Week 3 Chapter Question

Complete the following problems from your textbook, located at the end of each respective chapter. Save your work as a WORD document, then SUBMIT it to the SUBMISSION LINK for this assignment.

You do not need to write out the questions. However, you must write out your responses in complete sentences. Please be very thorough and detailed. This is your opportunity to “show-off” what you learned this week.

Chapter 18


Conflicts of interest. Oxy Corp. is a negotiating with Wick Construction Co. for renovation of Oxy’s corporate headquarters. Wick, the owner of Wick Construction Co. is also one of the five members of Oxy’s board of directors. The contract terms are standard for this type of contract, Wick has previously informed two other directors of his interest in the construction company. Oxy’s board approves the contract by three-to-two votes, with Wick voting the majority. Discuss whether this contract is binding on the corporation. (see Directors and Officers)

Chapter 19


Employee versus independent Contractor. Stephen Hemmerling was a driver for the Happy Cab Co. Hemerling paid certain fixed expenses and followed various rules relating to the use of the Cab, the hours that could be worked, and the solicitation of fares, among other things. Rates were set by the state. HappyCab did not withhold taxes from Hemmerling’s pay. While driving the cab, Hemmerling was injured in an accident and files a claim for workers compensation benefits in a state court. Such benefits are not available to independent contractors. On what basis might the court hold that Hemmerling wan an employee? Explain. (See agency Law)


Agent’s Duty to Principal. William and Maxine Miller were shareholders of Claimsco International, Inc. They filed a suit against the other shareholder, Michael Haris and keneeth Hooxie, an the accountant  who worked for all of them- John Verchota. Among other things, the Millers alleged that Verchota had breached a duty that he owed them. They claimed that harris’s instruction, Verchota had taken various actions that placed them at a disadvantage to the other shareholders. Verchota had allegedly adjusted Claims co’s book to maximize the millers financial liabilities, for instance, had falsely reported distributions of income to them without actually transferring that income. Which duty are the Millers referring to? If the allegations can be proved, did Verchota breach this duty? Explain. (see duties of agents and principals)


Agency Relationships. Standard Oil of Connecticut, Inc., sells home heating cooling, and security systems. Standard schedules installations and service appointments with its customers and then contracts with installers and technicians to do the work. The company requires an installer or technicians to do the work. The company requires an installer or technician to complete a project by a certain time but to otherwise “exercise independent judgment and control in the execution of any work” The installer and the technicians are licensed and certified by the state. Standard does train them, provide instructions and manuals, supervise them at customer’s home, or inspect their work. The installers and technicians use their own equipment and tools, and they choose which days they work. Standard pays a set rate per project. According to criteria used by the courts, are these installers and technicians’ independent contractors or employees? Why? (see agency laws)

Chapter 20


Wrongful Discharge. Denton and Carlo were employed at an appliance plant. Their job required them to preform occasional maintenance work while standing on a wire mesh twenty feet above the plan floor. Other employees had fallen though the mesh, and one of them had been killed in the fall. When their supervisor told them to preform tasks that would likely involved walking on the mesh, Denton and Carlos refuses because they were feared they might suffer bodily injury or death. Because they refuse to do the requested work, the two employee were fired from their job. Was their discharge wrongful? If so, under what federal employment law? To what federal agency or department should they turn for assistance? (see employment at will)


Exceptions to the Employment-at-will Doctrine. Li Li worked for Packard Bioscience, and Mark Schmeizl was her supervisor. In March 200, Schmeizl told Li to call Packard’s competitors, pretend to be potential customer, and request “pricing information and literature,” Lil refuse to preform the assignment. She told Schmeizl that she though the work was illegal and recommended that he contact Packard’s legal department. Although a lawyer recommended against the practice, Schmeizl insited that Lil perform the calls. Moreover, he later wrote negative performance reviews because she was unable to get the requested information when she called competitors and identified herself as a Packrad employee. On June 1, 2000, Lil was terminated on Schmeizl’s recommendation. Can Lil bring a claim for wrongful discharge? Why or why not? (see employment at will).

Chapter 21


Title VII Violations. Discuss fully whether either of the following actions would constitute a violation of Title VII of the Civil Rights Act, as amended: (See Title VII of the Civil Rights Acts.)

a.     Tennington, Inc., is a consulting firm with ten employees. These employees traveled on a consulting job in seven states. Tennington has an employment record of hiring only white males.

b.     Novo Film is making a movie about Africa and needs to employ approximately one hundred extras for this picture. To hire these extras, Novo advertises in all major newspapers in South California. The ad states that only African American need apply.


