geographical borders
American law is based largely on what?
The English Common Law
what is the defendant needing to show that fraud actually took place?
burden of proof
what happened with Enron?
managers took advantage of accounting standards to overestimate future earnings, which resulted in inflated reports of current earnings. To maintain these exaggerations, enron created subsidiaries to which it could shift unreported losses and assets with inflated values. many of these shifts occurred outside the U.S. to avoid federal income taxes. when questioned, management refused to investigate and reveal financial improprieties
what is the common law today?
the common law today governs transactions not covered by statutory law
what are interrogatories?
written questions asked under oath
3rd stage: Litigation/pretrial
~mediation-arbitration ~disposition without trial ~ dismissals with/without prejudice ~settlement ~pretrial orders ex: TRO (temporary restraining order) In Limine (most to limit irrelevant but prejudicial evidence at trail)(if it doesnt apply to why youre being sued they cant use it as evidence)
What is the golden Rule?
"Do unto others as you would have them do unto you"
What is the Newspaper test/disclosure rule?
"contemplating any business act, an employee should ask himself whether he would be willing to see it immediately described by an informed and critical reporter on the front page of his local paper-- there to be read by his spouse, children, and friends" -Warren Buffett -really good check on behavior -if you surround yourself with a bunch of crooks, this rule will not help you -there are people that don't care about what others think of them
what is Professional Ethic?
"do only that which can be explained before a committee of your professional peers" -can be a problem if your peers are more sympathetic or empathetic than the general population -ex. doctors who have maybe made the same mistake you are getting in trouble for
Quote from Justice Potter Stewart, U.S Supreme Court defining ethics
"ethics is knowing the difference between what you have a right to do, and what is the right thing to do"
Quote by Michael Joesphson:
"if everything i ever need to know about ethics was taught in kindergarten, i must have been absent a lot"
what is the Mirror Test?
"if i make this decision, will i be able to look at myself in the mirror tomorrow morning?" -instead of caring about what others think of you, can you look at yourself the next day and not regret your choice -good rule for personal behavior but maybe not business behavior -does not work if you are self centered
what is the Intuition Ethic?
"if it feels good, do it"
Hoop #1 what is jurisdiction?
"juris" = law "diction" = to speak jurisdiction is the power of a court to hear a dispute, to "speak the law" into a controversy, and render a verdict that is legally binding to the parties on the dispute
what is Archie Carroll's Pyramid of Corporate Social Responsibility?
**in triangle like food pyramid** bottom: economics-being profitable is the foundation 3rd: legal- play by the rules of the game 2nd: ethical- do what is right, just, and fair 1st: philanthropic- give back
does the law itself take away one of your rights?
**strict scrutiny test**
Americans spend approximately how much each year on civil litigation costs? and its equivalent of how much % tax on each american worker?
- $252 billion - 5%
why do we care? (business activites and the legal environment)
-Law effects REAL PEOPLE (i.e. employers, employees, and consumers) -everything you do at work is affected by the law -every functional area of business affected by law
what is the Legal Positivist school?
-Law is the supreme will of the state that applies only to the citizens of that nation at the time - law, and therefore rights and ethics, are not universal -the morality, or whether the law is "bad or good," of a law is irrelevant
Define: -damages -Injunction -Specific performance -rescission
-Money -an order to cease doing something -an order to do something -cancellation of contractual obligations
DEFINE: -Plaintiff -Defendant -Appellant/petitioner -Appellee/Respondent
- the party who files a court action - the party against whom the plaintiff filed its action - on appeal, the party challenging the trial court's disposition of the action - The other party to a disposition that has been appealed
What are the Hierarchy of sources of american law? (7)
- the united states constitution - federal statutory law -a state constitution -state statutory law -local ordinance -administrative rules and rulings -common law
Trial courts (7): the order
-"courts of record" -jury selection- voir dire -opening arguments -evidece, such as witness testimony, physical object, documents, and pictures, is introduced -witnesses are examined and cross-examined -closing arguments -verdicts and judgements are rendered
what is federal court jurisdiction?
-"federal question" cases: the rights or obligations of a party are created or defined by a federal law -"diversity" cases: the dispute is between citizens of different states, and the amount in controversy is greater than $75,000 -state courts will take basically everyone -for federal court you need a figurative ticket -you can either claim that your case involves interpretation of federal law -diversity of citizenship between the parties (one person is from one state the other is from another and you are suing for more than $75,000)
what is equal protection?
