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Tri-star is one of the world's leading cellphone manufacturers. It manufactures all of its cellphone parts (such as screens and batteries) in Canada...
Tri-star is one of the world's leading cellphone manufacturers. It manufactures all of its cellphone parts (such as screens and batteries) in Canada and sells its cellphones around the world. The cellphone business is fiercely competitive, with major competitors in Japan, Germany, Korea, USA and China. Everyone is furiously fighting to retain and expand their market share. Tri-star is currently a world leader. The president of Tri-star is under extreme pressure to maintain the market lead for Tri-star. Failure to keep the market lead would mean that not only would her personal executive position be at risk, but also that she will have to order lay-offs. The president knows many of the workers on the factory floor personally. They are highly skilled professionals with families to support and with children in post-secondary institutions, and she cares about them deeply. The president has fostered a corporate climate at Tri-Star that values achievement and initiative at any cost. The corporate climate is captured in the saying "seek forgiveness not permission" and permeates the company. The president is not interested in excuses or explanations or details, but only in the bottom line and in ensuring that TriStar continues to make money. Market research has shown Tri-Star that there is great demand for better, faster charging batteries. The president knows that if she markets a truly better battery, Tri-star will have plenty of world-wide customers and therefore not only keep but increase its market share. Consequently, the president orders the vice president of engineering, Mr. Cutthroat, to build a new battery that will operate the phone for 25% time longer, and charge 50% faster than TriStar's existing batteries. The harsh reality is that this objective cannot be met without investing millions of dollars and at least two years of testing to ensure the safety of the batteries. Tri-star however, does not have the luxury of time. The president wants the new battery in place for the launch of Tri-Star's flagship cellphone next year. Mr. Cutthroat has fully absorbed the culture of Tri-star. The VP knows he has to come up with a new battery in time for next year. Therefore, he decides to simply skip the safety testing of the developed batteries. The long safety testing process at Tri-Star is a voluntary process that Tri-Star developed to ensure quality control. It is not legally required by Canadian law. Skipping the safety testing will allow Mr. Cutthroat to develop the battery in time for the new product launch. Mr. Cutthroat excitedly presents this solution to the president. To protect herself and the engineering staff, the president seeks a legal opinion from the Tri-Star law department that it is legal to skip the safety testing. Moreover, the president makes it clear that if the law department will not approve skipping the testing she will find new lawyers that will, and fire the current lawyers. The legal department writes a memo saying that according to Canadian law it is not necessary to test the batteries for safety. Unfortunately for all involved, a few days after the launch of the new flagship cellphone, numerous reports appear in the media that the batteries overheat and explode. Airlines ban all Tri-Star phones from their flights, and angry consumers demand a full refund. While the president appears in the media defending her company and stating that it complied in its battery testing with all applicable Canadian law, Mr. Cutthroat leaks to the media that the president forced him to eliminate the safety testing against his wishes. The president promptly fires him for breach of his duty of loyalty to the company.
I wanted to ask is this considered a tort of negligence and what other legal obligations did the president of the company commit?
