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WEEK 1

You have likely read about incidents such as monies paid by US businesses to foreign governments or employers tracking their employees’ use of the Internet. As the manager in one of these organizations, could you determine whether such actions are legal and ethical?

One of the major challenges faced by managers is to identify the legality of a particular action. Determining whether an action is legal is not always simple, because there are numerous laws that regulate a business, and while making a decision, a manager may violate one of them without even realizing it. In addition, there are numerous gray areas  in some laws, making it difficult to predict with certainty how a court may apply a given law to a particular action. In evaluating the options, the manager must also consider the ethical implications of the decision.

Let’s explore the foundations of the legal and regulatory environment, which include sources of law, the U.S. Constitution, and administrative law. In addition, you will compare various forms of alternative dispute resolution and examine the importance of administrative law to business organizations.

Your Learning Objectives for the Week:
Using information literacy, analyze laws, cases, and articles as they apply to legal issues commonly encountered by
Using executive communication skill, propose ethical strategies and solutions to business problems.

Ethics and the Law

Have you ever considered the differences between law and ethics? In general terms, ethics deals with values associated with human conduct and provides guidance related to why and how individuals should act. Law provides rules established by society that govern the conduct of individuals. Ethics are often integrated into laws; however, just because an action is legal does not mean all members of society will agree the action is ethical. Let’s look at an example.

To keep the costs of its products low, Widget Trading Company outsources work to Vietnam where the minimum wage is lower than the amount paid in the United States. As long as Widget Trading Company pays the wage required by law in Vietnam, its actions are legal, but views may be divided as to whether the actions are ethical.

One of the major challenges faced by managers in today’s business environment is balancing law and ethics with the realities of business. Determining whether an action is legal is not always simple, because there are numerous laws that regulate a business, and while making a decision, a manager may violate one of them without even realizing it. In addition, there are numerous gray areas in some laws, making it difficult to predict with certainty how a court may apply a given law to a particular action. Although it may be convenient for businesspersons to satisfy themselves by merely complying with the law, such an approach may not always yield ethical outcomes. In short, the law has its limitations, and it cannot make all your ethical decisions for you. When the law does not provide clear-cut answers, ethical standards must guide your decision-making process.

Because there are numerous laws that regulate a business, determining whether an action is legal is not always simple. A manager may violate a law or land in an ethical dilemma without even realizing it. In addition, there are numerous gray areas in law and ethics, making it difficult to predict with certainty how a court may apply a given law or how the public will react to a particular action .

To deepen your understanding of the concepts introduced in the lecture, consider reading some additional scholarly articles and landmarks cases on this topic. To get you started, review the following articles, available in the SUO Library and cases available on the Internet. These materials provide information that will assist you in completing assignments in this lesson.

Bagley, C. E., Clarkson, G., & Power, R. M. (2010). Deep links: Does knowledge of the law change managers’ perceptions of the role of law and ethics in business? Houston Law Review, 47(2), 259–295.
Blodgett, M. S. (2011). Substantive ethics: Integrating law and ethics in corporate ethics programs. Journal of Business Ethics, 99, 39–48. doi:10.1007/s10551-011-1165-6
Peterson, E. A. (2013). Compliance and ethics programs: Competitive advantage through the law. Journal of Management & Governance, 17(4),

1027–1045. doi:10.1007/s10997-012-9212-y

Sources of Law and Dispute Resolution

Primary sources of American law include the U.S. Constitution, state constitutions, state and federal statutes, administrative agency regulations, and case law, which is established by court decisions. Secondary sources of law summarize and clarify primary sources of law and include law review articles, legal encyclopedias, and similar compilations of law. Courts may utilize secondary sources for guidance in interpreting the primary sources.

Any type of business entity may get involved in a lawsuit. Some of the issues businesses are sued for include:

Product liability
Contractual and e-commerce disputes
Labor and management disputes
Discrimination and wrongful termination

Litigation is expensive and time consuming and may damage a company’s reputation; therefore, businesses often look for alternative mechanisms to resolve disputes. Alternative dispute resolution (ADR) provides companies with opportunities to reduce legal expenses and resolve issues quickly in a more informal, less adversarial environment. The three types of ADR most frequently used include arbitration, mediation, and negotiation. Arbitration clauses are very common in employment contracts and consumer purchases. The next time you sign a contract, see if you can locate the requirement for alternative dispute resolution.

The search for alternative means to resolve disputes has produced a variety of options. Let’s examine a few of the options parties can use to resolve disputes.

Types of Dispute Resolution

Negotiation

Parties control the process and solution
Takes place with or without a third party
Binding if agreement turned into a contract Mediation (Assisted Negotiation)
Neutral third party assists but does not decide
Generally non-binding Arbitration
Generally included in contracts
Neutral third party renders decision
Binding or non-binding Minitrial
Attorneys make presentations to officials from each side
Third parties provide advisory opinions Summary Jury Trials
Complex issues
Each side presents case to a jury
Jury renders an advisory verdict
Binding and non-binding
If no settlement, then formal trial Early Neutral Evaluation

Neutral attorney meets with parties
Renders opinion
Encourages settlement Online Dispute Resolution
Popular with online merchants
Conducted electronically
Small to medium sized business liability

The Constitution and Business Regulation

The U.S. Constitution is the supreme law of the land. The first ten amendments to the Constitution are called the Bill of Rights. The amendments apply to natural persons and most apply to business entities as well. Amendments 1, 2, and 4 are most frequently encountered by businesses.