-14th amendment -government must treat similarly situated individuals in a similar manner -distinguish between substantive due process problem and equal protection problem
what is due process and equal protection?
-5th and 14th amendments provide "no person shall be deprived of life, liberty or property without due process of law" -procedural and substantive issues
why do good people sometimes do bad things?
-90% of business people say they are good people, yet we have a lot of messes in the business world because of bad choices
ADR:
-ADR describes any procedure or device for resolving disputes other than the traditional judicial process. -unless court-ordered, there is no public record. this makes ADR attractive for sensitive disputes involving employment issues, trade secrets, and other confidential matters
What is the restatements of the law
-American Law Institute -summarizes the common law of most states
Taxing and spending powers:
-Article I, Section 8 -uniformity requirement -congress can use tax and spend powers to provide essential services, encourage development of other industries -expansive interpretation of the Commerce Clause almost always provides a basis for sustaining a federal tax
What is the Supremacy Clause?
-Article VI of the constitution "Supreme Law of the Land" -in case of direct conflict between state and federal law, state law is invalid -congress can preempt states
Business and the bill of rights?
-Bill of Rights are not absolute -originally the Bill of Rights was a limit on the national government's powers -during the early 1900's, the supreme court applied the Bill of Rights to the states via the "due process" clause of the 14th amendment
Explain how to find primary sources of law
-Finding statutory law (United States code or USC) (States Statutes TX) -Finding Administrative law (Code of Federal Regulations or CFR) -Finding Case law (Supreme Court Cases/ United States Reports) (Federal Court Cases/ federal reporter and federal supplement) (State Court Cases/ Southwestern reporter)
What is the 4th amendment?
-Fourth amendment requires warrant with "probable cause." -warrant-less exceptions exist for "evanescent" evidence, or plain sight -searches of business: generally business inspectors must have a warrant (Marshall vs. Barlow's 1978)
What is the law?
-General set of rules -governing relationships among individuals and between individuals and their society -provide predictability, stability, and continuity so that people can know how to order their affairs and live their lives -Establishes the rights, duties, and privileges that are consistent with the values and beliefs of a society or its ruling group. -May change as society does --- inherent tension between need for predictability and need for adaptability
Business ethics:
-Important to understand that what is technically legal is not always ethical -ethical behavior applies to both legal and moral principles -an ethical decision is fair, right, and just -ethics are inherently subjective and contextual
What is utilitarianism?
-Jeremy Bentham and J.S. mill -an action is ethical if it provides the greatest good for the greatest number of people
what is the Positive Law Model?
-Obey the law -government imposes rules on society and punishes non-compliance -advantages: -widespread social acceptance of known, indentifiable limits -fairness and justice as underpinnings -accommodates deontolgical and utilitarian theories
the trial pt 5:
-Plaintiff's case: party may impeach the testimony or credibility of opposing witness by showing prior inconsistent statements and/or prejury -defendants case -closing arguments -jury instructions and deliberations -verdict (criminal cases: burden of proof is "beyond a reasonable doubt" and the verdict, for guilty, generally must be unanimous. if not, mistrial/hung jury) (Civil cases: generally, burden of proof is by "preponderance" of the evidence and a majority of jurors must agree on verdict. if not mistrial/hung jury) -judgment is the court's acceptance and recording of the jury's verdict
What is Kantian ethics/ Deontology?
-Premised on the belief that general guiding principles for moral behavior can be derived from human nature Kant: old German philosopher
The law...(6 things)
-Provides order -Serves as an alternative to altercation -Facilitates sense that change is possible -Encourages social justice -Guarantees personal freedoms -Serves as a moral guide
What is State commerce?
-States possess inherent police powers to regulate health, safety, public order, morals and general welfare. -"dormant" commerce clause -state laws that substantially interfere with interstate commerce will be struck down
pleadings- answer:
-The answer is the defendant's response to the allegations stated in the Plaintiff's complaint -in the answer, the defendant must admit or deny EACH allegation in the complaint
What are the issues with the intuition ethic?
-What you think feels good, others might not -it's very self centered -what feels good now might not be your best interest in a long run
what is an "unjust law"?
-a code that is out of harmony with the moral law -it is a human law that is not rooted in eternal and natural law
what is a counterclaim? cross-claim?
-a counterclaim is a lawsuit filed by the defendant against the plaintiff, in response to the original compliant -a cross-claim is against a co-plaintiff or co-defendant(stating that someone else who was not previously mentioned was a part of said crime)
what is subject matter jurisdiction?
