Interoffice Memorandum Outlining the Law Case Study

Statement of facts

Joe, a salesperson, is involved in a case concerning the intentional sale of the goods at $600 lower than what the company actually authorizes. The customer who bought the products knew the products had been underquoted according to the sales contract but went further to make the purchase. Joe’s decision to sell the products at that price was personal; it was not the plan of the company.

Tina was an employee of Giant Battery performing her daily activities when the accident occurred. Tina experienced much agony after the accident when her hand was injured, forcing her to resort to a series of medical attention such as skin grafting operations. In addition, she had to call off her duty in the Giant Battery Company while waiting for her full recovery.

Thirdly, Tina’s injury was a cause for alarm in regards to drug abuse. Drug screening or testing of an employee is one of the ways to curb future instances of such accidents. As a commission mandated to safeguard consumers’ rights against exploitation and deception, the Federal Trade Commission (FTC) has a call of duty to attend to suspicious practices that occur in companies, and the Giant Battery was not an exception.

In a free market, instances of competition are a common scenario among the companies. The move by Giant Battery Inc. to merge with Bigger Batteries, Inc. cannot be treated as an unfamiliar case. However, due to shareholders’ conflict of interest, many cases of merging are not achieved. The shareholders feel that the new identity may fail to favor their current situation. In addition, competition occurs naturally and the company that wins most of the customers conquers the market.

Lastly, some companies fail to cope with the competition hence plans for a local arrangement with their rival for possibilities of integration are emerging. Such instances arise from the increment of production costs, demand shifts, and liquidation of the company.

Issues presented

1. Is Giant Batteries, Inc. bound by the contact after Joe’s intentional sale at a lower cost?
2. Since Tina’s accident happened in Giant Batteries, Inc., is the company entitled to compensate her under-compensation statutes for employees’ injuries?
3. Is the move by the Giant Batteries to conduct random drug testing on all of its employees legally accepted according to the employees’ privacy rights?
4. What is the role of the FTC in protecting the consumers from malpractices of companies under the FTC’s bureau of consumer protection?
5. Following the alleged merging of the two companies, was there any violation of antitrust law?
6. After Bigger Batterie’s, Inc. decision to let their rivals buy shares, did Mr. Dummie’s wife and share broker violate security laws by buying the shares?

Discussion

In business, issues that are likely to arise, need attention to ensure a good employer-employee relationship after such conflicts. Therefore, the law plays a significant role in providing rights to both employers and employees as well as imposing duties of each party (Twoney, 2008).

Binding by the contract

“Total legal obligation which results from the parties’ agreement is affected by the UCC and any other applicable rules of law (UCC § 1–201(11))” (Twomey & Jennings, 2008, p.34). In some instances, the contracts may be void due to some circumstances under which the contract execution occurs. Joe’s incident falls under this case since he made sales that were lower priced in opposition to the managers’ expectations. The company’s contract termination is justifiable since there was no consultation before sealing the deal.

There should be good communication between the employers and the employee to avoid such instances of occurrence in the future. If Joe had had proper directions, the implementation of the contract would have been smooth to allow the transactions between the parties.

Tina’s compensations for the injuries

There are some provisions that protect employees in the United States such as the Occupational Safety and Health Act of 1970 (OSHA) that ensure es safety and a favorable working environment in an attempt to preserve human recourse according to 29 USC § 651. The secretary of labor has the mandate to promulgate Occupational Safety and Health Standards in OSHA although it does not cover the emergencies and public hearings in the federal register. As an employer, the company should ensure security for its employees any because that may lead to death (Twomey & Jennings, 2008). Records maintenance on such occurrences that go beyond the first aid is important in evaluating the possible source of risks in the company.

OSHA inspectors address issues on violations in workplace and health standards although employers can challenge the findings of the inspectors through Safety and Health Review Commission (OSHRC). For instance, in the case of Staley Manufacturing Company’s Decatur in Illinois where an employee had asphyxiation but there was a challenge in the US court of appeal.

There are statutes the US that govern compensation for injuries during the period of employment. Common law statuses of employer application do not exempt any employer from compensating its employees under the workers’ compensation statutes (Twomey & Jennings, 2008).

However, statutory changes have become rampant with the increment of industrial accidents emanating from powerful machinery use. For example, the Federal Employer’s Liability Act (FELA) advocates for mitigation of damages instead of assuming. Federal Employees’ Compensation Act strengthened the adoption of workers’ compensation that covers all US civilians. The statute clearly requires immediate medical benefits, a periodic wage replacement as a percentage of weekly wages. Whether the injuries occurred due to negligence of the employer or employee, there must be some sort of compensation.

Privacy rights on random drug testing

For one reason or another, the employer may decide to monitor employees mainly for security reasons that may arise later. Tina’s case must have triggered the call for rana doom drug test by the company. However, though the employee may take it as a violation of their rights under the Fourth and Fifth Amendment rights, it is permissible under instances of reasonable suspicion. Initially, this activity was not allowed in the public sector but under the provision of The Federal Omnibus Transportation Employee Testing Act, PL 102-143, 105 Stat 952, 49 USC § 1301 nt., some workers in airlines, railroads, and trucking industries are required to do random drug and alcohol test.

Role of the federal Trade commission in protecting the consumers

As a means of getting more customers, some companies may engage into malpractices such as false advertisement. The FTC has the mandate to protect the consumers from unscrupulous traders. Implementation is through the bureau of consumer protection that ensures protection against unfairness, deception, and frauds by traders.

This bureau carries out investigation and in case of infringement, the company or individuals involved are questionable. In addition, they formulate rules to protect consumers as well as educate them on their rights and responsibilities.

Cases of false advertisement are under the advertising practices division, which is among the seven divisions. This division takes care of consumers through implementing the nation’s truth-in advertising laws (Federal Trade Commission, 2009).

Effects of the alleged merging on antitrust law

The move by the giant batteries Inc. to buy shares from the Bigger Batteries Inc. was deceptive and likely to have an effect on the consumers. When there is a competition between industries, there is an improved antitrust law that favors the consumers through price reduction and quality improvement. The move by the Giant Batteries deviates from the antitrust laws that prevent anticompetitive mergers and business practices (Washington state office of the attorney general, 2011).

Violation of security laws through shares purchases

According to the rule 10b-18 on purchases of certain equity securities by the issuer and others, there is no doubt that the decision by Ima Dummie’s motive had an opposition from provisions in sections 9(a) (2) of the act and the rule 10b-5. This is because he took the move at the wrong time when the Giant Batteries Inc. was experiencing troubles in the market. Other conditions that make this decision unlawful are the pricing factor and the volume of the repurchases conditions.

References

Federal Trade Commission. (2009). About the bureau of consumer protection. Web.

Twomey, D.P., & Jennings, M.M. (2008). Anderson’s Business Law and the Legal Environment (21st ed.). Southwestern, mason: Cengage Learning Publishing.

Washington State Office of the Attorney General. (2011). Guide to antitrust laws. Web.