Business Law Week 3 Notes
Business Law Week 3 Notes BL 2413
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This 6 page Class Notes was uploaded by Emily Green on Saturday February 13, 2016. The Class Notes belongs to BL 2413 at Mississippi State University taught by Stephanie Mallette in Summer 2015. Since its upload, it has received 56 views. For similar materials see Legal Envt Business in Business Law at Mississippi State University.
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Date Created: 02/13/16
Business and the Constitution • The Constitutional Powers of Government ◦ before the Revolutionary War, states wanted a confederation with weak national government and very limited powers • now we have a Federal form of Government ◦ shares power between national and state governments ◦ national government has limited, enumerated powers delegated from states ◦ states do have speciﬁc powers (regulatory powers) ◦ 10th amendment ‣ police powers • for order, safety, and morals ‣ relations among the states • privileges and immunities clause ◦ article IV section 2 of the Constitution ◦ prevents state from imposing unreasonable burdens on citizens ‣ state cannot use power over citizens traveling accross states • you can't charge more for an out-of-state citizen to stay in your hotel than you would charge an in-state citizen ‣ full faith and credit clause • only applies to civil matters • the law of property in one state will be enforced in all other states ◦ separation of powers ‣ federal government provides checks and balances ‣ legislative (congress) creates the laws ‣ executive (president and agencies) enforce the laws that congress creates ‣ judicial (courts) interpret the law and how the executive branch use/enforce the laws ◦ commerce clause ‣ power to regulate interstate commerce • Gibbons vs Ogden (1824) ◦ an african american tried to stay at an Atlanta hotel that did not accept them (was still segregated) but everything in that hotel had been through interstate commerce so it was a ruling for the supreme court who decided that the statutes were not constitutional ◦ commerce clause was the main reason that ended segregation • congress has the power to regulate any interstate commerce and any activities or behavior that aﬀect it ‣ expansion of powers • the supreme court expanded the commerce clause to purely intrastate businesses • 1964: Supreme Court prohibited racial discrimination in interstate commerce • commerce clause authorizes the national government to regulate virtually any business enterprise including internet businesses • medical marijuana ◦ legal in some states but still illegal in other states ◦ Supreme Court states that it "does not insulate users from federal prosecution" ‣ the supreme court believes that it is more harmful than cocaine, heroin, and methamphetamine ‣ schedule 1 controlled substance ◦ "dormant" commerce clause ‣ federal government has exclusive authority to regulate commerce that substantially aﬀect trade among the states ‣ states possess inherent police powers to regulate health and safety public and general welfare • these powers or regulations substantially interfere with interstate commerce will be struck down • "Smoky and the Bandit" ◦ trying to move Coors beer across state lines, have to sneak through the state of Mississippi because it had more than 0.05% alcohol ◦ it was ﬁne that Mississippi did not want anyone selling it in the state, but it was not okay that they couldn't even transport it through the state ◦ Supremacy Clause and Federal Preemption ‣ work hand in glove with the commerce clause ‣ the constitution of the United States and it's interpretations is the supreme law of the land to be followed by United States Code and treaties in the United States • supersede all other laws • are penultimate laws in the US ‣ if there is a conﬂict between the federal and state law, federal law comes ﬁrst • Bill of Rights ◦ these are the ﬁrst 10 amendments of the United States Constitution ◦ limits on federal and state actions ‣ originally, when the bill was passed after the constitution was matriculated through the states and it was ratiﬁed, the biggest concern was that these fundamental rights were missing: • the right to speak freely, the right to criticize the government, the right to a free and open press, etc. • why the bill of rights was so important • when the greater good and safety is infringed on, freedom of speech is limited • rights are not absolute • Edward Snowden tested the right to criticize the government ◦ 'they are lying to you and here is why' • corporate espionage • every bill of rights has been "incorporated" to the states because of the 14th amendment ◦ freedom of speech ‣ right to this is the basis of our democratic government ‣ also includes symbolic speech including gestures, movements, articles of clothing, etc • these are free to a certain extent but still considered free ‣ reasonable restrictions • restrictions must be reasonable ◦ there has to be a balance between the government's obligation to protect, and citizen's exercise of rights ◦ content-neutral laws: aimed at combating some social problems ‣ child pornography: biggest expansion of free speech ‣ there's no balance between the government's right to protect and the citizen's right to speak freely • if there is no real video of child pornography, the government cannot restrict people from watching animated child pornography instead because then they would be protecting the thought and desire • more than just protecting the action • the government can't control our thoughts, desires, and behaviors • laws that restrict the content of speech ◦ laws that restrict content must have a compelling state interest ◦ case 4.2 Doe vs. Prosecutor, Marion County, Indiana (2013) • corporal political speech ◦ Citizens United vs. Federal Election Commission (2010) ◦ supreme court ruled that corporations can spend freely to support or oppose candidates for President and Congress ‣ in federal elections, corporations can give freely without exposing what individuals were included in the decision to give that money • commercial speech ◦ courts give substantial protection to commercial speech (in advertising) ‣ restrictions implement substantial government interest; directly advance interest; go no furthur than necessary • unprotected speech ◦ supreme court has held that certain speech is not protected ‣ defamatory speech ‣ threatening speech ‣ ﬁghting words • using race, sexuality, or "slutiness" for example against someone • if someone were to call a girl a slut and she hit that person in return or someone