-a limitation on the types of cases a court can hear, usually determined by federal or state statutes. -subject matter jurisdiction may be limited by the amount in controversy, the nature of the controversy, the basis for relief sought, and, in a criminal case, whether the crime alleged is a misdemeanor or felony -e.g. bankruptcy, family, or criminal cases -general (unlimited) jurisdiction -limited jurisdiction -most courts are courts of general jurisdiction -some have limited jurisdiction
The appeal:
-a party may appeal the jury's verdict or any legal issue, motion or court ruling during the trial -the party filing the appeal (appellant) files a brief that contains statement of facts, issues, rulings by trial court, grounds to reverse the judgment, applicable law and legal arguments in support of appellants position -most intermediary courts have mandatory review procedures; supreme courts usually have discretionary review(or may refuse to take the case) *only appeals questions of law* *can reverse decision and send it back*
what are the logistics of suing someone?
-adversarial system of justice -each client is represented by an attorney, although parties are allowed to present themselves (called "pro-se") -procedural rules ensure due process -adequate notice of being sued -right to tell your side of story
What is Commercial Speech?
-advertising is protected speech -restrictions must: implement substantial government interest; directly advance that interest; and go no further than necessary -Bad Frog Brewery (1998)
What is the 1st amendment (free speech part)?
-afforded highest protection by courts -symbolic speech (actions) protected as well -cannot have democracy without free speech -you are not protected from the consequences however, and only protects you from going to jail, but not from people disliking you, getting fired, blackballed, etc
what is corporate political speech?
-afforded significant protection by the first amendment but not to the degree of speech of natural persons. -Citizens United vs. FEC: struck down 63-year-old prohibition on corporations and unions using money from their general treasuries to produce and air campaign ads in races for congress and the white house; overturned a ban on corporations and unions airing campaign ads in 30 days before a primary or 60 days before a general election; maintained a centuries-old ban on donations by corporations from their treasures directly to federal candidates; upheld mandatory disclosures for campaign activity.
supreme courts:
-also known as courts of last resort -most supreme courts have discretionary review. the two most common ways to have your case heard in a supreme court are: appeals of right; by Writ of Certiorari (U.S) or Petition for Review (texas) -the U.S. supreme Court has appellate jurisdiction over both criminal and civil cases -the texas supreme court has appellate jurisdiction over only civil cases -the texas court of criminal appeals is the state court of last resort for criminal cases
what is International Dispute Resolution?
-arbitration clauses are generally incorporated into international contracts -New York Convention -International arbitration raises issues of forum selection(where should the arbitration take place?) and choice-of-law issues (which country's law should apply to the dispute?)
What is The natural Law school?
-assumes that law, rights and ethics are based on universal moral principals, inherent in nature, discoverable through the human reason - the oldest view of jurisprudence dating back to Aristotle -the declaration of independence assumes natural law, or what Jefferson called "the Law of Nature"
what is substantive due process?
-focuses on the content or substance of legislation -laws limiting fundamental rights (speech, privacy, religion) must have a "compelling state interest"
*** how do you make your arbitration clauses enforceable?****
-be clear and unmistakable -make your arbitration clause bilateral -state explicitly which party will pay arbitrator's fees, and make sure that employee/consumer will not have to pay more to arbitrate than to litigate -specify how arbitrator will be selected -spell out the costs (economical, legal, and opportunity) associated with arbitration -avoid limitations on available remedies -consider burden of travel and expense on the other side
the trial pt 3:
-bench trial (no jury) -jury selection (Voir Dire, challenges/picks jury, impanel jury, alternate jurors)
what is unprotected speech?
-certain types of speech are not protected by the first amendment: slander, obscenity (miller vs. California), fighting words -online obscenity: CDA, COPA, Children's Internet Protection Act (government vs. google)
what is the importance of ethical leadership and creating ethical codes of conduct?
-clear communications to employees -johnson & johnson: web-based ethical training
what are the constitutional powers of government?
-constitution established a federal form of government with checks and balances among three branches: executive, legislative, and judicial -national government has limited, enumerated powers delegated from states
What are some of the areas of the law that affect business decision making? (12)
-contracts, sales, negotiable instruments, creditors rights, intellectual property, e-commerce, product liability, torts, agency, business organizations, professional responsibility, court procedures
what are some functional areas of business affected by business law? (6)
-corporate management -production and transportation -marketing -research and development -accounting and finance -human resource management
what is ethics and social responsibility?
