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LWC1
fundamentals of business law and ethics
| Question | Answer |
|---|---|
| Alternative dispute resolution (ADR) | is any formal or informal process to settle disputes without a trial. Mediation, arbitration, and other forms of ADR are growing in popularity |
| The plaintiff's burden of proof | meaning that its version of the facts must be at least slightly more persuasive than the defendant's |
| The rules of evidence determine | what questions may be asked during trial, what testimony may be given, and what documents may be introduced. |
| non obstante veredicto or a new trial | The losing party may ask the trial judge to overturn the verdict |
| The traditional common law rule of employment | provided that an employee at will could be fired for a good reason, a bad reason, or no reason at all |
| The National Labor Relations Act prohibits | employers from penalizing workers for union activity |
| The Family and Medical Leave Act guarantees | workers up to 12 weeks of unpaid leave each year for childbirth, adoption, or medical emergencies for themselves or a family member |
| An employer who fires a worker for a bad reason | is liable under a theory of wrongful discharge |
| an employee may not be fired for | refusing to break the law, exercising a legal right, or performing a legal duty. |
| Whistleblowers | receive some protection under both federal and state laws |
| Oral promises made during the hiring process | may be enforceable, even if not approved by the company's top executives. An employee handbook may create a contract |
| Employers may be liable for defamation | if they give false and unfavorable references |
| The goal of the Occupational Safety and Health Act | is to ensure safe conditions in the workplace |
| Employees have a limited right to | privacy in the workplace |
| The Fair Labor Standards Act regulates | minimum and overtime wages. It also limits child labor |
| Workers' compensation statutes ensure | that employees receive payment for injuries incurred at work |
| The Social Security system pays benefits to workers | who are retired, disabled, or temporarily unemployed and to the spouses and children of disabled or deceased workers |
| The Employee Retirement Income Security Act | regulates private pension plans |
| Under the Equal Pay Act | an employee may not be paid at a lesser rate than employees of the opposite sex for equal work |
| Title VII of the Civil Rights Act of 1964 | prohibits employers from discriminating on the basis of race, color, religion, sex, or national origin |
| The Age Discrimination in Employment Act | prohibits age discrimination against employees or job applicants who are age 40 or older. |
| The Americans with Disabilities Act prohibits | employers from discriminating on the basis of disability |
| Section 7 of the National Labor Relations Act (NLRA) | guarantees employees the right to organize and join unions, bargain collectively, and engage in other concerted activities |
| Section 8(a) of the NLRA | makes it an unfair labor practice for an employer to interfere with union organizing, discriminate against a union member, or refuse to bargain collectively |
| Section 8(b) of the NLRA | it an unfair labor practice for a union to interfere with employees who are exercising their rights under §7, to encourage an employer to discriminate against an employee because of a labor dispute, to refuse to bargain collectively |
| Section 9 of the NLRA | makes a validly recognized union the exclusive representative of the employees |
| During a union organizing campaign | an employer may vigorously present anti-union views to its employees, but it may not use threats or promises of benefits to defeat the union effort |
| The National Labor Relations Board (NLRB) | will certify a proposed bargaining unit only if the employees share a community of interest. |
| The employer and the union must bargain | over wages, hours, and other terms and conditions of employment. They may bargain other subjects, but neither side may insist on doing so |
| The union and the employer must bargain in good faith | but they are not obligated to reach an agreement. Management may not unilaterally change wages, hours, or terms and conditions of employment without bargaining to impasse. |
| The NLRA guarantees | employees the right to strike, with some limitations |
| After an economic strike | an employer is not obligated to lay off replacement workers to give a striker her job back, but it may not discriminate against a striker |
| After a ULP strike | the striking worker must get her job back |
| Picketing the employer's workplace in support of a strike | is generally lawful; a secondary boycott is generally illegal |
| An employer may lock out workers | only after giving them notice |
