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Legal and Regulatory Environment of Business - Final Study Guide | LEGL 2700, Study notes of Business and Labour Law

Final Study Guide Material Type: Notes; Professor: Grow; Class: Legal and Regulatory Environment of Business; Subject: Legal Studies; University: University of Georgia; Term: Spring 2011;

Typology: Study notes

2010/2011

Uploaded on 05/11/2011

kroden25
kroden25 🇺🇸

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Download Legal and Regulatory Environment of Business - Final Study Guide | LEGL 2700 and more Study notes Business and Labour Law in PDF only on Docsity! LEGL 2700 FINAL STUDY GUIDE  Sources of Law o Constitutions – limited, not specific, broad  US Constitution  State Constitution = regulate the state governments o Legislation = laws passed by elected representatives  Statute/Act = national/state passes  Ordinance = local, only applies to that town  *congress can pass a single federal law preempting all state regulations of the same subject matter  States can work together to pass uniform laws  Leaves ambiguity, room for manipulation o Administrative Regulations = give clarity and provide enforcement of statutes  Most important for businesses o Judicial Decisions = legal opinions issued by a judge deciding a legal issue which has arisen in a case  Also known as case law  Stare decided = prior precedence for other cases (stability, predictability)  Disadvantages: volume, time, expense, conflicting precedence  Hierarchy of Law o 1. US Constitution o 2. Federal Statutes o 3. Federal Administrative Regulations o 4. State Constitutions o 5. State Statutes o 6. State Administrative Regulations o 7. Local Ordinances o 8. Judicial Decisions/Case Law  Common Law System = England/US, emphasis role of judges in interpreting and applying the law  Question of Law = an issue concerning the application or interpretation of the law (what does loitering mean), determined by judges/justices  Question of Fact = a factual issue disputed by the parties (who is telling the truth), determined by juries  State Court =hear cases arising under state law or state constitutions  Federal Court Cases o Federal question cases (federal taxes, patents, copyrights, constitutional violations, stocks, bonds, immigration) o Cases involving the US as a party o Cases between two or more states o Diversity of citizenship cases(2 parties are from different states, has to be over $75,000)  Trial Court = site of initial trial, witness testimony is heard, jury determines a verdict  Appellate Court = review legal decisions made by trial courts, usually 3 judges  Supreme court = highest court, hears appeals from the appellate court, must grant writ of certiorari, make final decision  Litigation = bringing and/or defending an action in court to enforce a particular right  Requirements for Bringing Suit o Standing to sue = plaintiff must show that it has a legally protectable stake or interest in the dispute entitling it to bring the controversy before the court in order to obtain judicial relief, legal right was violated  Actual case = legal, real dispute  Personal stake in the resolution of the case o Personal jurisdiction = power of a court to hear and determine a lawsuit involving the parties before it  courts automatically obtain over a plaintiff when suit is file  courts obtain over a defendant when the defendant o voluntarily appears 1 o is served with process in the state (summoned) o committed tort in state o own property in the state that is the subject of suit o entered a contract or transaction in the state that is the subject of suit o Subject matter jurisdiction = power of a court to hear and determine lawsuits involving the issues of the type before it (does this court have power to hear this case)  Trial Process o Pre Trial  1. Pleadings = formal presentation of claims and defenses by parties to a lawsuit o Complaint – filed by plaintiff initiating the law suit, sends out summons o Answer – filed by the defendant, admitting or denying each allegation, may include counterclaims o Reply – plaintiffs response to defendants counterclaims, if any  2. Discovery = each party obtains the information needed to prepare its case, scope of discovery must be likely to lead to admissible evidence o Interrogatories = written questions which must be answered by the other party, open ended o Requests for Production of Documents = relevant to case o Depositions = oral questioning by an attorney of a witness, 1 day and 7 hours o Requests for Admissions = written yes/no questions , most expensive o **scope of discovery = requested discovery must be likely to lead to admissible evidence o 3. Trial  1. Jury selection = Voir dire = preliminary examination of prospective juries, attorneys choose  Kick people off for cause or peremptory (just doesn’t like)  2. Opening Statement  4. Presentation of Evidence  3. Closing Statements  5. Jury instructions  6. Verdict  Burden of Proof = level of proof needed to o Criminal = beyond a reasonable doubt o Civil = preponderance of the evidence or clear and convincing proof o Easiest to hardest = preponderance (51% sure), clear & convincing proof, beyond