-corporate social responsibility: ~hit the "bulls eye" ~good ethics is good business
what is accountability for global business practices?
-corporate watch-dog groups -foreign corrupt practices act: follows you abroad ~prohibits U.S. businesspersons from bribing foreign officials to secure beneficial contracts ~does not prohibit bribes to minor officials whose duties are ministerial ~it is okay to "grease the wheels" -OECD convention on bribery FCPA: an investigation alone is 10's or 100's of millions of dollars so get counseling early to prevent from having to pay these expenses
what are procedural rules?
-court systems developed around the common law concept of "due process," which requires adequate notice and a fair and impartial hearing -for example, all federal trials are governed by the Federal Rules of Civil Procedure and Federal Rules or Evidence
what is original and appellate jurisdiction?
-courts of original jurisdiction-- where the case is first brought to trial -where lawsuits originate -courts of appellate jurisdiction--hears appeals from lower courts -they review questions of law
what is the fifth amendment?
-creates right to due process(fair treatment) -guarantees no person can be compelled to testify against himself in a criminal proceeding ~does not apply to corporations or partnerships~ -provides that government cannot take private property for public use without just compensation (takings clause)
pleadings- service:
-defendant served with complaint and summons -court requires personal jurisdiction (person or corporation) -Corporate defendants served via registered Agent. if the defendant is out-of-state, court can acquire jurisdiction by "long-arm" statues. -until the defendant is notified of case, the court does not have jurisdiction over them. -it the the plaintiffs job to send a copy of the lawsuit to the defendant
Answer- Affirmative defense
-defenses in which the defendant essentially claims that even if all of the plaintiffs allegations are true, the plaintiff cannot win because there is a more powerful law on the defendant's side that will allow the defendant to win
how to apply utilitarianism:
-determine which individuals will be affected by the action in question -conduct a cost-benefit analysis and -choose among alternative actions that will produce maximum social utility *Ends- based justice/ethics**
why do we study business ethics?
-directors and officers owe a complex set of ethical duties to their company, shareholders, customers, employees, suppliers, and community -when duties to these different constituencies conflict, ethical dilemmas arise -understanding and applying business ethics is essential to the long run viability of a business as well as the well-being of its offers, directors, and employees
2nd stage: what is discovery?
-discovery is the process by which parties obtain information from the opposing party prior to trial. -where there is requests for production of documents, objects, and entry upon land -requests for examinations -electronic discovery **ALWAYS GET YOUR OWN LAWYER, do not use the company's lawyer... they have the company's best interest in mind, not yours**
define: - with prejudice - without prejudice
-done/dead/the plaintiff cannot try again at suing -can try to sue again
what is the Cost Benefit analysis school? (3 + example)
-efficiency -focus on resource allocation -closely linked with utilitarianism ex: many EPA regulations
what is the historical school? (4 things)
-emphasizes the evolutionary process of law -concentrates on the origins of the legal system -law derives it legitimacy and authority from standards that have withstood the test of time -follows decisions of earlier cases
what is the Identification with the vulnerable school? (4 things)
-fairness doctrine -closely linked with natural law -caring impulse as humans leads to outrage at unfairness, which leads to social change -ex: minimum wage laws
Freedom of religion?
-first amendment may prohibit neither the "establishment" nor the "free exercise" of religion -the first amendment does not require complete "separation of church and state" -first amendment mandates accommodation of all religions and forbids hostility toward any -where you can accommodate, you must -first amendment guarantees the "free exercise" of religion -employers must reasonably accommodate beliefs as long as employee has sincerely held beliefs (Frazee vs. Illinois 1989)
How do you make ethical business decisions?
-following the law to its letter doesn't equate to ethical behavior -you must know the law and follow it, at a minimum--ignorance of the law is no excuse -understand that the gray areas of the law are usually potential ethical dilemmas -act responsibly and in good faith -when all else fails, follow the golden rule
what are the basic judicial requirements?
-for a lawsuit to proceed, litigants must jump through three major hoops: 1) jurisdiction 2) venue 3) standing
how can you anticipate and/or mitiagate the effects of each of the following in your own life and decision-making?
-framing: how you ask the question -overconfidence bias: we're bias against our own bias -self serving bias -role morality -rationalizations: tend to justify our decision "everyone's doing it, why cant i? -moral equilibrium
What are privacy rights?