Sexual Harrassment. Jamel Blanton was a male employee at a Pizza hut restaurant operated by Newton Associates, Inc. in San Antonio, Texas. Blanton was subject to sexual and racial harassment by the general manager, who was female. Newton had a clear, straightforward antidiscrimination policy and complaint procedure. The policy provided that in such a situation, an employee should complain to the harasser supervisor. Blanton altered a shift leader and an assistant manager about the harassment, but they were subordinate to the general manager and did not report the harassment to higher level management. When Blanton finally complained to a manager with authority over the general manager, the employer investigated and fire the general manager within four days. Blanton filed a suit in a federal district court against Newton, seeking to impose liability on the employer for the general manager’s actions. What is Newton’s best defense? Discuss.

Chapter 22


Unfair Labor Practice. Consolidated Store is undergoing a unionization campaign. Prior to the union election, management states that the union is unnecessary to protect workers. Management also provides bonuses and wage increases to the workers during this period. The employees reject the union. Union organizer’s protest that he wage increase during the election campaign unfairly prejudiced the vote. Should these wage increase ne regarded as an unfair labor practice? Discuss.

Chapter 27


Antitrust Laws. Alliton, Inc., and Donovan, Ltd., are interstate competitors selling similar appliances, principally in the state of Illinois, Indiana, Kentucky, and Ohio. Allitron and Donovan agree that Allitron will no longer sell in Indiana and Ohio and that Donovan will no longer sell in Illinois and Kentucky. Have Allitron and Donovan violated any intritust laws? If so, which law? Explain. (see Section 1 of the Sherman Act.)


Price Fixing. Together, EMI, Sony BMG Music Entertainment, Universal group Recordings, Inc. and Warner Music Group Corp. produced, licensed, and distributed 80 percent of the digital music sold in the United States. The companies formed musicNet to sell music to online services that sold the song to consumers. MusicNet required all of the services to sell the song at the same price and subject to the same restrictions. Digitization of music became cheaper, but MusicNet did not change in prices. Did MusicNet violate the antitrust laws? Explain. (see Section 1 of the Sherman Act.)


Dayton Superior Corp. Sells its panies, including Spa Steel Products, Inc. the purchasers often complete directly with each other for customers purchased Dayton Superior’s products from two Spa Steel’s competitors. According to the customer, Spa Steel’s prices were always 10 to 15 percent higher for the same products. As a result, Spa Steel Lost sales to at least that customer and perhaps others. Spa Steel wants to sue Dayton Supirior for price discrimination. Which requirements for such a claim under Section 2 of the Clayton Act does Spa Steel satisfy? What additional facts will it need to prove?


Section 1 of the Sherman Act. The National Collegiate Athletic Association (NCAA) and the National Federation of State High School Association (NFHS) set a new standard for non-wood baseball bats. Their goal was to ensure that aluminum and composite bats performed like wood bats in order to enhance player safety and reduce technology-driven home runs and other big hits. Marucci Sports LLC, makes non-wood bats. Under the new standard, four of Marucci’s eleven products were decertified for use in high school and collegiate games. Marucci filed a suit against the NCAA and the NFHS under Section 1 of the Sherman Act. At trial, Marucci’s evidence focused on the injury to its own business. Did the NCAA and NFHS’s standard restrain trade in violation of the Sherman Act? Explain.

Chapter 28


Registration Requirements. Estrrada Hermanos, Inc., a corporation incorporated and doing business in Florida, decides to sell $1 million worth of its common stock to the public. The stock will be sold only within the state of Florida. Jose Estrada, the chair of board, says the offering need not be registered with the Securities and Exchange Commission. His brother, Gustavo, disagrees. Who is right? Explain.


Insider Trading. David Gain was the chief executive officer (CEO) of  Forest Media Corp., which became interested in acquiring RS Communications, Inc. To initiate negotiations, Gain met with RS’s CEO, Gill Raz, on Friday, July 12. Two days later, Gain phoned his brother Mark, who bought 3,800 shares of RS stock on the following Monday. Mark discussed the deal with their father, Jordan, who bought 20,000 RS shares on Thursday. On July 25 the day before the RS bid was due, Gain phoned his parents home, and Mark bought another 3,200 RS shares. The same routine was followed over the next few days, with gain periodically phoning Mark or Jordan, both who continued to buy RS shares. Forest’s bid was refused, but on August 5, RS announced its merger with another company. The price of RS stocks rose 30 percent, increasing the value of Marks and Jordans shares by $664,024 and $412,875, respectively. Did Gain engage in insider trading? What is required to impose sanctions for this offense? Could a court hold Gain Liable? Why or Why not? (see the securities Exchange act of 1934).

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