a reasonable doubt  7. Appeal  Alternative Dispute Resolution = settling disputes other than litigation o Settlement – resolution reached through direct negotiations between the parties, preserves relationship o Arbitration = submitting a dispute to a neutral third party who issues a binding decision  Voluntary = disputing parties agree to arbitrate, can only be overruled if arbitrator had no good reason, fraud, contradicts public policy  Mandatory = a court or statue requires the parties to arbitrate, can be overruled if one party is dissatisfied  Process: Hearing, Award/Decision o Mediation = neutral third party helps reach an agreement, not binding  Supremacy Claus = constitution, federal statues, US treaties are the supreme law of the land, state laws cant conflict with federal but they can go above and beyond  Preemption = federal government has claimed the exclusive right to regulate a particular area, state regulation is invalid  Commerce clause = Article I Section 8, Congress has the power to regulate commerce with foreign nations and among several states o Interstate commerce = most everything today is interstate o Foreign nations = tariffs, embargoes, free trade agreements  First Amendment – not absolute o Speech = only in government regulated public places, can prohibit if there is compelling reason  limited protection on commercial speech (informing public on business, false advertisements) o Press = TV, newspaper, magazines, only specific industries are protected 2  Judicial admission – admits in court they entered agreement o Performance  Complete (executed, done)  Substantial (must be compensated for the work you did, did a lot)  Material breach (don’t have to be paid anything, because didn’t do much) o Nonperformance  Impossibility (death of essential party, destruction of property, illegal)  Waiver = released from duty BEFORE due date  Release – released from duty AFTER due date  Criminal Intent = government punishment of wrongs committed against society o Defendant willfully and knowingly committed crime (intentional) o Actual criminal act occurred o Types of Intent  Felonies = punishment by fines/imprisonment >1, issued by grand jury indictment  Misdemeanors = punishment by fines/imprisonment <1, issued by the government filing a charge (called information) o Fourth Amendment = illegal search and seizure  Police usually must have a search warrant (require probable cause)  Exceptions to search warrant: consent, placed under arrest (can search immediate person and area for safety reasons), evidence would likely be destroyed  Police don’t need warrant if they are searching a public area of a public place (no reasonable expectation of privacy)  Can only use evidence in court if police obeyed rules o Fifth Amendment  Self incrimination = right to not testify against yourself (only for an individual’s testimony, not for corporation, only for testimony NOT for material evidence)  Double jeopardy = can’t be tried twice for the exact same thing, based on same facts, and by same level of government o Fraud = “reckless indifference to truth”  Requires intentional false statement to material fact (fact that would make/break decision)  Associated crimes: helping someone in a crime  Conspiracy: plan, willfully a member in plan from the start, one member commits an overt act to help conspiracy  Aiding & Abiding: accessory to a crime but not a member from the start, help crime being committed  Tort = non criminal, wrongful action other than breach of contract o Intentional tort: desire to bring about certain/likely results  Once you intentionally do one thing, you are responsible for everything that happens afterwards  IIED = intentional infliction of emotional distress, outrageous conduct that causes mental distress, first amendment rights are greater than IIEDs  Invasion of privacy = misappropriate of a person’s name/likeness, intrusion on person’s physical solitude, public disclosure of highly private information  False imprisonment – unjustified confinement of a nonconsenting person  Trespass = entering someone else’s land without consent or remaining after being asked to leave  Conversion = wrongful exercise of power or control over someone else’s personal property (not real property) had permission to use at first but then kept it beyond that  Defamation = publication of untrue statement about another’s leading to damage to the persons reputation or character (slander is verbal, libel is written) o Defenses: truth, privileged communication (untruths in court), public figure  Fraud = intentional misrepresentation of material fact leading to an injury o Injurious falsehood= untrue statements about another’s business product/quality o Intentional interference with contractual relations = get a person to break a contract with someone else, know about their other contract o Unintentional tort: failed to do something and it caused damage to someone else  Negligence: unintentional injury resulting from the defendants failure to use reasonable care  Elements o Duty of care: requires watchfulness, attention, and caution that a reasonable person would under the circumstance, most people do not owe this, do owe:  Business to customers 5  Service agency to clients  Land owners to those on the land o Breach of duty  Causation in fact: did breach cause injury?  