-fundamental rights NOT expressly found in the Constitution, but derived implicitly from 1st, 5th, and 14th amendments -laws and policies affecting privacy are subject to the compelling interest test examples: HIPAA, Patriot Act
Approaches to Ethical Reasoning(9):
-golden rule -intuition ethic -positive law model -newspaper test/disclosure rule -mirror test -professional ethic -Kant's categorical Imperative -Utilitarianism -stakeholder model
what is the Stakeholder Model?
-identifies stakeholders and their competing interests -recognized validity of competing claims -lets stakeholders participate if possible -accepts that any decision is likely to be a compromise -sometimes we have to slow down and be more deliberate _getting away from the saying "go with your gut"
Varity Corp. Vs. Howe (1996)
-illustrates conflict between company's ethical duties to shareholders (to boost profits) and its ethical duties to its employees (to keep them employed and protect their benefits)
HOOP #3 what is standing?
-in order to bring a lawsuit, a party must have a "standing" to sue -standing is sufficient "stake" in the controversy; the party must have suffered a legal injury or the threat of a legal injury -standing also requires there be a live, justiciable controversy- not one the is moot or hypothetical **you cannot sue for things that happen to others, hypothetical, moral rage, potential of getting hurt**
what is mediation?
-involves a 3rd party (mediator) -mediator talks face-to-face with parties( who are typically in different adjoining rooms) to determine "common ground" -result is usually non-binding on the parties ~advantages: few rules, customize process, parties control results(win-win situation) ~disadvantages: mediator fees, no sanction of deadlines, no guarantee of a final result
What are Precedents?
-judicial decisions that give rise to legal principals that can be applied in future cases based upon similar facts -distinguish between binding authority (ex: statutes, constitutions, and regulations)(must be followed) and persuasive authority
what is the legal realism school? (2 things)
-jurisprudence that holds law is not simply a result of the written law, but a product of the views of judicial decision makers, as well as social, economic, and contextual influences -the law depends on who enforces it
what are the components of legal astuteness? (4)
-knowledge -attitude -proactive approach -judgement
what is negotiation?
-less than 10% of cases reach trial -negotiation is an informal discussion of the parties, sometimes without attorneys, where differences are aired with the goal of coming to a "meeting of the minds" in resolving the case -successful negotiation involves thorough preparation, from a position of strength -adversarial vs. problem solving negotiation
what are some theories of corporate social responsibility?
-maximize profits for shareholders -moral minimum: avoid causing harm and compensate for harm caused -stakeholders interest: consider the interests of stockholders, employees, customers, suppliers, creditors, and community -social contract theory: conform to society's evolving expectations in exchange for the benefits of corporate status -corporate citizenship: do good and solve social problems
Stare decisis and legal reasoning?
-method used by judges to reach a decision -many courts and attorneys frame decisions and briefs using the IRAC format
Appellate courts:
-middle and upper levels of the court system -review proceedings conducted in the trial court to determine whether the trail was conducted according to the procedural and substantive rules of law -generally, consider questions of law, but not questions of fact
Pleadings-answer:
-move to dismiss -motion for judgment on pleadings -motion for summary judgment: when there are no questions of fact remaining
what is the judiciary's role in american government?
-necessary part of our "checks and balances" system -judicial review was formally established by the U.S. supreme court in Marbury vs. Madison (1803), where Chief Justice Marshall wrote: "it is emphatically the province and duty of the judiciary to say what the law is..."
enforcing the judgment:
-once a judgment becomes final the defendant is legally required to comply with its terms -a defendant who will not voluntarily comply with a judgment can be compelled to do so by seizure and sale of assets
What are some post trial motions?
-once the trial is concluded, a dissatisfied party may: file a motion for a new trial, ask that the judge enter a judgment notwithstanding the verdict (JNOV) rendered by the jury *If they say no to above, then the loser will say basically that they want to appeal and the judge has to say yes at that point*
the trial pt 4:
-opening statements -plaintiffs case--evidence: ~witnesses: direct examination vs. cross examination ~admissibility of evidence decided by judge. parties object to admission of evidence and judge decides, as a matter of law, whether evidence may be admitted into the trial or not
stages of Litigation
-pleadings -discovery -pretrial -trial -post trial appeals and motions -enforcement and collection of judgement **settlement may occur at any of these stages**
what is personal jurisdiction?
