Ethics and law for managers

Question description

Assignment 2: Research Project

This assignment consists of two parts. The first part consists of the third installment for the research paper and is worth 20 points out of the 200 points allotted for this assignment. The second part requires application of concepts learned in Weeks 1–3and is worth significantly more than previous assignments and more than the first part of the assignment.

Part I—Research Paper

This week, you will research laws or regulations related to the topic you selected. The information may require research of federal and/or state laws, as well as administrative agency laws. Compare the laws of two states, if applicable. For example, if you are writing about gender discrimination, compare the federal law with law from one of the states that also provides protection at the state level. State laws often provide more protection than the federal law. Summarize the information about the laws or regulations you found related to your topic.

Compile your response to Part I in a Microsoft Word document and name it as SU_MBA5005_W3_A2_Part1_LastName_FirstInitial.doc.

Part II—Legal and Ethical Challenges in Business Organizations

Read the scenarios and the questions that follow. Identify the legal issue(s) and apply legal concepts and possible arguments for each question. After reading the scenarios, prepare a resolution for each question using laws, cases, examples, and/or other relevant materials. Consider using short headings (consult APA materials) to separate the topics. Summarize the facts; do not copy the scenarios into the paper. After you have answered the questions and before the conclusion, identify potential ethical issues and propose recommendations to help the organization avoid future occurrences of the legal and ethical issues discussed in the assignment. Support your answers with information from the textbook and at least five scholarly sources other than the text and course lectures.

By Week 3, Day 6 prepare an 8- to 12-page paper that identifies the legal issues and potential solutions and answers all questions presented, supported by relevant legal authority. Properly cite all sources using APA format. Do not exceed the page length by more than two pages, as the instructor is not required to read excess pages.

Compile your response to Part II in a Microsoft Word document and name it as SU_MBA5005_W3_A2_Part2_LastName_FirstInitial.doc.


Famous Subs and Pizza Company (FSPC) is a publicly traded corporation headquartered in Tallahassee, Florida, operating restaurants in ten states. The company also owns a food processing and distribution facility in Jackson, Mississippi. Approximately 20% of the employees work full time; however, FSPC primarily hires part-time employees as delivery drivers, cooks, and sandwich makers. FSPC leases space for most of its restaurants in shopping centers, but the company owns a few of the properties, as well as its headquarters office and the distribution facility. The company has experienced explosive growth over the last three years, but the growth has been accompanied by an increase in legal issues. The CEO, Chip Stone, seeks your advice on the following legal and ethical issues.

S1: Jurisdiction, Torts, and Agency

Faye Kennett, 4’5″ tall, visited an FSPC outlet in Birmingham, Alabama. She was four months pregnant and craved a pizza with anchovies. She took the receipt after ordering her food and was reading it while walking to a table. She noticed that the words “Fat Midget” were printed on the receipt. Before she could get to her table, Faye stepped in some water, slipped, and fell, sustaining injuries to her back and left leg. She suffered a miscarriage forty-eight hours after falling at FSPC. Kennett filed a negligence suit in an Alabama state court against FSPC, the store manager, and the employee at the register who had printed the receipt.

  • Explain whether the Alabama state court is the proper court for the lawsuit. Determine whether Kennett could have filed the lawsuit in Florida.
  • Provide arguments for Kennett, FSPC, the manager, and the employee at the register. Determine which party should win and provide support for your selection.

S2: Contracts, Agency, and Torts

FSPC hired Pete Zahutt as a delivery driver for one of its stores in Jackson, Mississippi. After five years, FSPC promoted Pete to District Manager and let him drive the company car that was wrapped with the company logo. Once or twice a week, Pete also picked up supplies at the warehouse on his way to work. With his boss’s knowledge, Pete also used the FSPC car during working hours to run some personal errands, like pick up his daughter after school. The company viewed the arrangement as an opportunity for free advertising. One Friday night, after Pete left work in the company car, he delivered two pizzas to some friends, who invited Pete in for a beer. Pete ate some pizza with his friends, drank a few beers, and left for home. On the way home, Pete was texting his girlfriend and hit another car, severely injuring himself and the driver of the other car, Al K. Seltzer. Seltzer sued Pete and FSPC; however, FSPC’s insurance company refused to cover Pete or to defend or indemnify him in the lawsuit. Pete then sued the insurance company and FSPC. The insurance company argued that Pete was not an “insured” under its policy with FSPC because he did not have permission to use the company car when the accident occurred.

