The Legal, Ethical, and Regulatory Environment of Business

by Fisher, Bruce D.; Phillips, Michael J.

• ISBN13: 9780538878807
• ISBN10: 0538878800
• Format: Hardcover
• Copyright: 1998-06-01
• Publisher: South-Western Pub

Summary

The chapters in this text are arranged in seven functional modules to emphasize the relevance of legal environment topics to business functions (e.g., marketing, finance, human resources, accounting, and manufacturing). Excerpted cases include substantial portions of original language of the court and competing arguments. The text presents a strong emphasis on ethics, international law, environmental law, and women's legal concerns. Internet exercises and applications new to this edition expose students to the web as a resource.

Table of Contents

TABLE OF CASES
PREFACE
MODULE 1 LEGAL and BUSINESS ETHICS, OVERVIEW, and FINDING the LAW	3	(60)
1 The Law: Legal and Business Ethics	3	(38)
Positive Law Ethical Problems	3	(1)
The Meaning, Nature, and Limits of Ethics	4	(1)
Nature (A Priori) and Limits to Ethics (Ethical Ambiguity)	5	(1)
The Ethic of Positive Law	6	(6)
Positive Law Defined	6	(1)
Some Positive Law Characteristics	6	(2)
Rushing v. Powell	8	(1)
Other Possible Weaknesses of Positive Law	8	(1)
Democratic, Constitutional, Empirically Based Positive Law: The Ethic of Our Times	9	(1)
Why Democratic, Constitutional, Empirically Based Law Is the Ethic of Our Time	10	(2)
Jurisprudence: The Study of Other Ethics (Values) Influencing Positive Law	12	(14)
The Ethic of Justice	12	(3)
Riggs v. Palmer	15	(1)
The Ethic of Power	15	(3)
Yancey v. State Personnel Board	17	(1)
The Ethic of Custom	18	(2)
Geary v. U.S. Steel Corporation	19	(1)
Advantages of Custom	20	(1)
Disadvantages of Custom	20	(1)
The Ethic of Norms of Conduct	20	(1)
The Ethic of Civilization	20	(2)
Regina v. Dudley and Stephens	21	(1)
The Ethic of Reality	22	(1)
Delaware Tire Center v. Fox	22	(1)
The Ethic of Utility	23	(3)
In the Matter of Baby M, a pseudonym for an actual person	25	(1)
Summary	26	(1)
Further Points about Legal Ethics	26	(2)
Ethical Unity	26	(1)
Which Ethic Is "Right"?	27	(1)
Communitarianism	28	(1)
Business Ethics	28	(3)
Definition of Business Ethics	28	(2)
How Business Ethics Relate to Legal Ethics	30	(1)
Manager's Ethical Decision Model	31	(1)
Strategy for Managers Confronting an Ethical Problem	31	(1)
Caveats in Applying the Manager's Ethical Decision Model	32	(1)
Objectives of Law	32	(1)
Justice, Speed, and Economy	32	(1)
Flexibility	32	(1)
Stability and Knowability	32	(1)
Why Study Law?	33	(1)
What Is the Legal Environment?	33	(1)
Chapter Summary	33	(1)
Manager's Ethical Dilemma	34	(2)
Internet Exercises	36	(1)
Discussion Questions	36	(3)
Suggested Readings	39	(3)
2 Overview and Finding Law	41	(22)
Positive Law Ethical Problem	41	(1)
Forms of Law	42	(1)
Constitutions	42	(1)
Statutes	43	(1)
Federal Administrative Regulations and Executive Orders	43	(1)
Classifications of Law	43	(9)
Substantive Law and Procedural Law	43	(1)
Civil Law and Criminal Law	44	(1)
Differences Between Civil and Criminal Law	44	(3)
Possible Overlap of Civil and Criminal Law	47	(5)
U.S. v. Usery	48	(4)
Diagrams of Civil and Criminal Law	52	(1)
Finding the Law	52	(5)
Finding National and State Constitutions	52	(1)
Finding Legislative Enactments	52	(1)
Codes Organize Statutes by Subject	52	(1)
Finding Federal Administrative Regulations	53	(1)
Finding Information About Federal Agencies	54	(1)
Finding Common Law	54	(1)
Reporters	54	(1)
Using Computers to Find the Law	55	(1)
Internet Computer Searches to Find the Law	56	(1)
How to Analyze a Case	57	(2)
What Is a Judicial Opinion?	57	(1)
Many Issues in a Case	57	(1)
The Purpose of Cases in Texts	57	(1)
The Meaning of Briefing	58	(1)
Chapter Summary	59	(1)
Manager's Ethical Dilemma	60	(1)
Internet Exercises	60	(1)
Discussion Questions	60	(1)
Suggested Readings	61	(2)
MODULE 2 Business and Legal Systems: Courts, Legislatures, Administrative Agencies, Constitutional and International Law Affecting Regulation	63	(210)
3 Sources of Law: Political and Institutional	65	(26)
Positive Law Ethical Problems	65	(1)
Political Sources of Law	66	(3)
Monarchy	66	(1)
Oligarchy	66	(1)
Democracy	66	(1)
Anarchy	67	(1)
The Social Compact (Government)	67	(1)
Hobbesian and Lockean Social Compacts	67	(1)
The U.S. Social Compact	68	(1)
Federalism	68	(1)
Federalism Today	68	(1)
Institutional Sources of Law: Courts and Legislatures	69	(19)
Courts and Court Systems	70	(1)
State Courts	70	(5)
Kopycinski v. Aserkoff	74	(1)
Federal Courts	75	(4)
In Which System Should I Sue?	79	(2)
Erie Railroad v. Tompkins	79	(2)
Legislatures and Legislative Forms	81	(4)
McBoyle v. United Steel	84	(1)
Differences Between Courts and Legislatures	85	(3)