-power of a court to compel the presence of the parties (including corporations) to a dispute to appear before the court and litigate -courts use long-arm statutes for non-resident parties based on "minimum contacts" with state. -power over defendant, power over the people within its jurisdiction Ex: The Texas court has jurisdiction over anyone in Texas
what is the Commerce clause?
-power to regulate interstate commerce defined in 'Gibbons vs. Ogden (1824)' -expansion to private businesses began with 'Wickard v. fillburn (1942)' Today commerce clause authorizes the national government to regulate virtually any business enterprise, including internet -limits: U.S. vs. Lopez (1995) debate examples: medical marijuana laws
1st stage: Pleadings- complaint
-prepare pleadings -file petition(filed by plaintiff saying why im suing and starting the suing/ complaint: ~ court acquires jurisdiction over subject matter and plaintiff ~facts: background of case(who, what, how, where) ~law: what law applies to the dispute ~prayer: what relief party seeks from the court (monetary damages, an injuction, you have to tell the court WHAT you want) -state the legal bases of your claim
what is arbitration?
-private form of dispute resolution based in contract between parties -frequently used in labor and employment disputes. many labor contracts now having binding arbitration clauses -settling of a dispute by a neutral 3rd party(arbitrator) who renders a legally-binding decision; usually an expert or well-respected government official *advantages: often faster and less expensive that traditional litigation, arbitrators are usually experts in the area of the dispute -arbitration proceedings are usually private and confidential *disadvantages: results may be unpredictable because arbitrators do not have to follow precedent or rules of procedure or evidence, arbitrators do not have to issue written opinion, little or no discovery
What are some other constitutional restrictions on government?
-privileges and immunities clause -full faith and credit clause
what is procedural due process?
-procedures depriving an individual of her rights must be fair and equitable -constitution requires adequate notice and a fair and impartial hearing before a disinterested magistrate
***what is the 10th amendment?***
-provides that powers that the U.S. Constitution does not give to the federal government are reserved for the states -Ensure states keep all power they haven't given to federal -reservation clause
Natural law vs. Positivism (3 examples)
-slavery -nuremberg trials -todays war against terrorism
but does the model go far enough? what about situations in which the law is gray or too general?
-suggests the law is a proxy for our social values -the law is a minimum behavior guideline -the law might not meet society's expectations -law doesn't answer every single question -wherever this is a choice, the rule doesn't go very far
what is motion to dismiss?
-the defendant can move the court to dismiss the action for various reasons, such as: the court lacks jurisdiction, or the plaintiff has failed to make all of the allegations, in his complaint, that the law requires (i.e., the plaintiff has failed to state a cause of action)
the trial continued:
-the defendant may "object" to plaintiff's evidence and the judge will rule on each objection. if the judge "overrules" the objection, the evidence is admitted for the jury to consider. if the judge "sustains" the objection, the evidence is not admitted into the trial
what is the Categorical imperative?
-the rightness or wrongness of an action is judged by estimating the consequence that would follow if everyone in a society performed the same action -hyped- up "golden rule" -means are as important as the end results
Enron: what was the effect?
-the truth came out -as the public learned of Enron's inflated earnings reports, it lost confidence in Enron stock -their stock plummeted -declared bankruptcy (largest-ever corporate bankruptcy in U.S.) -shareholders, including employees, lost $62 Billion dollars -thousands of people lost their jobs; the local and national economy felt (and still feeling) the ripple effects -many of Enron's top executives faced criminal and civil litigations for their roles in the downfall -Ken Lay (now dead) and Jeff Skilling were convicted on multiple counts of fraud
why can't the golden rule not be the only rule?
-there is never a guarantee of reciprocity -you could have to make a choice between two or more groups of others -does not work when you have multiple complex business choices
what is alternative dispute resolution?
-trials are a means of dispute resolution that are very expensive and sometimes take many months or years to resolve -there are "alternative dispute resolution"(ADR) methods to resolve disputes that are inexpensive, relatively quick, and give parties more autonomy(control)
consulting an attorney
-when a dispute arises that cannot be reconciled informally, parties often seek the counsel of an attorney to obtain qualified legal advice -attorneys are paid either by the hour, by a contingent fee( only plaintiff, who pays nothing upfront, but if the lawyer wins they get between 15-50%), or by a flat fee -an attorney will evaluate her client's prospective case and decide whether to file suit, or if suit has already been filed against her client, how to best defend against that suit -settlement considerations drive almost all litigation decision making
Enron: what can we learn?