| Multi-employer bargaining and implementation | do not violate antitrust laws |
| The duty of fair representation requires | that a union represent all members fairly, impartially, and in good faith |
| Section 7 of the National Labor Relations Act (NLRA) | guarantees employees the right to organize and join unions, bargain collectively, and engage in other concerted activities |
| Section 8(a) of the NLRA | makes it an unfair labor practice for an employer to interfere with union organizing, discriminate against a union member, or refuse to bargain collectively |
| Section 8(b) of the NLRA | makes it an unfair labor practice for a union to interfere with employees who are exercising their rights under §7, to encourage an employer to discriminate against an employee because of a labor dispute, to refuse to bargain collectively, |
| Section 9 of the NLRA | makes a validly recognized union the exclusive representative of the employees |
| During a union organizing campaign | an employer may vigorously present anti-union views to its employees, but it may not use threats or promises of benefits to defeat the union effort |
| The National Labor Relations Board (NLRB) | will certify a proposed bargaining unit only if the employees share a community of interest |
| The employer and the union must bargain over | wages, hours, and other terms and conditions of employment. They may bargain other subjects, but neither side may insist on doing so |
| The union and the employer must bargain in good faith | but they are not obligated to reach an agreement. Management may not unilaterally change wages, hours, or terms and conditions of employment without bargaining to impasse |
| The NLRA guarantees employees the right to strike | with some limitations |
| After an economic strike | an employer is not obligated to lay off replacement workers to give a striker her job back, but it may not discriminate against a striker |
| After a ULP strike | the striking worker must get her job back |
| Picketing the employer's workplace in support of a strike | is generally lawful |
| a secondary boycott | is generally illegal |
| An employer may lock out workers | only after giving them notice |
| Multi-employer bargaining and implementation | do not violate antitrust laws |
| The duty of fair representation requires | that a union represent all members fairly, impartially, and in good faith |
| express warranty | May be created by an affirmation of fact, a promise, a description of goods, or a sample, but it must have been the basis of the bargain |
| express warranty example | Salesman says,” This helicopter will operate perfectly at 16,000 feet |
| express warranty potential issue | Written contract may disclaim any and all oral warranties |
| Implied Warranty of Merchantability | The Code implies that the goods are fit for their ordinary use. |
| implied warranty of merchantability example | Buyer purchases a deep freezer. The Code implies a warranty that it will keep food frozen. |
| implied warranty of merchantability potential issue | Seller may disclaim this warranty only if a conspicuous disclaimer includes the word “merchantability. |
| Implied Warranty of Fitness | The Code implies that the goods are fit for buyer's special purpose that seller knows about |
| implied warranty of fitness example | Where seller knows (1) buyer wants pine trees to plant in sandy soil, and (2) buyer is relying on seller's judgment, the trees carry an implied warranty that they will grow in that soil. |
| implied warranty of fitness potential issue | Seller may disclaim this warranty with conspicuous writing, but note that some states will disregard a disclaimer of any implied warranty in a consumer sale |
| Implied Warranty of Title | The Code implies that seller has good title, free of any security interests and claims of patent, copyright, or trademark. |
| implied warranty of title example | Seller sells a stolen car to buyer, who must later return it to the rightful owner. Seller has breached his warranty of good title and owes buyer her full damages |
| implied warranty of title potential issue | Buyer is not protected against any security interests that she knows about |
| Negligence | Seller is liable if she fails to show level of conduct that a reasonable person would use |
| Negligence example | Manufacturer sells bathing suit made of miracle fabric; buyer swims in ocean where saltwater makes garment transparent; seller's failure to test the suit in saltwater was unreasonable and leaves seller liable. |
| Negligence potential issue | No duty to warn if the danger is obvious. (In the bathing suit example, the danger is not obvious and there was a duty to warn.) |
| Strict Liability | Seller liable if the product leaves in a dangerously a defective condition |