Chapter Summary	88	(1)
Manager's Ethical Dilemma	88	(1)
Internet Exercises	88	(1)
Discussion Questions	89	(1)
Suggested Readings	89	(2)
4 Settling Legal Disputes: Alternative Dispute Resolution and Civil Lawsuits	91	(36)
Positive Law Ethical Problems	91	(1)
Alternative Dispute Resolution	92	(6)
Conciliation	92	(1)
Mediation	92	(1)
Arbitration	93	(1)
Advantages of ADR	93	(1)
Disadvantages of ADR	94	(1)
Types of Disputes for Suitable ADR Settlement	94	(1)
ADR under the Federal Arbitration Act of 1925	95	(1)
Hostility to ADR in Brokerage Disputes: Wilko v. Swan	95	(1)
Supreme Court Reassessment of Arbitration	95	(3)
Rodriguez de Quijas v. Shearson American Express, Inc.	95	(3)
SEC Rules Regarding Arbitration	98	(1)
The Attorney's Role in the Legal System	98	(8)
The Reason for Attorneys	99	(1)
Attorney Fees	99	(1)
Attorney Billings	100	(2)
Committee on Professional Ethics v. Chipokas	100	(2)
Finding a Lawyer--Attorney Advertising	102	(3)
Florida Bar v. Went For It, Inc.	103	(2)
Attorneys and the Middle Class	105	(1)
Overview of Civil Lawsuits	106	(18)
Who May Sue: The Standing Issue	106	(2)
Class Actions	108	(1)
Recognizing a Legal Wrong	109	(1)
Statute of Limitations	109	(1)
Burden of Proof	110	(1)
Jurisdiction	111	(1)
Cause of Action	111	(1)
Starting Lawsuits: The Complaint	111	(5)
Defendant's Response: The Answer	116	(1)
Pretrial Discovery and Pretrial Conferences	116	(1)
Motions	117	(1)
The Trial, Verdict, and Judgment	117	(1)
Res Judicata	117	(2)
Appeals	119	(1)
Collecting Judgment	119	(5)
Conclusion	124	(1)
Chapter Summary	124	(1)
Manager's Ethical Dilemma	125	(1)
Internet Exercises	125	(1)
Discussion Questions	126	(1)
Suggested Readings	126	(1)
5 Business and the Constitution	127	(34)
Positive Law Ethical Problem	127	(1)
The United States Constitution: An Overview	128	(1)
The Nature of Constitutional Decision Making	129	(2)
Why the Constitution's Meaning Changes	129	(1)
The Supreme Court's Power and Its Limits	130	(1)
Enumerated Powers and Independent Constitutional Checks	131	(1)
Enumerated Powers	131	(1)
Independent Constitutional Checks	132	(1)
An Introduction to the Remainder of the Chapter	132	(1)
State Power to Regulate the Economy	132	(1)
Three Enumerated Congressional Powers	133	(3)
The Commerce Power	133	(2)
United States v. Lopez	134	(1)
The Taxing Power	135	(1)
The Spending Power	135	(1)
Independent Constitutional Checks Applying to Both Congress and the States	136	(12)
Introduction	136	(4)
San Francisco Arts & Athletics, Inc. v. United States Olympic Committee	139	(1)
Business and the First Amendment	140	(2)
44 Liquormart, Inc. v. Rhode Island	141	(1)
Due Process	142	(3)
BMW of North America v. Gore	144	(1)
Equal Protection	145	(3)
City of Dallas v. Stanglin	146	(2)
Independent Constitutional Checks Applying Only to the States	148	(5)
The Contract Clause	148	(1)
State Regulation of Interstate Commerce	149	(2)
Wyoming v. Oklahoma	150	(1)
Federal Preemption	151	(2)
Wisconsin Public Intervenor v. Mortier	152	(1)
The Takings Clause	153	(3)
Taking	153	(1)
Property	153	(1)
Public Use	153	(1)
Just Compensation	154	(2)
Lucas v. South Carolina Coastal Council	154	(2)
Chapter Summary	156	(1)
Managers' Ethical Dilemma	157	(1)
Internet Exercises	157	(1)
Discussion Questions	157	(2)
Suggested Readings	159	(2)
6 Government Regulation: Overview	161	(24)
Positive Law Ethical Problems	161	(1)
Administrative Law and Administrative Agencies	162	(4)
Origin and Purpose of Administrative Agencies	162	(3)
Legislative Delegations to Agencies: Enabling Acts	165	(1)
Some Important Federal Administrative Statutes	166	(9)
Federal Register Act	166	(2)
Federal Crop Ins. Corp. v. Merrill	167	(1)
Administrative Procedure Act (APA)	168	(1)
Freedom of Information Act	168	(1)
Federal Privacy Act of 1974	169	(3)
State ex rel. Beacon Journal Pub. v. Akron	170	(2)
Government in the Sunshine Act	172	(1)
Protection for Federal Whistleblowers	172	(3)
Mintzmyer v. Department of the Interior	173	(2)
Controlling Administrative Agencies	175	(7)
The Courts	176	(1)
Sunset Laws	176	(1)
Ombudspersons	176	(1)
Federal Civil Rights Suits	177	(1)
Legislative Vetoes	177	(1)
Federal Tort Claims Act	177	(5)
United States v. Gaubert	178	(4)
Chapter Summary	182	(1)
Manager's Ethical Dilemma	183	(1)
Internet Exercises	183	(1)
Discussion Questions	183	(1)
Suggested Readings	184	(1)
7 Government Regulation: Anatomy of a Regulation	185	(34)
Positive Law Ethical Problems	185	(1)
The Functions of Administrative Agencies	186	(1)
Executive	186	(1)
Adjudicatory	186	(1)
Legislative	187	(1)
The Law Governing Federal Agencies' Regulation Making	187	(1)
The Life of a Federal Regulation	188	(20)
Step 1. Society Perceives a Problem	188	(1)