-whistle blowing -importance of top-down ethical culture -problems with compensations schemes that award employees based on earnings -importance of unbiased legal and accounting advice -need for more transparent and rigorous accounting and reporting standards
Keep thinking about:
-your values and how you would uphold them in the workplace -how to maintain ethical self-awareness amidst systematic pressures -what duties you owe to your shareholders, business partners, employees, customers, and the community, and how you would resolve conflicts between these duties -how you can lead by example
What are the two separate court systems and what are their remedies?
1. Courts of law: monetary relief 2. Courts of Equity: Non-monetary relief; based on the "notions of justice and fair dealing"
Does an employer owe its retirees an ethical, as well as legal, obligation? if so what is the extent of that obligation?
1. Duty to pay the employee the agreed amount if the employee arrives for work and is able to work. 2. Provide the employee with work to do, (this is limited). However, for example, if the employee is paid by commission and the employer does not give the employee any work or if not working could damage the employee's reputation, for example if you are a senior executive in a company. Then the employer may have broken their duty to the employee. 3. Observe Health & Safety Regulations. 4. Give employees correct information about rights under their contract. 5. Give employees reasonable opportunity to have their complaints looked at. 6. There is no duty to provide references to an employee. (except where the reference is required by the Financial Service Authority.) However, if a reference is provided the employer owes a duty to the employee to make sure the reference is completed with reasonable skill and care and is true, accurate and fair. The employer also owes a duty to the receiver of the reference not to make any negligent statements about the employee. 7. The employer and employee also owe each other a duty of "Mutual Trust & Confidence", basically they must show respect for each other.
what are 2 corporate compliance programs?
1. Sarbanes-oxley Act of 2002 2. corporate Governance Principles
what is Andersen's 7-step model?
1. facts 2. ethical issues 3. alternatives 4. stakeholders 5. ethics screen of alternatives 6.practical constraints 7.decision
Order of where the case is found (at end of citation after names)
1. volume 2. book 3.page 4. year
what are a few providers of arbitration services?(6)
1.American Arbitration Association (AAA) 2. American Bar Association (ABA) 3. Better Business Bureau (BBB) 4. International Chamber of Commerce(ICC) 5. International Center for the Settlement Investment Disputes(ICSID) 6.Private, for-profit firms, like JAMS/Endispute
What are the (6) Major schools of Jurisprudential thought?
1.Natural law 2. legal positivism 3. identification with the vulnerable 4. historical 5.legal realism 6. cost-benefit analysis
what is the arbitration process?
1.parties submit case to an arbitrator or panel of arbitrators 2.parties present evidence and arguments to arbitrator 3. arbitrator renders an "award" (similar to judgment or verdict). award may be "reasoned"(written with a full explanation of reasoning) or not 4.courts are not involved in arbitration unless an arbitration clause or award needs enforcement
what is business law?
A set of enforceable rules of conduct that govern commercial relationships.
**REVIEW PROBLEM** Assume that Arthur Rabe is suing Xavier Sanchez for breaching a contract in which Sanchez promised to sell Rabe a Van Gogh painting for $3 million. A) In this lawsuit, who is the plaintiff, and who is the defendant? B) Suppose Rabe wants Sanchez to perform the contract as promised. What remedy would Rabe seek from the court? C) Now suppose that Rabe wants to cancel the contract because Sanchez fraudulently misrepresented the painting as an original Van Gogh when in fact it is a copy. What remedy would Rabe seek? D) Will the remedy Rabe seeks in either situation be a remedy at law or a remedy in equity? What is the difference? E) Suppose that the trial court finds in Rabe's favor and grants one of these remedies. Sanchez then appeals the decision to a higher court. On appeal, which party would be the appellant, and which party would be the appellee?
A) Plaintiff: Rabe defendant: Sanchez B)Specific performance C) Rescisson D) Remedy in equity -remedy of law is monetary while remedy in equity is not E) appellant: Sanchez Appellee: Rabe
START OF CHAPTER 2
Business ethics and corporate social responsibility
What are the classifications of Law? (3 either ors)
Civil or criminal? substantive or procedural? public or private?
pleadings- answer: (continued)
Defendants answer: -admits or denies each allegation in complaint -may move for change of venue -may allege affirmation defenses -may counter-claim against plaintiff
**START OF CHAPTER 6***
Dispute resolution
Exclusive vs. Concurrent Jurisdiction
Exclusive: only one court (state or federal) had the power (jurisdiction) to hear the case Concurrent: more than one court can hear the case
Style of case:
First party is appellant second party is Appellee The parties are either italicized or underlined
Example of jurisdiction over property:
If you live in florida, but your sister lives in georgia, but neither of you have been to texas Your aunt lives in TX and passes away and gives you and your sister property. You and your sister cannot decide what to do so you sue eachother. Can a TX state court hear the case? Yes because the property is in TX so they have jurisdiction
what if there is no precedent?