The insurance policy defines an insured as “[a]nyone else while using with your permission a covered auto you own, hire, or borrow . . .”

“Permission” is “consent to use the vehicle at the time and place in question and in a manner authorized by the owner, either express or implied.”

  • Did Pete have implied permission to use the car?
  • Ignoring the issue of insurance, is FSPC (and, therefore, the insurance company) liable for the injuries sustained by Seltzer under respondeat superior? If so, on what basis?

S3: ADR, Contracts, and Employment

FSPC requires its employees to sign a confidentiality and noncompete agreement. The confidentiality portion explains that employees will be given access to critical information related to recipes, suppliers, and other similar data during their employment. Employees must agree that the information is a valuable asset and that they will not disclose the information during or after their employment. Employees must also agree to not make copies of any such information. The noncompete portion of the agreement states that during employment and for a period of two years after termination for any reason, an individual will not work for any business that derives more than 10% of its revenue from selling sub or pizza products and is located within 3 miles of any FSPC facility. Finally, the agreement provides that any dispute arising from the confidentiality and noncompete agreement shall be resolved exclusively through arbitration.

While attending college in Tampa, Florida, Dee Liver worked as a delivery driver for FSPC from June 2012 until May 2014.

Dee signed a document titled “Acknowledgment of Receipt of Employee Handbook,” which states that the handbook contains important information about the employer’s general personnel policies and Dee’s privileges and obligations as an employee. The document also states, “I understand that I am governed by the content of the Handbook and that [Employer] may change, rescind, or add to any policies, benefits, or practices described in the Handbook from time to time in its sole and absolute discretion, with or without prior notice.” Dee was not presented with the confidentiality and noncompete document until January 2014. FSPC stated that she must sign the document as part of her continued employment with the company.

Dee resigned from FSPC when she moved to Gainesville Florida to start pharmacy school. In September 2014, Dee applied for a job and was hired as a delivery driver at Papa John’s Pizza. FSPC filed a lawsuit against Dee for a breach of contract. Dee filed to dismiss the case because the agreement stated that disputes must be resolved through arbitration.

  • Provide arguments for Dee and FSPC related to the arbitration clause. Determine which party will win and provide a reference to a case or other scholarly support for your answer.
  • Ignoring the outcome of the arbitration issues, analyze the noncompete portion of the agreement. Determine which party will win and provide scholarly support for your answer.

S4: Administrative Agencies and Consumer Protection

FSPC operates a food processing plant in Mississippi, where various meat products are packaged for shipment to restaurants. After FSPC customers in Tennessee, Alabama, and Louisiana complained of becoming sick after eating roast beef subs, it was determined that the meat was contaminated with Escherichia coli, a bacteria responsible for causing food poisoning. Additional inspections immediately following the outbreak of E.coli in May 2015 revealed that the restaurants did not provide the required nutritional information for products on their menu.

  • Which government agency is responsible for protecting the public in the E. colicase? Explain the responsibilities of the agency.
  • What are the labeling requirements related to menu items in restaurants? Which agency enforces these requirements?
  • On what basis might the customers who became sick from eating the tainted meat file suit against FSPC? Explain.
  • What types of administrative penalties might FSPC face?

S5: Intellectual Property

Pepe Roni was a part-time pizza maker at FSPC and a full-time information technology major at the South University in Tampa. As part of his final project in the capstone class, Pepe developed a computer program that created the fastest and most economical routes for delivery drivers. The program also tracked the locations of drivers. Pepe called the program Deliver Fast. The program was designed to be used by any food delivery service. FSPC believes it owns the invention since Pepe was employed by the company when he developed the program. Pepe believes he owns the rights to the invention since it was created for a school project and could be used for any food delivery company.

  • Provide arguments for FSPC and Pepe regarding ownership of the invention, Deliver Fast. Determine which party should win and provide support for your answer.

