Aroka Legal Paper
COLORADO STATE UNIVERSITY
COLLEGE OF BUSINESS
GRADUATE DIVISION
BUS660 – Term Paper – Due March 8, 2017 by 11:59pm Mountain Standard Time
Overall Instructions: There are three distinct parts to your paper. These three parts should all be in one file when you submit them and you should start each part on a new page. In Part 1 you must read the fact situation below and identify and clearly state the issues presented. Part 2 provides two legal issues and you must write a one page “legal memo” on each of them. For Part 3, you will write about your own personal approach to leading an ethical organization.
Points will be allocated as follows:
Part 1 (11 total points)
Identification of Issues (8 points)
Clarity of Issue Statement (3 points)
Part 2 (10 total points)
Statement of Conclusion/Recommendation (3 points)
Analysis/Reasoning (7 points)
Part 3 (6 total points)
Overall Grammar/Style (3 points)
Part 1 – Fact Situation: Identification of Issues
Part 1 Detailed Instructions: You need to first read the Term Paper Assignment Background found in Canvas. The Term Paper Assignment Background provides the base information for this Term Paper assignment, but you are not asked to identify the issues in that background material. The fact situation below (starting with the numbered paragraphs) presents multiple legal and ethical issues. Your task for this part of the Term Paper is to identify the issues and provide a clear one or two sentence statement of the issue presented. An example from the Term Paper Assignment Background material would be “Did Sam Sneekin discriminate against Emily Ethical due to her female gender when he requested that she be removed from the distribution team? If so, was this discrimination a violation of ethical principles and U.S. employment law?” Notice that you don’t have to know all the facts, or the answer to the question, to state the issue. Also, you should list the issue even if you don’t believe there has been an actual violation of an ethical or legal principle. Each situation may raise multiple potential issues so give each issue separately. You should demonstrate that you can identify issues based on the ethical and legal materials we covered in class and the class readings.
For this section of the Term Paper, you will be graded on your ability to identify relevant issues and on how clearly you draft the issue in one or two sentences. Please draft your issues as “bullet points” and organize them using the outline given in the fact situation below. As with the Ethical and Legal Case papers, the best issue statements will be in the form of a question. Please focus on the key issues so that this part of your Term Paper is no more than three pages, single spaced.
Now, we pick up where the Term Paper Assignment Background left off…
Identify the three most critical issues that QP Legal is likely to raise regarding the below memo that was in the envelope that Sam gave to Bill. The memo looks like it is from a QP field representative in the country where the company is expanding.
“CONFIDENTIAL – DON’T PASS THIS ON TO ANYONE
February 1, 2017
Sam and Steve,
Wow, these people do business differently than we do! I have been able to talk with managers at a few potential customers already and every one of them is interested in what “incentives” we are going to offer to get their business. By this they mean what we are going to do for them personally, not what price discounts or delivery concessions we are going to offer their organizations. One guy even made it clear that he would buy our products with the right “incentives” even if we weren’t the best on price, quality and delivery times.
I think our strategy has to be to find the key guys and get them the incentives they want. This is usually just a weekend a month at a resort somewhere, a little bit of cash, or the like, something we can easily cover with the higher prices we can then charge. I’m told that these “incentives” are perfectly legal here, so we should be in the clear to move on this ASAP. I tried this out with one guy already and we have our first order for 2017! This international business stuff is really fun and we are going to make a killing here!
Rick”
Bill left the meeting with Nouv very excited about his new role. He was working on an important special project for the new company owner and would really have a chance to show his leadership potential. This was a time for him to shine and he immediately started thinking about how he would shape the project and boldly lead the team to a whole new set of compliance requirements in the revised Code of Conduct. The next day he was already meeting with the head of Human Resources and Strategic Planning. “I need people on this team that can bring some fresh ideas.” Bill said. “I can’t have anyone that wants the same old approach.” Bill didn’t even notice when the HR and Strategic Planning managers raised their eyebrows and glanced at each other; he was too focused on how to drive this “Code project” forward. Bill continued,
“OK, I’ll need a team of four for this project and you have proposed 12 total candidates. Four of your suggestions have been around way too long to have the fresh ideas I’ll be looking for so that leaves eight candidates. Of those eight, one is African American and one is Asian and that’s not the “image” I want for this project. Another one is a woman who just got married so she probably won’t stay with the company long enough to see the project to completion. One of the remaining five is someone who I know won’t go along with anything I… I mean the team… decides, so she’s out. The remaining four are my kind of guys, so we’re ready to go.”
The HR and Strategic Planning directors couldn’t even get a word in while Bill was talking and they were surprised when Bill wasn’t receptive to their input on how the project should proceed. “Nouv trusts me to lead this and with your four guys I’m sure I can get this one done quickly.” Bill insisted.