In cases of "first impression" where there is no precedent, the court may refer to positive law, public policy, and widely held social values in order to craft the best new precedent
What is the IRAC format?
Issue (what is the question to be resolved?) Rule (what law governs this matter?) Application (apply the law to the facts) Conclusion (decision or verdict)
Reading and understanding case law
Legal cases are identified by a "legal citation" Ex. Toyota Motor Manufacturing, Kentucky, Inc. V. Williams, 534, U.S. 184 (2002) ** this is a U.S. Supreme Court Case found in volume 534, page 184 of the U.S. Supreme Court Reporter**
Natural law rev. martin luther king jr
Letter from birmingham jail: april 16, 1963 "there are two types of law: just and unjust laws"
State and Federal Courts:
Municipal and justice court -> county court -> court of appeals -> Ct. Criminal appeals or Supreme court District court -> court of appeals -> Ct. Criminal appeals or supreme court
what happened with Mylan?
Other EpiPen packs stopped being sold so mylan raised their price to 800 dollars since they were the only one still selling the EpiPen 2-packs
What do you think of when you hear the term "business ethics"?
Oxymoron? ex. enron, worldcom, tyco, haliburton, dynegy, martha stewart, merck, lehman brothers, goldman sachs, countrywide, AIG, bear stearns, arthur andersen, monsanto, standford finanical
How do we define Business Ethics?
Principles that form from the intersection of LAW and MORALITY
what is the Doctrine of Stare Decisis?
Stare decisis is a latin phrase meaning "to stand on decided cases" -Makes the law stable and predictable -Increases judicial efficiency by relieving courts of having to reinvent legal principals for each case brought before them -"judge made law" based on precedent
What is the Common Law tradition?
The accumulation of traditions, social customs, rules, and cases developed over hundreds of years
what is a remedy?
The means given to a party to enforce a right or compensate for another's violation of a right
what is Jurisprudence?
The study of different schools of legal philosophy and how each can affect judicial decision-making
what is the Kelo Case?
U.S. supreme court said you can take land for not only public use but now public benefit
the trial:
_the trial is fundamentally an evidence presentation and authentication procedure -**to prevail in a civil trial, the plaintiff must introduce a preponderance of competent allegation in order to prove it -**in a criminal trial, the plaintiff has to show evidence 100% against defendant
what is a "just law"?
a just law is a man-made code that squares with the moral law
Enron: How did this happen?
company wide violations of ethical standards. managers took advantage of loopholes in the law to implement their schemes -corporate culture -self-dealing -no corporate introspection
**START OF CHAPTER 5**
constitutional Law
What is a process server?
for a fee, the server will find the defendant and give them the lawsuit if the plaintiff does not want to/can't for whatever reasoning
what is an example of an affirmative defense that might be asserted in a breach of contract case?
fraud
what is the 7th amendment?
in common law suits where monetary value exceeds $20, citizens have a right to a jury trial
What are the three most common ADR's?
negotiation, mediation, arbitration
should a company continue to market a slow-selling line of products for the sole purpose of employing those who work on those products?
no
what are depositions?
oral interrogation of potential witnesses under oath but not before a judge
what is the requests for admissions?
the other side will send a list of statements and ask you to admit them
HOOP #2 what is venue?
venue: within a particular jurisdiction, where is the most appropriate location for the trial? -generally, proper venue is where the injury occurred, or where the defendant resides * you can live in california, have business in California, and only operates in Cali. You take a business loan out of wells fargo and you miss a payment and they sue you. they sue in north dakota, but you say no, so you change the jurisdiction
How do we pay this "tax" mentioned previously? (4)
we.. -be legally astute -be a savvy consumer of legal services -add value to your organization -think strategically about law as a macro-environmental force
What does Cultural-centric mean?
what is legal/ethical/moral in one culture may not be in another ex: bribes, saving face, paying taxes, child labor, working conditions, etc