S6: Employment and the Constitution

Cal Kulate worked in the accounting department at the FSPC headquarters in Florida. He started out as a cashier in one of the stores, was promoted to store manager, and was eventually promoted to the accounting department at headquarters in Florida. Cal received numerous outstanding-job evaluations over the years with the company. Cal and his partner, Jim, married recently. Jim now received medical, dental, and other benefits as part of Cal’s employment package with FSPC.

Cal reported to the director of accounting, Faith Christianson. Cal did not receive a raise for the first time in ten years, after receiving an unflattering performance review from Faith. Other employees heard Faith say, “Same-sex marriages are wrong. The Bible states that marriage should be between a man and a woman.” Faith posted Bible verses in the breakroom and at the bottom of her e-mails. Cal reported Faith’s behavior to Human Resources, but her behavior only worsened after the report.

Cal posted some comments about Faith’s behavior on his Facebook page. He asked if other employees had experienced any discriminatory actions by Faith or other managers. Cal commented that the company did not discipline Faith after he reported her behavior; therefore, he believed the company supported sexual orientation discrimination. Cal also posted an unflattering caricature of Faith on his Facebook page. One commenter suggested that Cal report the company to the EEOC. After another employee showed the posts to Faith, she demanded that Cal remove the posts. When Cal refused, he was terminated.

One of the employees who worked for Cal, Cybil Wrights, reported Faith’s treatment of Cal to the EEOC. Cybil was an at-will employee who had been with FSPC for two years. In response to the EEOC report, Faith terminated Cybil.

  • Does Cal have a valid federal or state discrimination claim against FSPC? Explain thoroughly.
  • Did the company violate Cal’s First Amendment rights by requiring him to remove information about Faith from his Facebook page? Explain thoroughly.
  • Does Cybil have any causes of action against FSPC? Identify any such causes and analyze them.

S7: Recommendations

As the new director of compliance, you have reviewed each of the issues presented. The CEO, Chip Stone, requests that you propose specific recommendations on how to avoid both legal and ethical issues in the future related to a minimum of five areas that need improvement. Be specific and detailed and be sure to base recommendations on relevant legal and ethical principles. Do not provide generic resolutions, such as “the company should provide training and implement procedures to avoid future problems.”

Submission Details:

Submit your responses to both the parts to the W3 Assignment 2 Dropbox by Week 3, Day 6.

Assignment 2 Grading Criteria Maximum Points
Part I—Research Paper

  • Provided a discussion of relevant laws and regulations related to the topic selected.
Part II—Legal and Ethical Challenges in Business Organizations

S1: Jurisdiction, Torts, and Agency

  • Evaluated the potential jurisdictions for filing the lawsuit; the arguments for Kennett, FSPC, the manager, and the employee; and which party should win.
S2: Contracts, Agency, and Torts

  • Evaluated whether Pete had implied permission to use the car and FSPC’s liability for the injuries.
S3: ADR, Contracts, and Employment

  • Analyzed arguments for both parties related to the arbitration clause, including which party will win, and provided a case to support the answer.
  • Analyzed the noncompete portion of the agreement, including which party will win, and provided scholarly support for the answer.
S4: Administrative Agencies and Consumer Protection

  • Defended a selection of the government agency responsible for protecting the public in the E. coli case and generalized the responsibilities of the agency related to FSPC’s business.
  • Defended a selection of the government agency that is responsible for enforcement of food labeling and summarized the labeling requirements related to FSPC’s products.
  • Assessed the penalties that each agency might issue to FSPC.
S5: Intellectual Property

  • Justified arguments for FSPC and Pepe regarding the ownership of the invention and selected which party should win.
S6: Employment and the Constitution

  • Analyzed the validity of any federal or state discrimination claim Cal may have against FSPC.
  • Analyzed whether the company violated Cal’s first amendment rights by requiring him to remove information about Faith from his Facebook page.
  • Analyzed any causes of action Cybil has against the company.
S7: Recommendations

  • Proposed specific recommendations on how to avoid both legal and ethical issues in the future.
Created a clear, concise, and organized report; demonstrated ethical scholarship in an accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation.
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