Sam Sneekin heard about his impending “release” from the company the day before his scheduled meeting with Nouv. He didn’t take the news well. He decided that he would leave a “legacy” at the company. In the course of 24 hours, he took the following actions:
QP had been involved in a patent infringement dispute with one of its competitors, Best Optics, Inc., for over a year. The case had already been through “document discovery” and a few depositions had been taken. Sam knew one of the senior managers at Best Optics and called him to discuss the case. Sam told him, “QP knows we infringed your patent and we are probably going to have to pay a large settlement. So far, we have been able to hide the evidence, but I can get it for you if you can get me a job at Best Optics if I ever need one.” Sam’s friend at Best Optics was excited about this news, especially since, as he said, Best Optics’ stock price on the New York Stock Exchange would go up significantly if Best Optics got a big settlement from QP. Sam’s friend accepted Sam’s offer and Sam sent the evidence to him by e-mail. Sam then picked up the phone, called his stock broker and placed an order for 5,000 shares of Best Optics stock.
Sam has been working directly with the new customer mentioned by Rick in the memo quoted above in QP’s new overseas market. The customer placed a large order for lenses that are normally used in larger rifle sights, but the customer didn’t say what they were going to use them for. Sam called the customer and verbally agreed to sell the lenses. The customer agreed and sent a fax confirming the terms of the sale based on the customer’s standard terms and conditions. Sam signed the customer’s documentation and ordered the lenses shipped before the end of the day.
Sam went to lunch with his secretary at about 1:00pm the day before his meeting with Nouv. He ordered a bottle of wine and, after a few glasses, told his secretary how much he admired her and that he could get her promoted if she would have dinner with him (she wasn’t aware that Sam would be leaving the company the next day). His secretary was not impressed by this offer and left immediately. Sam then took a seat at the bar and began to talk with the other patrons, while he drank several more drinks. As it turns out, one of the people eating lunch at the bar was a regular customer of QP. Sam loudly boasted that he could get anyone in the bar special pricing on QP products “for this afternoon only”. Although the customer could see that Sam was intoxicated, Sam insisted on selling a shipment of lenses to the customer at a discount. The customer finished lunch, went back to his office and confirmed the sale by fax, giving the quantity, delivery, price and other relevant details. Sam continued drinking in the bar telling the bartender that he needed to stay to make additional sales for QP. The bartender was only too happy to continue to give Sam drinks (some of them free) since Sam was being so entertaining. Sam’s “sales activity” ended when the bartender had to break up a physical fight between Sam and another patron. Sam came to his senses, apologized, and gave the other patron his QP business card saying “My company will take care of any damage I’ve done.” The other patron (who had a bloody nose and torn clothes as a result of the fight) took Sam’s card, left the bar and called his lawyer. Sam was almost home when he “blacked out” and ran his car into a school bus full of elementary school children seriously injuring several of them.
The next day, just before going into the meeting with Nouv, Sam sent an e-mail to all of his key industry contacts. The e-mail had jokes about racial and ethnic minorities, and women in the workplace and Sam closed the e-mail by saying “I read this and it reminded me of Beatty Brilliant! I hope you never have to deal with her. She’s the least truthful person I know.” Sam signed the e-mail “Sam Sneekin, VP Marketing, Quality Products, LLC”
After the meeting with Nouv, Sam was escorted to the door (without having any chance to collect his personal items) by the security guards that QP had hired as independent contractors as well as QP’s HR manager. The security guards (who had never liked Sam because of the way he had treated them) grabbed Sam by the arms and took him “the long way” so that most of QP’s employees could see what was happening. This was over Sam’s objections and took a fairly long time, much to the satisfaction of the guards and many of QP’s employees.
As you will recall, Sam Sneekin said that Emily Ethical was “dead weight”, but Nouv had her reinstated to the distribution team after she had raised ethical concerns about QP’s distribution strategy overseas. As it turns out, Emily had not been a very productive member of QP since she had been hired four years earlier. She consistently ranked in the bottom 25% of employees on her performance evaluations. Emily was “let go” about a month later. Nouv had been asked for a recommendation from a company Emily was applying to and Nouv said that “Emily was not our brightest star.” Emily didn’t get the job and she found out that there were two other female employees who had recently been fired from QP. Emily went to a lawyer to request that he file a class action lawsuit directly with the United States Supreme Court requesting compensatory, consequential, incidental, and punitive damages.
Nouv called an “emergency” Board meeting of QP for the week after his meetings with Bill, Betty and Sam. Five of QP’s seven Board members (including Nouv) were able to attend, even given this short notice. At the meeting,
Nouv told the Board that he had developed a personal relationship with a senior manager at Dependable Optics Associates, Inc. (“DOA”, a company traded on the New York Stock Exchange). “We’ve reached an understanding on the types of products we’re going to sell and to what customers, so we should start to see some better pricing for our products. This positions us much better to serve our respective customers going forward.”