Proximate causation: was the injury anticipated?  Injury: was there an actual injury?  Strict Liability Torts = no negligence, you did nothing wrong but are still responsible for damages o Product defect (few bad apples), design defect (entire line are bad apples)  Defenses: assumption of risk, misuse o Abnormally dangerous activities: high risk of serious harm, risk can’t be completely prevented by reasonable care, not commonly performed in area  Factors in selection a business organization o Creation o Continuity o Managerial control o Liability o Taxation  Corporations: artificial person o Creation: articles of incorporation, lots of paperwork, annual renewal o Continuity: continues after owners change o Managerial control: lots of owners that don’t have much say, shareholders, board of directors, officers o Liability: limited, shareholders liability is limited to their share of stock o Taxation : double taxed, corporation is taxed for income and shareholders are taxed for dividends o Fiduciary duty = duty of care (reasonable care, good decisions), duty of loyalty (corporations interest > personal interest) o Piercing corporate veil: exception to limited liability, become personally liable for debt when used corporate money for personal gain, fraud, injustice for personal benefit)  Sole Proprietorships: one owner o Creation: no formal documentation o Continuity: ends when owner leaves, none o Managerial control: owner in total control o Liability: owner is personally liable o Taxation: all income subject to personal taxes  Partnerships: 2 + owners o Creation: partners share common interest and profits/losses o Continuity: dissolves with any change of ownership o Managerial control: partners have complete control o Liability: all personally liable for entire debt o Taxation: each partner pays personal income tax for his share  S Corporation o similar to corporation o Taxed like partnership (single taxed) o can’t be traded on stock exchange o only have 75 or less members  LLC o Managed equally by members by majority vote o Members not personally liable o Taxed like partnership (single taxed) o No limitations on number of owners o Can’t be traded on stock exchange  Enron o Mark to market accounting on future profits o Manipulating/controlling electricity and prices o Fraud/Conflict of interest of Fastow’s “companies” that would buy Enron assets to make it look like Enron was making a profit o Bad investments o Drive price up and then buy stock 6 o Lawsuits o Investigation by Congress o *response was the Sarbanes Oxley Act  Securities Act of 1934 = forbids the reselling of a security on a national exchange without an effective registration with the SEC o Forbids fraud in connection with the resale of a security o Insider = owner of 10%+ of a security, director/officer of company issuing security  Must file an initial report with SEC about how much they own  Must file report with SEC when they sell share within TWO days  Short swing profits are illegal, sell stock within 6 months of buying it o Nonpublic information = employee (or anyone else who was intentional told insider information) cannot use inside, non public information for profits in stocks  Sarbanes Oxley Act of 2002 o Revitalization of SEC (increased money and power) o Accounting Reforms (PCAOB regulated big accounting companies) o Corporate Governance (every stock exchange company must have an outside auditor working for them that report directly to SEC not to the CEO) o Financial Statements and Controls (CEOs have to sign under oath that every financial statement is all correct) o Securities and Fraud (increased penalties)  Antitrust = series of laws intended to promote abundant, fair competition in marketplace o Per se illegality: certain activities are always ILLEGAL o Rule of reason: only illegal if they cause restraint of trade o Sherman Act of 1890  Section 1: 2+ competing companies o Price fixing: charging same price, agree not to compete o Geographic territory allocation: dividing up regions among competitors and agree not to sell to others regions o Horizontal agreements: between competitors, usually per se illegality because courts are more worried about this o Vertical agreements: between manufacturer and supplier/distributers, usually rule of reason because court is less worried  Section 2: 1 company o Relevant market? Number of competitors? Barriers to entry? o exclusionary conduct: does something unfair/anti-competitive o Clayton Act of 1914 = fill loopholes of Sherman Act  Price discrimination – charge different prices to different people  Tying contracts – to buy one product, you must buy another also  Reciprocal dealings – I’ll do business with you if you do business with me  Exclusive dealing – if you do business with me, you can’t do it with any of my competitors  Mergers and acquisitions – must get government approval beforehand, government has ability to stop any companies from merging or buying another company if they feel it would harm competition, must have a value of $65,000000+ Chapter 19: Agency & Employment Law  Types of Employment Relationships o Employer/employee o Employer/independent contractor  Independent contractor = hired to perform a specific task o Employee or Independent Contractor?  