Employee/Employer Relations and Civil Rights – Business Law Study Guide 2017

Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron.

The plant has been unprofitable for some time now, and there is increasing pressure from shareholders to shut it down so as narrow the loss being incurred by the shareholders. But closing the plant would be a blow to the employees as they will lose their jobs, and the local suppliers will lose a major buyer. There is also fear that the sudden closing of the plant will have an adverse effect on the community of Kantron, as the plant is one of the main sources of employment for the locals. Steve Templeton considered all these factors before making a decision on the fate of the plant. If Steve Templeton, after wagering all the factors, finds that the loss to the employees and the community is far greater than the one incurred by the shareholders, and decides to keep the plant open in Kantron, which of the following moral theory matches Steve Templeton’s approach in keeping the plant open?


Explanation: The principles set forth in utilitarianism are focused on reducing the total amount of suffering in the world. The CEO is making this decision because he believes the suffering will be greater for the community of Kantron than the shareholders. This scenario has many parallels to issues with General Motors over the past 20 years.

Why is proving a bona fide occupational qualification essential?  

 To prove certain type of discrimination is legal

Explanation: Take for example a church that needs to hire a new pastor to run the Sunday congregations. In this rare situation, it is legal to discriminate on the basis of religion because the job cannot be performed without this knowledge.

A(n) is a relationship formed when an employer hires an employee and gives that employee authority to act

 Principal-agent relationship

Explanation: The principal-agent relationship occurs when one party grants another party to act on their behalf and enter legally binding contracts. Normally, employees do not have the authority to enter contracts for the organization by default, so this example goes beyond the normal employee-employer relationship.

Helen works as the vice president of Gotspeed Corporation, a company that develops and sells sports shoes.

Nestor, a home-based shoemaker, meets Helen privately in order to present a model for a more cost-efficient and durable shoe. Instead of taking the idea to Gotspeed’s board of directors, Helen pays Nestor’s asking price and purchases the Anklator model for herself. Helen leaves Gotspeed Corporation and forms her own company that manufactures and markets the Anklator shoe models. What breach of the duty of loyalty has Helen committed here?

 Usurping a corporate opportunity

Explanation: Usurping is just a fancy word for illegally taking somebody else’s place. In this case, Helen is bound to work in the best interest of the company while employed there, but broke loyalty obligations to pursue a competitive startup business.

Hartman, who has worked for Aratize, Inc. for 25 years, is retiring.

Upon hearing the news of his retirement, the president of Aratize announces a bonus of $250,000 to Hartman for his exceptional services toward Aratize thus far. But upon retiring, Hartman isn’t paid the bonus. Hartman decides to sue the president and Aratize to recover the promised bonus. Which of the following is true of this case?

 It will not be enforceable in court because there is no consideration

Explanation: This is what is known as a case of past consideration. Aratize is offering compensation for work that is already completed, which cannot produce a valid contract, therefore, Hartman will not be able to recoup this promised bonus.

Jerry is employed by U.S.-based iconic Systems.

His work hours per week for the month of January were 40 hours the first week, 30 hours the second week, 50 hours the third week, and 45 hours the fourth week. According to the FSLA, how many hours of overtime pay is Jerry entitled to at the end of January?

 15 Hours of Overtime

Explanation: Overtime is required after working 40 hours in a single week. In this case, Jerry exceeded the 40 hour mark by a total of 15 hours.

A member of a minority race applies for a position for which he is well-qualified.

However, the company rejects him and hires a nonminority applicant for the position. The minority applicant can sue under:

 Title VII of the Civil Rights Act

Explanation: One of the most significant aspects of the Civil Rights Act is Title VII, which gives minorities the right to sue employers in cases of discrimination.

  • Student: Forest Bayes
  • Textbook: Various Law Textbooks
  • Course: Business Law 421

Browse More Business Law Resources

Law is one of the most memory-intensive aspects of business school. Learn the most important concepts with our full 2016-17 study guide:

  1. Part 1 - Civil Liability and Contract Law
  2. Part 2 - Employee/Employer Relations and Civil Rights
  3. Part 3 - Federal/State Regulations and Legal Powers
  4. Part 4 - Issues Concerning Liability


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