Legal Environment of Business Objectives: Chapters 16-20

What is contained in an environmental impact statement, and who must file one? Ch 18 461

- A statement required by the National Environmental Policy Act for any major federal action that will significantly affect the quality of the environment. The statement must analyze the action's impact on the environment and explore alternative actions that might be taken - Private individuals, consumer interest groups, businesses, and others who believe that a federal agency's activities threaten the environment often use EISs as a means to challenge those activities

What is the difference between an employee and an independent contractor? Ch 16 405

- An employee is whose physical conduct is controlled or subject to control, by the employer - Independent Contractor- one who works for, and receives payment from, an employer by whose working conditions and methods are not controlled by the employer. Is not an employee but may be an agent

What federal act prohibits discrimination based on age? Ch 17 446

- Discrimination

What is the difference between disparate-treatment discrimination and disparate-impact discrimination? Ch 17 437 & 438

- Disparate-Treatment Discrimination- A form of employment discrimination that results when an employer intentionally discriminates against employees who are members of protected classes - Disparate-Impact Discrimination- Discrimination that results from certain employer practices or procedures that, although not discriminatory on their face, have a discriminatory effect

What federal statute governs working hours and wages? Ch 16 415

- Fair labor standards act

Under the Family and Medical Leave Act, in what circumstances may an employee take family or medical leave? Ch 16 416

- For family or medical reasons

What are the two most important federal statutes governing immigration and employment today? Ch 16 424

- IRCA and the immigration ac

What remedies are available under Title VII of the Civil Rights Act? Ch 17 446

- If the plaintiff successfully proves that unlawful discrimination occurred, he or she may be awarded reinstatement, back pay, retroactive promotions, and damages.

What are the four major provisions of the Clayton Act, and what types of activities do these provisions prohibit? Ch 19 486-490

- In 1914, Congress enacted the Clayton Act. The act was aimed at specific anticompetitive or monopolistic practices that the Sherman Act did not cover. The substantive provisions of the act—set out in Sections 2, 3, 7, and 8—deal with four distinct forms of business behavior, which are declared illegal but not criminal. For each provision, the act states that the behavior is illegal only if it tends to substantially lessen competition or to create monopoly. - Section 2- Price Discrimination: As amended, Section 2 prohibits price discrimination that cannot be justified by differences in production costs, transportation costs, or costs differences due to other reasons. In short, a seller is prohibited from charging a lower price to one buyer than is charged to that buyer's competitor. - Section 3- Exclusionary Practices: Under Section 3 of the Clayton Act, sellers or lessors cannot condition the sale or lease of goods on the buyer's or lessee's promise not to use or deal in the goods of the seller's competitor. In effect, this section prohibits two types of vertical agreements involving exclusive practices ¬- exclusive-dealing contracts and typing arrangements. - Section 7- Mergers: Under Section 7 of the Clayton Act, a person or business organization cannot hold stock and/or assets in another entity "where the effect... may be to substantially lessen competition." Section 7 is the statutory authority for preventing mergers or acquisitions among firms that could result in monopoly power or a substantial lessening of competition in the marketplace. - Section 8- Interlocking Directorates: Section 8 of the Clayton Act deals with interlocking directorates-that is, the practice of having individuals serve as directors on the boards of two or more competing companies simultaneously

What is insider trading? Why is it prohibited? Ch 20 505

- Insider trading is the purchase or sale of securities on the basis of information that has not been made available to the public. It is prohibited because it is in violation of Section 10(b) and SEC Rule 10b-5 which extends liability to those who take advantage of such information in their personal transactions when they know that the information is unavailable to those with whom they are dealing.

What anticompetitive activities are prohibited by Section 1 of the Sherman Act? Ch 19 477

- It prohibits certain concerted, or joint, activities that restrain trade. Meaning it requires two or more persons, as a person cannot contract or combine or conspire alone.

What are the three main goals of the Clean Water Act? Ch 18 464

- Make waters safe for swimming, protect fish and wildlife, and eliminate the discharge of pollutants into the water

What is a monopoly? What is market power? How do these concepts relate to each other? Ch 19 476

- Monopoly: A market in which there is a single seller or a very limited number of sellers. - The market power is the power of a firm to control the market price of its product. They relate to each other because monopoly has the highest degree of market power

What federal statute gave employees the right to organize unions and engage in collective bargaining? Ch 16 427

- National labor relations act (NLRA)

Under what common law theories can polluters be held liable? Ch 18 459

- Nuisance

Generally, what kind of conduct is prohibited by Title VII of the Civil Rights Act? Ch 17 437

- Prohibits discrimination against employees, applicants, and union members on the basis of race, color, national origin, religion, or gender at any stage of employment

What type of activity is prohibited by Section 2 of the Sherman Act? Ch 19 482

- Section 2 condemns "every person who shall monopolize, or attempt to monopolize." - "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [and is similarly punishable]."

What certification requirements does the Sarbanes-Oxley Act impose on corporate executives?Ch 20 517

- Section 906 requires that CEO's and CFO's certify that the information in the corporate financial statements "fairly represents in all material respects, the financial conditions and results of the operations of the issuer." This requirement makes officers directly accountable for the accuracy of their financial reporting and avoids any "ignorance defense" if shortcomings are discovered later. Sarbanes-Oxley also includes requirements to improve directors monitoring of officers activities. All members of the corporate audit committee for public companies must be outside directors. The audit committee must have a written charter that sets out its duties and provides for performance appraisal. In addition to reviewing the internal controls, the committee also monitors the actions of the outside auditor.

What are the two major statutes regulating the securities industry? Ch 20 504

- Securities act of 1933 and 1934

What are some of the features of state securities laws? Ch 20 512

- State securities laws apply mainly to intrastate transactions. Typically, state laws have disclosure requirements and antifraud provisions, many of which are patterned after Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5. State laws also provide for the registration of securities offered or issued for sale within the state and impose disclosure requirements. Methods of registration, required disclosures, and exemptions from registration vary among states. Unless an exemption from registration is applicable, issuers must register or qualify their stock with the appropriate state official, often called a corporations commissioner. Additionally, most state securities laws regulate securities brokers and dealers.

What is meant by the term securities? Ch 20 499

- Stocks and bonds issued to corporations

What is Superfund? What categories of persons are liable under Superfund? Ch 18 470

- Superfund is to help regulate the clean-up of leaking hazardous waste-disposal sites - The person who generated the wastes disposed of the site, the person who transported the wastes to the site, the person who owned or operated the site at the time of the disposal, and the current owner or operator

What federal statutes regulate air pollution? Ch 18 462

- The EPA

What agencies of the federal government enforce the federal antitrust laws? Ch 19 490

- The federal agencies that enforce the federal antitrust laws are the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC). The FTC was established in 1914 by the Federal Trade Commission Act. Section 5 of that act condemns all forms of anticompetitive behavior that are not covered under other federal antitrust laws.

What are three defenses to claims of employment discrimination? Ch 17 450

- The first line of defense for an employer charged with employment discrimination is, of course, to assert that the plaintiff has failed to meet his or her initial burden shifts to the employer to justify the discrimination - Bona fide occupational qualification, merit, and seniority