Step 2. Congress Passes an Enabling Act	188	(1)
Step 3. An Agency Studies the Problem	189	(1)
Step 4. The Agency Proposes a Regulation	189	(7)
Omnipoint Corp. v. F.C.C.	190	(5)
National Tour Brokers Association v. United States	195	(1)
Step 5. The Public Comments	196	(6)
Step 6. The Agency Promulgates, Modifies, or Withdraws the Regulation	202	(1)
Step 7. Challenges in Court to the Promulgated Regulation	202	(6)
Ethyl Corp. v. Environmental Protection Agency	203	(4)
Ernst & Ernst v. Hochfelder	207	(1)
Recent Changes in Rulemaking	208	(1)
Concluding Points About Rulemaking	208	(2)
No Right to a Hearing	208	(1)
A Warning	208	(1)
Reg-Neg: A Possible Future Direction for Federal Rulemaking	208	(1)
Help for Small Businesses in Regulation Making	209	(1)
Chapter Summary	210	(1)
Manager's Ethical Dilemma	210	(1)
Internet Exercises	211	(1)
Discussion Questions	211	(1)
Suggested Readings	212	(7)
8 Government Regulation: Enforcing and Adjudicating Regulations	219	(14)
Positive Law Ethical Problems	219	(1)
The Life of a Federal Regulation	220	(10)
Step 8. An Agency Enforces Valid Reg through Investigation, Prosecution, and Administration	220	(6)
Marshall v. Barlow's, Inc.	221	(3)
United States v. Ward	224	(2)
Step 9. Agencies Hold Adjudicatory Hearings	226	(1)
Step 10. Appeal of Administrative Law Judge's Decision	227	(3)
Wasson v. Securities and Exchange Commission	228	(2)
Chapter Summary	230	(1)
Manager's Ethical Dilemma	230	(1)
Internet Exercises	231	(1)
Discussion Questions	231	(1)
Suggested Readings	232	(1)
9 Law in International Business: Public Law	233	(18)
Positive Law Ethical Problems	233	(1)
Definition and Sources of International Law	234	(1)
The Nature and Extent of U.S. International Trade	234	(3)
Current Policy	235	(1)
Most Favored Nations Clauses in Treaties	235	(2)
Institutions Affecting International Business	237	(6)
General Agreement on Tariffs and Trade (GATT) and WTO	237	(1)
GATT Dispute Settlement Panel Report: United States--Restrictions on Imports of Tuna	238	(2)
United Nations Commission on International Trade Law (UNCITRAL)	240	(1)
European Economic Community (EEC)	241	(1)
North American Free Trade Agreement (NAFTA)	241	(2)
Overseas Private Investor Corporation (OPIC)	243	(1)
United States International Trade Commission	243	(3)
Generalized System of Preferences	244	(1)
Industry Adjustments to Import Competition	244	(1)
Import Interference with Agricultural Programs	244	(1)
International Trade: Comparing Unit Labor Costs Among Nations	244	(2)
Protecting U.S. Patents, Copyrights, and Trademarks Abroad: Special 301	246	(1)
Restraints on International Business	246	(2)
U.S. Antitrust Laws	246	(1)
Antitrust in the European Economic Community	247	(1)
Chapter Summary	248	(1)
Manager's Ethical Dilemma	249	(1)
Internet Exercises	249	(1)
Discussion Questions	249	(1)
Suggested Readings	249	(2)
10 International Law: Private Business Dealings in a Global Context	251	(22)
Positive Law Ethical Problems	251	(1)
An International Business Deal--Foreign Seller/U.S. Buyer	252	(4)
Why Art Does Not Pay Ali Directly	252	(1)
Solution: A Letter of Credit and a Bill of Lading	252	(1)
The Art-Ali Rug Contract Using a Letter of Credit and a Bill of Lading	253	(1)
Letters of Credit: The Independence Principle	253	(1)
GATX Leasing Corp v. DBM Drilling Corp.	254	(1)
Stopping Payment on Letters of Credit: Forgery	254	(1)
Stopping Payment on Irrevocable Letters of Credit: Fraud	254	(1)
Sztejn v. J. Schroder Banking Corp.	254	(1)
Harmonized Tariff Schedules	255	(1)
Importing Gray Market Goods	256	(7)
Case 1 Gray Market Goods	256	(1)
Case 2 Gray Market Goods	256	(2)
Case 3 Gray Market Goods	258	(2)
K Mart Corporation v. Cartier, Inc.	258	(2)
Bribing to Get Foreign Business	260	(1)
Act of State Doctrine	260	(3)
Riedel v. Buncam, SA	261	(2)
What to Do When Things Go Wrong in an International Business Deal	263	(6)
Ways of Settling Disputes	263	(1)
Two Problems Involving Lawsuits By and Against Foreign Governments	264	(5)
In re Union Carbide Corp. Gas Plant Disaster	265	(4)
Two Remaining Legal Problems: Expropriation and Repatriation	269	(1)
Repatriation	269	(1)
Chapter Summary	269	(1)
Manager's Ethical Dilemma	270	(1)
Internet Exercises	270	(1)
Discussion Questions	271	(1)
Suggested Readings	271	(2)
MODULE 3 Private Law Affecting Entrepreneurs	273	(110)
11 Torts: Negligence, Strict Liability, and Intentional Torts	275	(32)
Positive Law Ethical Problems	275	(1)
What Is a Tort?	276	(1)
Placing Torts in General Business Law	276	(1)
Torts Compared with Crimes	276	(1)
Tort Law Is a Legal Laboratory	277	(1)
Tort Classifications	277	(1)
Negligence	277	(11)
Duty	277	(4)
First Florida Bank v. Max Mitchell & Co.	278	(3)
Standard of Care	281	(3)
Munford, Inc. v. Peterson	282	(2)
