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BBA 3210, Business Law 1 Cou rse Learning Outcomes for Unit II Upon completion of this unit, students should be able to: 4. Demonstrate research skills using all modalit ies available for legal issues. 4.1 Describe what administrative law is and where it is derived. 4.2 Differentiate between the two principal varieties of agency rule making. 4.3 Classify the limitations placed on agency p owers. 4.4 Describe law and its sources. 4.5 Identify the key elements of the judicial process, including the parties involved and the places where disputes are heard. 4.6 Differentiate the various forms of jurisdiction. 8. Analyze bu siness ethics in legal matters. 8.1 Recognize the importance of ethics to business management. 8.2 Discuss ethical scenarios using the WH framework. 9. Explain the need for promoting business social responsibility. Course/Unit Learning Outcomes Learning Activity 4.1 , 4.2, 4.3, 4.4, 4.5, 4.6 Unit Lesson Chapter 4, pp. 59 –75 Unit I and II Assessment 8.1 , 8.2 Unit Lesson Chapter 2 , pp. 13 –24 Article: “Ford Pinto: A Pre Law Case -Study in Product L iability ” Unit II Assignment Unit I and II Assessment 9 Unit Lesson Chapter 2 , pp. 13 –24 Unit II Assignment Unit I and II Assessment Required Unit Resources Chapter 2: Business Ethics and Social Responsibility, pp. 13 –24 Chapter 4: Administrative Law, pp. 59 –75 In order to access the following resource, click the link below. The reading below is helpful in expanding your knowledge when completing the Unit II Assignment. This article briefly goes over the Ford Pinto case and the impact it had on Ford and the automobile manufacturing industry. Ford Pinto: A pre law case -study in product liability [Blog post]. (2013, January 11). Retrieved from http://www.regisuniversity.org/ford -pinto -a-pre -law -case -study -in-product -liability/ UNIT II STUDY GUIDE Administrative Law, Business Ethics, and Social Responsibility BBA 3210, Business Law 2 UNIT x STUDY GUIDE Title Unit Lesson Administrative Law Introduction: This unit goes beyond the various sources of law covered in Unit I, including constitutions, laws passed by legislatures, and laws that administrative agencies pass. Understanding administrative law requires knowledge of the creation of administrative age ncies, their primary function, and their everyday application. All are very important to a business manager. In brief, administrative law involves the substantive and procedural rules created by administrative agencies — entities created by the legislative branch —to carry out specific duties. These agencies have hearings (agency “trials”) in which an administrative law judge (ALJ) presides over the hearing. An example of the importance of administrative law is the case mentioned in Chapter 4 which starts on page 59. A group of private organizations petitioned the Environmental Protection Agency (EPA) to require that it regulate carbon dioxide from automobile emissions. After hearings and comments from the public, the EPA refused to regulate, saying they di d not have the legal authority to do so. The matter was appealed and eventually went to the U.S. Supreme Court. The Bush White House filed an amicus curie brief, arguing that the EPA was attempting to force the automobile industry to reduce emissions. The Alliance of Automobile Manufacturers came to the EPA’s defense, arguing that the EPA as well as the states had no authority to regulate automobile emissions. In a 5 -4 decision, the U.S. Supreme Court disagreed, holding that the Clean Air Act authorizes th e EPA to regulate greenhouse gas emissions from new motor vehicles in the event that the EPA forms a “judgment” that such admissions contribute to climate change. Moreover, the Court held that the Clean Air Act’s definition of air pollutant includes carbon dioxide. As a result of the Court’s decision, many are now calling for national standards on emissions from automobiles ( Massachusetts v. EPA , 2007). Administrative Agencies : Agencies are created by Congress to do work that is too specific, burdensome, or outside the expertise of legislative bodies. Enabling legislation specifies the name, functions, and specific powers of the administrative agency. Congress approves passing of this legislation, resulting in a statute that specifies the name, functions, and specific powers of the administrative agency, and the agency is empowered to act. Agencies have three processes to carry out their mandates —rule making (procedural, interpretive, and legislative), the executive power to investigate possible violatio ns of rules or statutes, and adjudication. The EPA case above is an example of the EPA’s interpretation of its own administrative responsibility. The Administrative Procedure Act (APA) passed by Congress is a major limitation on how agencies are run.Pri or to this, agencies had the power to decide how they carried out rule making, investigations, and adjudications. Agencies could decide on their own how to make rules, conduct investigations, and hold hearings and trials. The