The First Amendment guarantees the freedom speech, which protects political and commercial speech made by corporations. The First Amendment also guarantees that a person can hold any religious belief; therefore, businesses may be required to make accommodations for the religious beliefs of their employees.

The Second Amendment guarantees people the right to bear arms. Businesses struggle to balance protection of employees and customers with legislation, known as Bring Your Gun to Work, that allows individuals to leave firearms in locked vehicles in workplace parking lots.

The Fourth Amendment protects individuals from unreasonable search and seizure by officers of the government. The Fourth Amendment does not provide the same protection for searches conducted by nongovernmental parties, such as corporations; however, corporations must ensure that they accommodate employees relative to these rights to avoid potential litigation and penalties.

Although the Constitution was drafted over 200 years ago, interpretation of various provisions continues to vary and courts are often drawn into complicated decisions involving the rights of citizens. The First and Second Amendments create a significant amount court cases.

To deepen your understanding of the concepts introduced in the lecture, consider reading some additional scholarly articles and landmarks cases on this topic. To get you started, review the following articles available in the SUO Library and cases available on the Internet . These materials provide information that will assist you in completing assignments in this lesson.

Rahe, L. T. (2003). Zelman v. Simmons- Harris and the private choice doctrine. Cleveland State Law Review, 50(2), 221–262.
Sanders, D., Pattison, P., & Ross, J. K. (2015). The employer’s conundrum of firearms and parking lots. Southern Law Journal, 25(1), 25–56.
H. v. Easton Area Sch. Dist., No. 11-2067 (3d Cir. Aug. 5, 2013).

Bland v. Roberts, 730 F.3d 368 (4th Cir. 2013).

Administrative Law

Administrative law consists of rules, orders, and decisions of administrative agencies of federal, state, and local governments. These agencies are established to perform a specific function, such as the Internal Revenue Service (IRS), the Food and Drug Administration (FDA), and the Environmental Protection Agency (EPA).

Administrative agencies provide alternatives to courts for the resolution of disputes. Court proceedings are expensive and time consuming; therefore, administrative agencies are able to take action without lengthy court hearings, as needed, to protect the public.

Administrative agencies address social and safety issues related to employment discrimination, securities, automobiles, drugs, food, the environment, and other matters. For example, the FDA was established to legislate and enforce laws that protect the consumer’s health and safety.

Products regulated by the FDA include food, drugs, and other similar items.

Managers must be able to identify which agencies regulate their businesses, and become familiar with the laws the agencies enforce in order to avoid noncompliance. Violating administrative laws can result in loss of licenses and imposition of penalties, which may impact a company’s reputation, financial health, and ability to provide goods and services.

In law, a citation is used to identify the source of any legal proposition or rationale introduced into a legal argument. The legal source can be the US Constitution, a statute, a reported case, or some other type of regulation.

For detailed information on how to cite legal references, please see Appendix 7.1 in Publication Manual of the American Psychological Association.

Since this course is part of the business curriculum, other references such as the textbook, journal articles, websites, and similar resources should be cited according to regular APA rules, as the Bluebook provides different formats for these resources.

Legal Citations

Citing Legal Sources

In law, a citation is used to identify the source of any legal proposition orrationale introduced into a legal argument. The legalsource can be theUS Constitution, a statute, a reported case, orsome other type ofregulation.

For detailed information on how to cite legal references, please see Appendix 7.1 in Publication Manual of the American Psychological Association.

Note: Since this course is part of the business curriculum, other references such as the textbook, journal articles, websites, and similar resources should be cited according to regular APA rules, as the Bluebook provides different formats for these resources.

How to Read a Legal Citation

A legal citation in its basic form includes a volume number, an abbreviated title of the source, and the beginning page orsection number. The citation may also include the year.

A legal citation for the reference section should have the following structure:

The name of the case (italicized) using a lower case “v” to separate the parties Konop v. Hawaiian Airlines, ,
The volume number ofthe reporter containing the case,the abbreviated name ofthe reporter, and the page number on which the case begins. 302 F.3d 868
The abbreviation ofthe courtthat decided the case and the yearthe case was decided, enclosed in parentheses and followed by a period. (9th Cir. 2002).
Konop v. Hawaiian Airlines, Inc., 302 F.3d 868 (9th Cir. 2002).

The in-text citation includesthe names ofthe parties and the yearthe case was decided.

Konop v. Hawaiian Airlines, Inc. (2002) or (Konop v. Hawaiian Airlines, Inc., 2002)

Smith v. Connecticut, 381 U.S. 479, 480 (1967)

Entity

Description

Feedback

Smith v. Connecticut

The names of the parties involved (or the name of the case)

This includes the names of the parties involved (in other words, this is the name of the case).

381 U.S.

The volume number of and the abbreviation of the reporter

The case is reported in volume 381 of the United States Reports (abbreviated “U.S.”).

The Supreme Court decided the case. Because the United States Reports publishes only cases that the Supreme Court decides, the court deciding the case may be inferred from the reporter.

479, 480

The page number in the reporter on which the case begins

The case begins on page 479 of that volume of the reporter. 480 is the pinpoint page.

Pinpoint cites direct readers to specific pages within the opinion.

1967

The year the judgment was rendered

The year of the opinion is important as dates inform readers of how recent the decision is.