Proximate Cause	284	(1)
Palsgraf v. Long Island Railroad Co.	284	(1)
Damages	285	(1)
Defenses to Negligence	285	(3)
Halvorson v. Voeller	286	(2)
Strict Liability	288	(1)
Why Allow Ultrahazardous Activities?	288	(1)
Defenses	288	(1)
Indiana Harbor Belt Railroad Co. v. American Cyanamid Co.	288	(1)
Intentional Torts	289	(15)
Intentional Torts Compared with Crimes	289	(1)
Intentional Torts Compared with Negligence	289	(1)
Intentional Torts Compared with Contracts	290	(1)
Remedies for Intentional Torts	290	(1)
Fraud	290	(3)
Hewlett v. Hewlett	291	(2)
False Imprisonment	293	(1)
Invasion of Privacy	294	(2)
Harkey v. Abate	295	(1)
Conversion	296	(1)
Abuse of Process	297	(1)
Wrongful Interference with Contractual Relations	297	(4)
Texaco, Inc. v. Pennzoil, Co.	298	(3)
Intentional Infliction of Mental Distress	301	(1)
Defamation	301	(3)
Jenkins v. Wal-Mart Stores, Inc.	302	(2)
Chapter Summary	304	(1)
Manager's Ethical Dilemma	305	(1)
Internet Exercises	305	(1)
Discussion Questions	305	(1)
Suggested Readings	306	(1)
12 Nature, Definition, and Classification of Contracts	307	(26)
Positive Law Ethical Problems	307	(1)
How Contracts Fit into the Market Economy	308	(2)
Trends in Contract Law	308	(1)
Philosophies Found in Contract Law	308	(1)
Law Governing Contracts	308	(1)
Contract Definitions	309	(1)
The Objective Theory of Contracts	309	(1)
Contract Classifications	310	(6)
Bilateral and Unilateral Contracts	310	(2)
Davis v. Jacoby	311	(1)
Express and Implied Contracts	312	(1)
Valid, Voidable, Void, and Unenforceable Contracts	313	(1)
Executed and Executory Contracts	313	(1)
Quasi-Contracts	313	(3)
Matter of Estate of Milborn	314	(2)
The Making of a Contract: The Offer	316	(6)
Intent Needed to Make an Offer	317	(1)
Unenforceable "Offers"	317	(1)
Invitations to Negotiate	317	(1)
Certainty	318	(1)
Communication Requirement of Offers	318	(1)
How Offers End	319	(2)
Gibbs v. American Sav. & Loan Ass'n	320	(1)
Offers to Form Unilateral Contracts	321	(1)
The Making of a Contract: The Acceptance	322	(5)
Glover v. Jewish War Veterans of the United States	322	(2)
How to Accept	324	(1)
Champagne Chrysler-Plymouth, Inc. v. Giles	324	(1)
Who Can Accept	325	(1)
Silence as Acceptance	325	(1)
Acceptances Adding to or Varying from the Offer: Common Law Exactness Rule	326	(1)
Acceptance Adding to or Varying from the Offer: The UCC Rule	326	(1)
When Is an Acceptance Effective?	326	(1)
Acceptances at an Auction	327	(1)
Consideration	327	(2)
Hamer v. Sidway	327	(1)
Reason for the Consideration Rule	328	(1)
"Bargained for" Part of the Consideration Definition	328	(1)
Adequacy of Consideration	329	(1)
Chapter Summary	329	(1)
Manager's Ethical Dilemma	330	(1)
Internet Exercises	330	(1)
Discussion Questions	330	(1)
Suggested Readings	331	(2)
13 Property	333	(28)
Positive Law Ethical Problems	333	(1)
Definition of Property	334	(1)
Legal Philosophies Reflected in Property Law	334	(1)
Property Law Is State Law	334	(1)
Title and Title Documents	335	(1)
Property Classifications	335	(1)
Personalty, Realty, and Fixtures	335	(1)
Tangible and Intangible Property	336	(1)
Public and Private Property	336	(1)
Types of Real Property Estates	336	(1)
Ways to Hold Title to Real Property	337	(1)
How Property Is Acquired	338	(10)
Theft	339	(5)
Autocephalus Greek-Orthodox Church v. Goldberg	339	(3)
Pieper v. Pontiff	342	(2)
Gift	344	(1)
Capture	344	(1)
Finding	344	(1)
Inheritance	345	(1)
Trust	346	(2)
Manufacture	348	(1)
Confusion	348	(1)
Purchase	348	(1)
Uses of Property	348	(6)
Bailment	348	(1)
Leases, Licenses, and Easements	349	(1)
The Uniform Residential Landlord Tenant Act (URLTA)	350	(4)
Allison by Fox v. Page	352	(2)
Limits on Property	354	(2)
Nuisance Law	354	(1)
Taxation	354	(1)
Eminent Domain	355	(1)
Hawaii Housing Authority v. Midkiff	355	(1)
Chapter Summary	356	(1)
Manager's Ethical Dilemma	357	(1)
Internet Exercises	357	(1)
Discussion Questions	358	(1)
Suggested Readings	359	(2)
14 Law and Technology: Protecting Inventions and Intellectual Property	361	(22)
Positive Law Ethical Problems	361	(1)
Quasi-Contract	362	(4)
Kaplan v. Michtom	363	(1)
Wolfe v. American Airlines, Inc.	364	(2)
Trade Secrets	366	(3)
Geritrex Corp. v. DermaRite Industries, LLC	366	(3)
Copyrights	369	(3)
Whelan Associates, Inc. v. Jaslow Dental Laboratories, Inc.	369	(3)
Trademarks	372	(3)
Mutual of Omaha Insurance Co. v. Novak	373	(2)
Patents	375	(5)
Violation of Someone's Patent: Infringement	376	(4)
Kearns v. Chrysler Corp.	376	(2)
Diamond v. Diehr	378	(2)
International Protection of Intellectual Property	380	(1)
Chapter Summary	380	(1)
Manager's Ethical Dilemma	381	(1)
Internet Exercises	381	(1)
Discussion Questions	381	(1)
Suggested Readings	381	(2)
