Business Law - Final Exam

• Ethical Dilemma


  a problem about what a firm should do which no clear, right decision is available
• Most professionals are governed by __________________ that help with monitoring certain professions

  codes of conduct
• "The one and only social responsibility of business is to increase its profits."

  Milton Friedman

  Shareholder Model
• "The business of business is serving society, not making money."

  Dayton Hudson

  Stakeholder Model
• Ethics


  the study of how people ought to act
• Utilitarian Ethics


  A correct decision was one that tended to maximize overall happiness and minimize overall pain

  "mathematical approach"
• Utilitarianism focuses on ...


  the result and the most good for everyone
• Deontological Ethics


  The results are not as important as the reason for which the decision is made; the ends do not justify the means
• What are the responsibilities of a business?

  To employees, to customers, to shareholders/investors, to and in foreign countries, employees' responsibility to company
• Shareholder Model

  1. company must comply with the law

  2. they must make as much money as possible for shareholders
• Stakeholder Model


  Businesses should take care of more than shareholders alone. A company must look to its employees, its customers, and the communities in which it operates.
• Without a contract, a worker was an

  employee at will
• An employee at will can be fired for ...

  a good reason, a bad reason, or no reason at all
• National Labor Relations Act (NLRA) was created to _____ and it prohibits employers from ______________. It also requires employers to ____________________ with unions.

  enforce labor laws, penalizing workers who engage in union activity, "bargain in good faith"
• Virginia is a ______________________state


  Right - to - work
• right-to-work laws


  are a government regulation of the contractual agreements between employers and labor unions that prevents them from excluding non-union workers or requiring employees to pay a fee to unions that have negotiated the labor contract all the employees work under
• Family and Medical Leave Act guarantees


  both men and women up to 12 weeks of UNPAID leave each year for childbirth, adoption, or medical emergences for themselves or a family member
• COBRA stands for


  Consolidated Omnibus Budget Reconciliation Act
• COBRA provides


  that former employees of companies with 20 or more employees must be allowed to continue their health insurance for 18 months after leaving their job
• What is the catch with COBRA?


  employees must pay for it themselves, up to 102% of the cost (extra 2% covers administrative expenses
• Wrongful Discharge prohibits


  an employer from firing a worker for a bad reason
• The public policy rule prohibits an employer from firing a worker for a reason that violates basic social rights, duties or responsibilities, such as:


  Refusing to violate the law

  exercising a legal right

  performing a legal duty
• Contract Law


  an employee handbook creates a contract; oral promises made during the hiring process can be enforceable
• intentional Infliction of Emotional Distress


  employers who condone cruel treatment of their workers face liability under tort of intentional infliction of emotional distress
• Defamation is what type of tort

  intentional
• When can employers be liable for defamation?


  when they give false and unfavorable references about a former employee
• Employers are generally not required to give ________________, but may sometimes be held liable if _________________.


  any information about former employees, if potentially dangerous information is withheld.
• False Claims Act


  protects those who refuse to sign inaccurate reports
• Civil Service Reform Act and the Whistleblower Protection Act


  protect federal employees who report wrongdoings
• Sarbanes - Oxley Act of 2002


  protects employees of publicly traded companies who provide evidence of fraud to investigators
• State statutes protect whistleblowers from


  retaliation from employers in all 50 states, but the degree of protection varies
• Common law typically prohibits the discharge of employees who report _____


  illegal activity that relates to their own jobs
• Sarbanes - Oxley raised financial standards in what three main area?


  corporate governance, securities analysis, and the performance of audit work
• What is the most important goal of the Sarbanes - Oxley act?


  to ensure that company directors and officers are aware of and accountable for the financial condition of the companies they manage
• OSHA (Occupational Safety and Health Administration)


  passed in 1970 to ensure safe working conditions; sets specific health and safety standards
• OSHA obliges employers to keep workplace


  free from recognized hazards
• OSHA requires


  records of all injuries and accidents and allows inspection of workplaces and fines for unsafe conditions
• Workers' compensation was set up to


  insure payment for employees who are injured on the job
• Employers may not require or even suggest the use of lie detector tests except in

  investigations of crimes
• Alcohol and drug testing is allowed by ________________ and government employers may test if


  private businesses, signs of use are seen or if job safety is an issue