How much control does the employer have over details of work? o More control (employer/employee) o Less control (employer/independent contractor)  Is the worker engaged in an occupation distinct from that of the employer? (does the worker do something related to the business) 7  Unequal Compensation  Unequal terms, conditions, or privileges of employment, promotion o Not included: socioeconomic status, age, sexual orientation o Only applies to businesses that have 15+ employees o Enforcement = Equal Employment Opportunity Commission’s (EEOC) responsibility  Power given by congress, can file suit or represent individuals who have been discriminated against, must first file suit with EEOC before filing suit, must first try to solve it out of court o Types of cases: o Disparate treatment = employer intentionally discriminated against the plaintiff, hard to prove because people typically won’t admit to intentionally discriminating  Defense: Bona Fide Occupational Qualification = can discriminate for fundamental aspects of the type of work, those discriminated against could not possibly do work, CAN NEVER USE AGAINST RACE/COLOR, customer preference is not a legitimate reason to discriminate  Disparate Impact = employers practices or policies had a discriminatory effect on a protected group o The way it is implemented results in discrimination, at face it looks neutral but it really isn’t, example: to work at a job you must be at least 6 foot tall, this discriminates against women because women typically aren’t that tall  Defenses: business necessity defense – maybe he policy results in discrimination but there’s a legitimate reason this requirement is there, must be tall to stock high shelves  Retaliation- discrimination occurs by employer against something an employee does, anything that would have affected them negativity, employee may have testified against company o Types of discrimination  Race/Color – cant hire people related to current employees because eventually only one race would be hired, cant segregate workforce  National Origin – only hire people who speak a certain language, but sometimes it’s necessary for worker to speak English, currently 25% of discrimination is against Middle Easters/Muslims  Religion – doesn’t apply to religious positions like a priest or preacher, employers must make reasonable accommodations to workers’ religions, court will look at balance between interfering religious activities and how much it costs the company  Sex o Sexual harassment –  Quid pro quo: direct, you give me this, I’ll give you that -- you’ll get hired if you have sex with me  Hostile work environment – not hospitable environment to both sexes, inappropriate touching or comments, has to be severe and regular occurrence, company’s only responsible if they know this is going on and don’t do anything about it o Pregnancy discrimination – health insurance plans have to cover child birth, mothers who are married or single, can’t force women to take time off, can’t not hire a woman for being pregnant o Equal Pay Act – illegal to discriminate women by paying them different than men, lots of ways around it, different levels of training, education, exact job o Can’t say only men can be salesperson even if it’s an international job in a country where women are below men  Age- Age Discrimination in Employment Act (ADEA) o Must be 20+ employees, only protects older employees 40+ years o So if they don’t hire you because of your age and you are under forty, then it is LEGAL o Can’t: not fire/promote someone over 40 or have a mandatory retirement age  Exception: if you’re a high level executive and have retirement benefits of $44,000/year o Disparate Impact – indirect discrimination, more lenient to employees and age-- Discrimination Technology requirement, physical skill o Direct treatment – not acceptable, easier to get in trouble for  Disabilities = Americans with Disabilities Act of 1990 (ADA) 10 o Disability = a physical or mental impairment substantially limiting one or more major life activities for a long amount of time o 15+ employees o Can’t be a temporary disability of 6 months or less o Businesses can’t ask you about specific disabilities during the job interview but they can on application – supposed to decide whether to hire or not based on qualifications, then they can talk about disability and make reasonable accommodations for it o Workplace is supposed to be handicapped accessibility o Challengeable Employment Practices  Testing and education requirements – make sure test is necessary and questions are relevant to business, results may yield better results based on gender, race, origin  Height and weight requirements  Appearance requirements – dress codes, hair lengths, religious clothing  Affirmative action – law sometimes allows companies to favor one group over another to diversify, want to correct lack of representation in the past, NEVER ALLOWED TO USE A QUOTA 11
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