Nouv described the bankruptcy of one of QP’s largest customers. The customer had been behind in its payments so QP extended credit to the customer in exchange for a security interest in the customer’s “general inventory”. Although the security agreement was signed, QP had not yet filed a UCC-1 statement. Nouv explained that this filing didn’t matter, since QP had a purchase money security interest in the lenses they sold to the customer as a result of this “general inventory” security agreement. Nouv also told the Board that “QP people are working with the customer every day to make sure we get paid first. I’m confident we’ll get all our money.”
Nouv told the Board about Sam’s departure and proposed hiring an additional person to help Betty with her expanded responsibilities. Nouv proposed two candidates: one had extensive marketing experience outside the U.S. in an unrelated industry while the other had experience with a direct competitor of QP. Nouv suggested to the Board the second candidate since “he can bring some competitive information in addition to his marketing experience.”
Nouv told the Board that he wants to make a deal with Apres Tomber, S.A. (ATSA), a French manufacturing entity, with a factory in Lyon, France, to manufacture QP’s line of fashion eyewear lenses for sale in Europe. Nouv said “I know the CEO of this company personally and we can count on her to produce the highest quality. We can also be assured that she won’t sell any of these lenses outside of Europe to undercut our prices in other parts of the world.” The Board sat quietly as Nouv explained that the relevant QP technology would be licensed to ATSA under the verbal agreement he had already reached with his ATSA contact.
Nouv told the Board that he wanted to make sure that QP controlled the distribution of QP’s products, and the pricing for those products, at least in the U.S. Specifically, Nouv wanted to make sure that QP’s independent distributors didn’t sell QP’s products for less than QP was selling them for so he told the distributors to maintain a certain minimum price. He also told the U.S. distributors that they couldn’t sell outside their own territories.
Finally, Nouv told the Board that QP had developed a new logo for the company to use in its marketing activities and that he had directed the company’s lawyers to file for patent protection to make sure the logo was protected.
When Nouv finished his presentation, the Board members didn’t see the need for any discussion. They had always just agreed with Nouv. The meeting ended with a general discussion on where to go for lunch.
Part 2 – Legal Memos
Part 2 Detailed Instructions: Write a “legal memo” to Nouv on the issues presented below. This memo is “legal” only because it is a summary of the general law that applies to the issue. You do not have to do any research beyond the class books and materials presented in class. Do not restate the facts. Your memo should start with the one sentence Issue identified for each situation. You should then state your Conclusion/Recommendation to the issue in one or two sentences. You should then give your Analysis/Reasoning, relating back to the course materials for support. Each of your two “legal memos” should be no longer than one page, single spaced.
You are QP’s General Counsel. Nouv has asked you to address the following issues so that he can be aware of the legal, and any potential ethical, implications:
a. QP is developing a new website that will include: (1) original art work created by third parties, (2) stories and other written materials contributed by customers and employees, (3) photos of employees working in QP’s facilities, (4) QP’s new “improved” logo, and (5) some innovative “click to learn more” features that no one else has ever thought about. Issue: What are the Intellectual Property implications for each of the website’s features? In particular, can they be protected by IP law, if so under what type of IP law, and who owns the IP in each element?
b. One of the special applications for QP’s products is in high end magnifying glasses. These magnifying glasses are intended for use in office settings where people have to read small text or look at detail in small drawings. Each magnifying glass is sold with a limited warranty (with disclaimers for the warranties of merchantability and fitness for a particular purpose) and a statement that the magnifying glass is “Intended for use indoors only.” As it turns out, the magnifying glasses can also be used to focus sunlight on objects outdoors. Focusing the sunlight like this allows a user to, for example, start a fire by focusing the sunlight on “kindling”. While playing with the magnifying glass in his back yard, Timmy (age 4) caused a severe burn to his eye as he attempted to “make the sun bigger” using QP’s magnifying glass. Timmy’s parents filed suit against QP. Issue: What is QP’s legal exposure under U.S. product liability theories for the damage to Timmy’s eye, and does QP have any legal or ethical duty to future purchasers/users of the QP magnifying glasses?
Part 3 – Ethical Memo
Part 3 Detailed Instructions: Write a short essay on how you define and will lead a positive organizational culture in your workplace. You should incorporate theories and principles you have learned from the Beatty Samuelson 5th edition Legal environment, and Badarracco books in your essay for support, and you can use the characters from Part 1 of this Term Paper assignment as good or bad examples if you find it useful. Your essay should be no more than one page single spaced. Take this as an opportunity to define your “own way” using the learning from the class.