| Strict Liability example | Can of barbecue lighter fluid explodes in the users hand because the can's metal was defective; manufacturer took every reasonable precaution to test and inspect every can leaving factory; that reasonable care is irrelevant and seller is liable |
| Strict Liability potential issue | Injured buyer need not prove negligence but must prove that the product was defective |
| The Securities and Exchange Commission (SEC) | regulates the relationship between publicly held corporations and their shareholders |
| The SEC plays a less active role | in privately held corporations |
| Shareholders have the right to (1) | •Receive annual financial statements |
| Shareholders have the right to (2) | •Inspect and copy the corporation's records (for a proper purpose) |
| Shareholders have the right to (3) | •Elect and remove directors; and •Approve fundamental corporate changes, such as a merger or a major sale of assets |
| Virtually all publicly held companies solicit proxies | from their shareholders. |
| A proxy authorizes | someone else to vote in place of the shareholder |
| Under certain circumstances, public companies must include | shareholder proposals in the proxy statement |
| A shareholder who objects to a fundamental change in the corporation | can insist that her shares be bought out at fair value |
| dissenters' rights | A shareholder who objects to a fundamental change in the corporation can insist that her shares be bought out at fair value |
| Controlling shareholders (1) | •May not enter into unfair business transactions with the corporation •Have a fiduciary duty to minority shareholders |
| Controlling shareholders (2) | •May not exclude minority shareholders from beneficial arrangements involving stock; and •Are prohibited from expelling minority shareholders, unless the expulsion is done for a legitimate business purpose |
| Congress, the NYSE, and Nasdaq | have all taken steps to prevent management abuses |
| Congress, the NYSE, and Nasdaq have all taken steps to prevent management abuses | These new regulations require that companies adopt effective financial controls. They also require more independent directors on the board as a whole and on important subcommittees. |
| A derivative lawsuit is brought by shareholders to remedy a wrong to the corporation | The suit is brought in the name of the corporation, and all proceeds of the litigation go to the corporation. |
| If a group of shareholders all have the same claim against the corporation | they can join together and file a class action, rather than suing separately. |
| A security is | any transaction in which the buyer invests money in a common enterprise and expects to earn a profit predominantly from the efforts of others |
| Before any offer or sale | an issuer must register securities with the SEC, unless the securities qualify for an exemption. |
| These securities are exempt from the registration requirement | government securities, bank securities, short-term notes, nonprofit issues, insurance policies, and annuity contracts |
| If a final registration statement contains a material misstatement or omission | the purchaser of a security offered under that statement can recover from everyone who signed it. |
| The 1934 Act requires | public companies to make regular filings with the SEC |
| Under §16 | insiders who buy and sell or sell and buy company stock within a six-month period must turn over to the corporation any profits from the trades. They must also disclose any trades they make in company stock. |
| Section 10(b) prohibits | fraud in connection with the purchase and sale of any security, whether or not the issuer is registered under the 1934 Act |
| Section 10(b) also prohibits | inside trading |
| Under the Foreign Corrupt Practices Act | it is a crime for any U.S. company to make payments to foreign officials to influence a government decision. This statute also requires reporting companies to keep accurate records. |
| The NSMIA prohibits states from regulating securities offerings that are | •Traded on a national exchange •Exempt under Rule 506, or •Sold to “qualified purchasers |
| Any securities offerings not covered by the NSMIA must comply with | state securities laws, which are varied and complex. |
| The five elements of negligence are | duty of due care, breach, factual causation, foreseeable type of harm, and injury |
| In most states, a landowner's duty of due care is | lowest to trespassers; often higher to children; higher still to a licensee (anyone on the land for her own purposes but with the owner's permission); and highest of all to an invitee (someone on the property as of right). |
| contributory negligence state | a plaintiff who is even slightly responsible for his own injury recovers nothing |
| comparative negligence state | the jury may apportion liability between plaintiff and defendant |
Created by:
nrobionson
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