MODULE 4 Law Affecting the Business Personnel Department	383	(130)
15 Employer-Employee Relations: Common Law Rules	385	(36)
Positive Law Ethical Problems	385	(1)
Employer-Employee Legal Classifications	386	(8)
Who May Be Principals	387	(1)
Who May Be Agents, Servants, and Independent Contractors	387	(1)
Effect of Different Employer-Employee Classifications	387	(4)
Fruit v. Schreiner	388	(3)
Types of Agents	391	(1)
Why Employ an Independent Contractor	391	(3)
Toyota Motor Sales v. Superior Court	392	(2)
How Agency Authority Is Created	394	(4)
Express Authority	394	(1)
Implied Authority	395	(1)
Apparent Authority	395	(2)
Northington v. Dairyland Insurance Co.	396	(1)
Ratification	397	(1)
Common Law Duties that Masters Owe Servants	398	(3)
Overstreet v. Norman	399	(2)
Common Law Duties that Principals Owe Agents	401	(3)
Geise v. Phoenix Co. of Chicago, Inc.	402	(2)
Common Law Duties That Agents Owe Principals	404	(3)
Duty to Account	404	(1)
Duty to Use Care and Skill	404	(3)
Boothby v. Texon, Inc.	405	(2)
Fiduciary Duty	407	(1)
Duty to Follow Instructions	407	(1)
Common Law Duties that Servants Owe Masters	407	(1)
Agent's or Servant's Liability to Third Persons: Torts	408	(1)
Agent's Liability to Third Persons: Contracts	408	(1)
Liability for Crimes	409	(4)
Employee Liability	409	(1)
Employer Liability	410	(1)
Corporate Employer Liability	410	(3)
United States v. Gibson Products Co., Inc.	411	(2)
How Agencies End	413	(5)
Ending the Employment Relationship: Employment At-Will	414	(3)
Wlasiuk v. Whirlpool Corp.	415	(2)
Notice of the Agency's Ending	417	(1)
Chapter Summary	418	(1)
Manager's Ethical Dilemma	419	(1)
Internet Exercises	419	(1)
Discussion Questions	419	(1)
Suggested Readings	420	(1)
16 Employer-Employee Relations: Some Important Statutes	421	(34)
Positive Law Ethical Problems	421	(1)
Job Safety and Statutory Recovery	422	(11)
Worker's Compensation	422	(5)
Cormier v. Resthaven Nursing Home	424	(3)
Occupational Safety and Health Act (OSHA)	427	(6)
Whirlpool Corp. v. Marshall	430	(3)
Workers' Financial Security	433	(19)
Fair Labor Standards Act	433	(5)
Donovan v. Burger King Corporation	435	(3)
Equal Pay Act	438	(1)
Unemployment Compensation	438	(3)
New York Tel. Co. v. New York St. Dept. of Labor	439	(2)
Social Security	441	(3)
Regulation of Employee Pensions	444	(1)
Employee Retirement Income Security Act of 1974 (ERISA)	445	(6)
Lockheed Corporation v. Speink	446	(3)
Alessi v. Raybestos-Manhattan, Inc.	449	(2)
Plant Closing Legislation	451	(1)
Chapter Summary	452	(1)
Manager's Ethical Dilemma	453	(1)
Internet Exercises	453	(1)
Discussion Questions	453	(1)
Suggested Readings	454	(1)
17 Employment Discrimination	455	(24)
Positive Law Ethical Problem	455	(1)
The Equal Pay Act	456	(3)
The Elements of an Equal Pay Act	457	(1)
EPA Defenses	457	(1)
EPA Remedies	457	(2)
Fowler v. Land Management Groupe, Inc.	458	(1)
Title VII of the 1964 Civil Rights Act	459	(10)
Coverage	459	(1)
Procedures	459	(1)
Proving a Title VII Violation	460	(1)
Defense of Title VII Claims	461	(2)
Auto Workers v. Johnson Controls, Inc.	462	(1)
Remedies for Title VII Violations	463	(1)
Race and Color Discrimination	464	(1)
Sex Discrimination	464	(3)
Griffith v. Keystone Steel and Wire	466	(1)
National Origin Discrimination	467	(1)
Discrimination Based on Religion	468	(1)
Cook v. Chrysler Corporation	468	(1)
Section 1981	469	(1)
Executive Order 11246	469	(1)
Age Discrimination in Employment Act	470	(2)
Entities Covered	470	(1)
Procedures	470	(1)
Proving an ADEA Violation	470	(1)
Defenses	470	(1)
Remedies	471	(1)
O'Connor v. Consolidated Coin Caterers Corporation	471	(1)
The Americans with Disabilities Act	472	(3)
Entities Covered	472	(1)
Prohibited Discrimination	472	(1)
Defenses	473	(2)
Sarsycki v. United Parcel Service	474	(1)
State Employment Discrimination Laws	475	(1)
Chapter Summary	475	(1)
Manager's Ethical Dilemma	475	(1)
Internet Exercises	476	(1)
Discussion Questions	476	(1)
Suggested Readings	477	(2)
18 Federal Labor Law: Unionization and Collective Bargaining	479	(34)
Positive Law Ethical Problems	479	(1)
History of Unions in the United States	480	(2)
Current Trends	480	(1)
Effect of Unions	481	(1)
Development of Labor Law	482	(2)
The National Labor Relations Board (NLRB)	484	(4)
NLRB Jurisdiction	484	(2)
Holly Farms Corp. v. NLRB	485	(1)
Unfair Labor Practices	486	(2)
Union-Employer Conflicts and Common Grounds	488	(5)
Union Organizational Efforts	489	(1)
Preelection Campaign Statements	490	(3)
NLRB v. Vemco, Inc.	491	(2)
Court Review of NLRB Union Certification	493	(14)
Frequency of Representation Election	493	(1)
Runaway Shop	494	(2)
Milwaukee Spring Division of Illinios Coil Spring Company v. National Labor Relations Board	494	(2)