APA established specific guide lines on the formation of rules. Following the formal guidelines of the APA, there are two common types of rules —informal and formal —that agencies can generate. The rules are published in the Federal Register . Agencies primarily use informal rule making. The process of formal rule making is illustrated in Alexis Perez v. John Ashcroft (2002). In this case, the court ruled that all substantive rules (i.e., rules that create law) must be implemented through formal rule - making procedures established by the A PA. Agencies have broad and expansive powers that are kept in check by political, statutory, judicial, and informational limitations. Judicial limitations are arguably the biggest constraint on agency power. An individual or business that believes itself harmed by an administrative rule may challenge that rule in federal court after all administrative procedures are exhausted (Kubasek, Browne, Herron, Dhooge, & Barkacs, 2016). Specifically, the petitioner must do all that is possible within the administra tive agency before taking a matter to federal court. In Massachusetts v. EPA (2007), the EPA had resisted regulating greenhouse gases, arguing that carbon dioxide and similar gases are not pollutants under the Clean Air Act, and, therefore, the agency ha d no BBA 3210, Business Law 3 UNIT x STUDY GUIDE Title regulatory power over them. Ultimately, the Supreme Court decided otherwise and determined the EPA has authority to regulate greenhouse gases as air pollutants under the Clean Air Act. The informational limitations on agencies are defined by the Freedom of Information Act (FOIA), the Government in the Sunshine Act, and the Privacy Act of 1974. These acts serve to provide transparency in government activities, including agencies. Electron ic Privacy Information Center v. National Security Administration (2011) determined limits on FOIA requests. There are over 100 federal agencies and countless state agencies. Each state has its own analog of the EPA.
The federal EPA delegates authority t o each of the state environmental protection agencies for enforcing environmental protection laws. If the state agency fails to enforce these laws using their delegated authority, the federal EPA will enforce them. Business Ethics and Social Responsibili ty Earl Warren (March 19, 1891 –July 9, 1974), American jurist and politician, served as the 30th Governor of California and later served as the 14th Chief Justice of the United States (1953 –1969). The concepts of business law must be illustrated with rea l-life examples in order to be meaningful to citizens and institutions. It is safe to speculate that the leadership from all of those institutions all passed a business law class at some point in their career development. One of the lessons to learn is tha t it is not enough to simply memorize the law or court case decisions. It is most important to understand the reason for the law and the practical application of that reasoning. Ethics addresses the issues of right and wrong and the implications for cond uct, including the actions of individuals and businesses. Chief Justice Warren’s quote implies a strong connection between law and ethics.
The legality of a decision is the minimum standard that must be met. The law both affects and is affected by evolving ethical patterns. Ethics is the study and practice of decisions about what is good or right. Business ethics is the use of ethics and ethical principles to understand and solve potential ethical threats in a business environment. Every community has i ts own values —positive abstractions that capture the sense of what is good or desirable. The community has the right to these expectations in regard to business actions within their community. These underlie social responsibility. Understanding the concept of values is necessary to use the who -how (WH) framework for ethical business decisions. Kubasec et al. (2016) described that the WH framework provides practical steps for responding to an ethical dilemma. The W refers to who (i.e., the stakeholders) wou ld be affected. This can be challenging as the interests of one group of stakeholders (e.g., shareholders) may conflict with the interests of others (e.g., customers or future generations). The H refers to how the ethical decisions are made. Often, traditi onal guidelines, such as the Golden Rule (“Do unto others as you would have done to you"), are used. Guidance is also provided by considering the test of public disclosure —the consequences of the decision becoming public. A third test is the universalizati on test — if action X is taken, would the world be a better place if others did the same? References Alexis Perez v. John Ashcroft, 236 F. Supp. 2d 899 (2002). Electronic Privacy Information Center v. National Security Administration, 795 F. Supp. 2d 85 (2011). Kubasek, N., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. (2016). Dynamic business law: The essentials (4th ed.). New York, NY: McGraw -Hill Education. Massachusetts v. E.P.A., 549 U.S. 497 (2007).