Bankruptcy to Escape Collective Bargaining Agreements	496	(1)
Going Out of Business	496	(1)
Duty to Bargain	496	(1)
Bargaining Topics	497	(2)
Radisson Plaza Minneapolis v. NLRB	498	(1)
The Collective Bargaining Agreement	499	(1)
Employer Attempt to Disavow Collective Bargaining Agreements	500	(1)
Auciello Iron Works, Inc. v. NLRB	500	(1)
Collective Bargaining Agreement: Arbitration Provisions	501	(3)
United Paperworkers International Union v. Misco, Inc.	501	(2)
Fall River Dyeing & Finishing Corp. v. NLRB	503	(1)
Devices Affecting Union Security	504	(1)
Strikes and Lockouts	505	(1)
Secondary Boycotts	505	(2)
National Woodwork Manufacturers Ass'n v. NLRB	506	(1)
Voting Out the Union: Decertification Elections	507	(1)
Unions for Government Employees	508	(1)
Labor Laws Covering Federal Employees	508	(1)
Labor Laws Covering State and Municipal Government Employees	508	(1)
Chapter Summary	508	(1)
Manager's Ethical Dilemma	509	(1)
Internet Exercises	510	(1)
Discussion Questions	510	(1)
Suggested Readings	511	(2)
MODULE 5 Law Affecting Business's Financing	513	(84)
19 Business Organizations	515	(44)
Positive Law Ethical Problems	515	(1)
Sole Proprietorships	516	(2)
Legal Form	516	(1)
Reasons for Sole Proprietorships	516	(2)
Brady v. Fulghum	517	(1)
Partnerships	518	(11)
Partnership Advantages	519	(1)
Partnership Disadvantages	519	(1)
Partnership Definition	519	(1)
Partnership Existence	519	(1)
Forming Partnerships	520	(3)
Dalton v. Austin	521	(2)
Partners' Relationship to Each Other	523	(1)
Partners' Agreements	524	(1)
Partners' Salaries	524	(1)
Partners' Suits against One Another	524	(1)
Partners' Liability for Copartners' Contracts and Torts	524	(1)
Partnership Property	525	(3)
Patel v. Patel	527	(1)
Partnership by Estoppel	528	(1)
Limited Partnerships	529	(4)
A Problem	529	(1)
A Solution	529	(1)
Partners in Limited Partnerships	529	(1)
Limited Partner Registry	529	(1)
Limited Partners Are Passive	529	(4)
Overt v. Environmental Research and Development	530	(3)
Business Trusts	533	(1)
Limited Liability Partnerships (LLPS)	534	(1)
Limited Liability Companies (LLCS)	534	(1)
Corporations	535	(20)
Definition of a Corporation	535	(1)
Limited Liability and Transferable Shares	535	(1)
Professional Corporations	536	(1)
Corporations' Constitutional Rights	536	(1)
Law Governing Corporations	537	(1)
Basic Corporate Definitions	537	(1)
Model Business Corporation Act (MBCA)	538	(1)
How Corporations Are Formed	538	(1)
Promoters' Preincorporation Legal Duties	539	(1)
Corporate Existence	540	(2)
Robertson v. Levy	540	(2)
Disregard of Corporateness	542	(2)
Joslyn Mfg. Co. v. T. L. James & Co., Inc.	543	(1)
Corporate Directors	544	(5)
Pittman v. Beebe	547	(2)
Corporate Stockholders	549	(1)
Corporate Officers	549	(2)
Comparing Business Forms	551	(4)
Chapter Summary	555	(1)
Manager's Ethical Dilemma	555	(1)
Internet Exercises	556	(1)
Discussion Questions	556	(1)
Suggested Readings	557	(2)
20 Securities Regulation	559	(38)
Positive Law Ethical Problems	559	(1)
Federal Securities Laws	560	(16)
Overview	560	(3)
Definition of a Security	563	(1)
Recent Supreme Court Case Applications of Security Definition	564	(1)
Landreth Timber Co. v. Landreth	564	(1)
Securities Act of 1933	565	(3)
Exemptions from the Securities Act of 1933	568	(1)
Exempt Transactions Under the Securities Act of 1933	568	(2)
Exempt Securities Under the Securities Act of 1933	570	(1)
Civil Liability Under the Securities Act of 1933	571	(5)
Escott v. BarChris Construction	572	(4)
Criminal Punishment Under the Securities Act of 1933	576	(1)
Securities Exchange Act of 1934	576	(16)
The Securities and Exchange Commission (SEC)	578	(1)
SEA Registration Requirements	578	(1)
Securities Registration	578	(1)
SEA Reporting Requirements	578	(1)
SEA Proxy Restrictions	578	(1)
SEA Credit Restrictions	579	(1)
Short-Swing Profits	579	(1)
Section 10(b) and Rule 10b-5	580	(7)
Zaretsky v. E. F. Hutton & Co., Inc.	580	(2)
SEC v. Texas Gulf Sulphur Company	582	(3)
Dirks v. SEC	585	(2)
Federal Statute on Insider Trading (Insider Trading Sanctions Act)	587	(1)
Takeover Bids (Tender Offers)	587	(4)
Schreiber v. Burlington Northern, Inc.	589	(2)
Criminal Violations of the SEA	591	(1)
The Foreign Corrupt Practices Act (FCPA)	591	(1)
State Securities Regulation	592	(1)
Chapter Summary	592	(1)
Manager's Ethical Dilemma	593	(1)
Internet Exercises	593	(1)
Discussion Questions	594	(2)
Suggested Readings	596	(1)
MODULE 6 Law Affecting the Marketing Department	597	(110)
21 Antitrust Law	599	(34)
Positive Law Ethical Problem	599	(1)
Emergence of Antitrust Law in the United States	600	(1)
The Debate over Antitrust Policy	601	(1)
The Two Views Contrasted	601	(1)
The Sherman Act: Preliminaries	602	(2)
The Act's Reach	602	(1)
Criminal Prosecutions	602	(1)
Civil Suits	603	(1)
Sherman Act Section 1	604	(10)
Joint or Concerted Action	604	(1)
Rule of Reason and Per Se Violations	605	(3)
Business Electronics Corporation v. Sharp Electronics Corporation	606	(2)
Per Se Violations	608	(6)
Atlantic Richfield v. USA Petroleum Co.	609	(3)
FTC v. Indiana Federation of Dentists	612	(2)
Sherman Act Section 2	614	(3)
Monopolization	614	(3)
Eastman Kodak Co. v. Image Technical Services, Inc.	616	(1)
Attempts to Monopolize	617	(1)
Clayton Act Section 3	617	(2)
Tying Contracts	618	(1)
Exclusive Dealing and Requirements Contracts	618	(1)
Clayton Act Section 7	619	(1)
General Policy Considerations	619	(5)
Types of Mergers	620	(4)
United States v. Baker Hughes, Inc.	621	(3)
The Robinson-Patman Act	624	(4)
Jurisdictional Reach	625	(1)
Price Discrimination	625	(3)
Brooke Group LTD v. Brown and Williamson Tobacco Corp.	626	(2)
Buyer Inducement of Discrimination	628	(1)
Other Forms of Seller Discrimination	628	(1)
Interlocking Directorates and Officers	628	(1)
Antitrust Exemptions	629	(1)
The State Action Exemption	629	(1)
Petitioning the Government	630	(1)
Union Activity	630	(1)
Other Exemptions	630	(1)
Chapter Summary	630	(1)
Manager's Ethical Dilemma	631	(1)
Internet Exercises	631	(1)
Discussion Questions	631	(1)
Suggested Readings	632	(1)
22 The Federal Trade Commission Act and Civil Remedies for Unfair Competition	633	(22)
Positive Law Ethical Problem	633	(1)
The Federal Trade Commission	634	(3)
Description	634	(1)
Functions	634	(1)
FTC Regulation Under Section 5	634	(3)
FTC Rules, Guides, and Other Standards	637	(1)
Advisory Opinions	637	(1)
Industry Guides	637	(1)
Trade Regulation Rules	637	(1)
FTC Enforcement Devices	637	(2)
Formal FTC Action	637	(2)
Other Enforcement Devices	639	(1)
The FTC and Anticompetitive Behavior	639	(2)
Federal Trade Commission v. Superior Court Trial Lawyers Association	639	(2)
Deceptive and Unfair Acts or Practices	641	(3)
Deception	641	(3)
Federal Trade Commission v. Patriot Alcohol Testers, Inc.	642	(2)
Unfairness	644	(1)
Orkin Exterminating Co. v. Federal Trade Commission	644	(1)
Remedies in Advertising Cases	645	(1)
First Amendment Considerations	646	(1)
FTC Regulation of Franchising	646	(3)
Lanham Act Section 43(A)	649	(2)
Groden v. Random House, Inc.	649	(2)
Chapter Summary	651	(1)
Manager's Ethical Dilemma	651	(1)
Internet Exercises	652	(1)
Discussion Questions	652	(1)
Suggested Readings	653	(2)
23 Consumer Protection	655	(52)
Positive Law Ethical Problems	655	(1)
A Brief History of Consumer Protection	656	(2)
The Church and Secular Law	656	(1)
Impediments to Consumer Protection	656	(1)
Consumer Protection in the Late 19th Century and Early 20th Century	657	(1)
Modern Era Consumer Protection	658	(1)
Who Is a Consumer?	658	(1)
Why Protect Consumers?	659	(1)
Arguments Against Consumer Protection	659	(1)
Arguments Favoring Consumer Protection	659	(1)
Sources of Consumer Protection Law	659	(1)
Common Law Protection of Consumers	659	(8)
Consideration	659	(1)
Undue Influence	660	(1)
Duress	660	(1)
Fraud	661	(2)
Golding v. Williams	662	(1)
Innocent Misrepresentation	663	(1)
Contracts Contrary to Public Policy	663	(1)
Illegal Contracts	663	(1)
Unconscionability	664	(2)
Williams v. Walker-Thomas Furniture Company	665	(1)
Weaknesses in Common Law for Consumers	666	(1)
Federal Trade Commission (FTC)	667	(4)
Background	667	(1)
Consumerism	667	(1)
FTC Consumer Protection Regulations	667	(4)
The Consumer Product Safety Act	671	(4)
Consumer Product Safety Commission (CPSC)	671	(4)
Gulf South Insulation v. Consumer Prod. Safety Com'n	672	(3)
Truth-in-Lending Act	675	(4)
The Act's Role in Regulation	675	(1)
Types of Credit Covered	676	(1)
Types of Creditors Covered	676	(1)
Disclosing Credit Terms	676	(1)
Finance Charge and Annual Percentage Rate	676	(1)
Credit Cards	677	(1)
Oclander v. First Nat. Bank of Louisville	677	(1)
Credit Advertising	678	(1)
Penalties	679	(1)
Credit Records	679	(1)
Enforcers	679	(1)
Fair Credit Reporting Act (FCRA)	679	(3)
How the FCRA Works	679	(1)
Sanctions	680	(2)
Houghton v. Ins. Crime Prevention Institute	680	(2)
Equal Credit Opportunity Act (ECOA)	682	(4)
ECOA's Creditor Coverage	682	(1)
Some ECOA Applications	682	(1)
Other ECOA Provisions	683	(1)
Miller v. American Express Co.	684	(2)
Fair Credit Billing Act	686	(1)
Billing Errors	686	(1)
Discounts	686	(1)
Credit Reporting	686	(1)
Fair Debt Collection Practices Act	686	(4)
Purpose	686	(1)
Provisions of the Act	686	(4)
Venes v. Professional Service Bureau, Inc.	688	(2)
The Electronic Fund Transfer Act (ERTA)	690	(4)
EFTA Consumer Protections	691	(3)
Ognibene v. Citibank, N.A.	692	(2)
Bankruptcy	694	(8)
Straight Bankruptcy	694	(1)
Bankruptcy Consumer Protections	695	(3)
Perez v. Campbell	697	(1)
Bankruptcy Limits	698	(3)
In Re Tondreau	699	(2)
Debt Adjustment (Chapter 13 Bankruptcy)	701	(1)
1984 Amendments Affecting Consumers	701	(1)
State Statutes Protecting Consumers	702	(2)
Uniform Commercial Code (UCC)	702	(1)
Uniform Consumer Credit Code (UCCC)	702	(1)
Usury Laws	702	(1)
Occupational Licensing Statutes	703
State Consumer Protection Agencies	702	(2)
Chapter Summary	704	(1)
Manager's Ethical Dilemma	704	(1)
Internet Exercises	705	(1)
Discussion Questions	705	(1)
Suggested Readings	706	(1)
MODULE 7 Law Affecting the Manufacturing Department	707
24 Product Liability	709	(36)
Positive Law Ethical Problem	709	(1)
The Evolution of Product Liability Law	710	(2)
The 19th Century	710	(1)
The 20th Century	711	(1)
The Quest for Product Liability Reform	711	(1)
The Major Theories of Product Liability Recovery	712	(12)
Express Warranty	713	(2)
Daughtrey v. Ashe	714	(1)
Implied Warranty of Merchantability	715	(2)
Keaton v. A. B. C. Drug Co.	716	(1)
Implied Warranty of Fitness	717	(2)
Trans-Aire International Inc. v. Northern Adhesive Co.	718	(1)
Negligence	719	(2)
Ciardello v. Maxfli	720	(1)
Strict Liability	721	(3)
West v. Searle & Co.	722	(2)
Other Theories of Recovery	724	(1)
Industrywide Liability	724	(1)
A Transitional Note	725	(1)
Damages	725	(3)
Types of Damages	725	(1)
Damages Under the UCC	726	(1)
Tort Reform Measures	726	(2)
Spindler v. North Central Harvestore, Inc.	727	(1)
Who Can Recover Against Whom? The No-Privity Defense	728	(2)
Privity Under the UCC	729	(1)
Privity in Negligence and Section 402A Cases	730	(1)
Liability Disclaimers	730	(5)
The Easy Cases: Express Warranty Disclaimers, Negligence, and Section 402A Disclaimers	731	(1)
Implied Warranty Disclaimers	731	(4)
Myers v. A.O. Smith Harvestore Products, Inc.	733	(2)
Remedy Limitations	735	(2)
Construction Associates Inc. v. Fargo Water Equipment Company	736	(1)
Timing Provisions	737	(1)
Statutes of Limitations	737	(1)
Statutes of Repose	738	(1)
Defenses Involving the Plaintiff's Behavior	738	(3)
The Traditional Defenses	738	(1)
The Movement Toward Comparative Fault	739	(2)
Jiminez v. Sears Roebuck and Company	740	(1)
Chapter Summary	741	(1)
Manager's Ethical Dilemma	741	(1)
Internet Exercises	742	(1)
Discussion Questions	742	(1)
Suggested Readings	743	(2)
25 Environmental Law	745
Positive Law Ethical Problems	745	(1)
The Environmental Ethic	746	(4)
An Improvement in Calculating Gross Domestic Product (GDP)	750	(1)
Overview of Environment Law	750	(1)
The Principal Actors or Institutions	751	(1)
The National Environment Policy Act (NEPA)	751	(7)
Environmental Rights	752	(1)
Environmental Impact Statements	752	(6)
National Audubon Society v. Hoffman	765
The Clean Water Act	758	(6)
Midcourse Corrections	759	(1)
Criticisms	759	(2)
Enforcement	761	(2)
U.S. v. Frezzo Brothers, Inc.	761	(2)
The 1987 Amendments to the Clean Water Act	763	(1)
The Clean Air Act	764	(14)
Pre-Federal Air Pollution Control	764	(1)
Federal Air Pollution Control	764	(1)
1965 Amendments	764	(1)
1967 Amendments	764	(1)
1970 Amendments	764	(3)
Pollutants Covered	767	(1)
Basic Concepts	767	(1)
Enforcement	768	(3)
Commonwealth of Virginia v. U.S.	768	(3)
1977 Amendments	771	(1)
Air Pollution Costs and Benefits	772	(4)
Chevron v. National Resources Defense Council	773	(2)
United States v. Haney Chevrolet, Inc.	775	(1)
1990 Amendments to the Clean Air Act	776	(2)
Solid Waste: Resource Conservation and Recovery Act of 1976 (RCRA)	778	(3)
Goals	779	(1)
Implementation	779	(1)
Sanctions	779	(2)
United States v. Johnson & Towers, Inc.	780	(1)
Toxic Substances Control Act (TOSCA)	781	(2)
Control of Toxic Chemicals	781	(1)
Criticisms of the TOSCA	782	(1)
Nuclear Waste Policy Act	783	(3)
Nuclear Resources Defense Council v. U.S.E.P.A.	784	(2)
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)	786	(6)
U.S. v. Fleet Factors Corp.	788	(3)
Amending CERCLA	791	(1)
Endangered Species Act	792	(1)
Stages in Environmental Law	792	(2)
Window Dressing	793	(1)
Hue and Cry	793	(1)
Hard Look	793	(1)
Practical Effects	793	(1)
Chapter Summary	794	(1)
Manager's Ethical Dilemma	795	(1)
Internet Exercises	796	(1)
Discussion Questions	796	(1)
Suggested Readings	797
Appendix I The Constitution of the United States of America	A-1
Appendix II Administrative Procedure Act	A-12
Appendix III The Sherman Act	A-34
Appendix IV The Clayton Act	A-35
Appendix V The Robinson-Patman Act	A-40
Appendix VI The Federal Trade Commission Act	A-42
Appendix VII The National Labor Relations Act	A-43
Appendix VIII Title VII of the Civil Rights Act of 1964	A-51
Appendix IX Sections 402A and 402B of the Restatement (Second) of Torts	A-54
Appendix X Uniform Commercial Code	A-55
Glossary	G-1
Index	I-1