hit that person for her, the hitter has reason to sue the party that called her a slut ◦ freedom of religion ‣ government cannot establish or promote any religion over another ‣ government also cannot prohibit exercising any religion • santa maria ◦ people were draining blood from chickens for their religion, created health problems because the slaughtering of the chickens raised the amount of chicken carcasses ‣ these people tried to sue the government for limiting the number of chicken carcasses they could have ‣ did not win because there are other ways to get chicken blood other than slaughtering chickens ‣ free exercise clause • guarantees a person's right to freely exercise her religion ◦ employers must reasonably accommodate beliefs as long as employee has sincerely held beliefs (they are actually that religion, not faking it to get out of work, get special accommodations, etc) • exception ◦ when religious practices work against public policy and welfare, government can act in protecting the public ‣ example: polygamy • works against public policy and welfare because one husband is not going to be able to provide and care for all of their wives and their wives' children • if the husband can't pay for all of these people, it is a drain on government money ◦ searches and seizures ‣ fourth amendment • search warrants must have probable cause (this is not hard to gain) but also must be speciﬁc • general searches through personal belongings are illegal (TSA can't randomly search your carry ons) • "Sting Rays" (these are cell phone interceptors) are problematic because they intercept every phone call in the area until they ﬁnd someone who has violated the law ◦ violates everyone else's privacy who isn't doing anything wrong in the mean time • warrantless search is only permissible for seizure of spoiled or contaminated food ‣ ﬁfth amendment • guarantees no person can be compelled to testify against himself in a criminal proceeding ◦ no defendant actually has to talk to a law enforcement oﬃcer ‣ they decide if you are lying or telling the truth and you can go to jail for "lying" to them ◦ there is a youtube video of a law professor talking about why you should never talk to the police • does not apply to corporations or partnerships ◦ Due Process and Equal Protection ‣ procedural due process • any government rule, regulation, etc that takes life, liberty, or property must be fair ‣ substantive due process • focuses on the content (the right) ◦ fundamental right requires compelling state interest ◦ non-fundamental right is the rational relationship to state interest • Dred Scott Decision ◦ a slave was not a entitled to due process because he was not a citizen (didn't go through the citizen process while immigrating) ‣ equal protection • government must treat everyone equally ◦ privacy rights ‣ not speciﬁcally in the constitution • right not expressly found in the constitution • over time this was a developed concept ◦ the right to be free from the intrusion of the government ◦ there must be a compelling interest for an invasion of these rights Chapter 5 • Business Ethics ◦ the study of right and wrong behavior ‣ whether an action is fair, right, or just ◦ in business, ethical decisions are the application of moral and ethical principles to the marketplace and workplace ‣ just because something is legal it does not make it ethical or unethical ‣ same case if something is moral ◦ importance of ethics ‣ directors and oﬃcers owe a complex set of ethical duties to their shareholders (internal or external) ‣ when duties conﬂict, ethical dilemmas are created • interest of the shareholders (making money) is the most important for companies, not necessarily good/safe workplaces and other ethical options • chickﬁla treats their employees well, make a lot of money, but could make more money by staying open on Sundays • mac treats their employees badly and aren't as ethical, but they make a lot of money ‣ proﬁt maximization • some argue that a business's only goal should be to maximize their proﬁt • if a business is making more than they planned to and don't tell anyone, is that wrong ‣ corporate citizenship • promote goals that society considers worthwhile and take positive steps towards solving problems ‣ making business decision with ethics • long-run proﬁt maximization vs short-run gains ‣ relationship of law and ethics • moral minimum ◦ "simply complying with the law" ‣ as long as we are not breaking the law, we are being ethical ◦ "don't be evil" • ethics are very uncertain and extremely subjective ◦ many gray areas of the law ‣ one company may convince another company or another part of their company to act unethically and not get in trouble themselves ‣ example: Exxon and BP ◦ social media ‣ hiring procedures • employers are increasingly looking into Facebook and other media to see what an applicant posts • if you are posting negative things about their businesses or other unsatisfactory behavior, you can get ﬁred or get in trouble • might be legal, but it is up to the viewer to decide if it is ethical or not ◦ principles and philosophies ‣ duty based-ethics • derived from religious and philosophical standards • religious ethical standards ◦ rightness or wrongness of an action is usually judged according to its conformity to an absolute rule that commands a particular form of behavior ◦ ex: clerk would not marry gay people and went to jail because she didn't believe that gay people should be married because of her religion ‣ went to jail ‣ diﬃcult to decide if this is ethical or not because it involves religion vs law • principle of rights ◦ every duty you have gives a corresponding right ‣ whether or not an action that you performed was ethical may be determined by what the consequences are and how it aﬀects other people ◦ Kantian Ethics ‣ premised on the belief that moral behavior can be derived from human nature ‣ foundation of this belief system is the categorical imperative • whether an action is right or wrong, it's judged by estimating the consequences that will follow if everyone in society performed the act under consideration • ex: if everyone jumps oﬀ a bridge, would you do it? ‣ outcome based ethics • utilitarianism ◦ whether the greatest good is made for the greatest amount of people ◦ if you have 5,000 treatments to a disease that 10,000 people contain, how do you decide who all gets that medication/treatment? ◦ importance of ethical leadership ‣ behavior of owners and managers • upper businessmen were making all the decisions to keep more money to themselves rather than beneﬁtting shareholders ◦ foreign corrupt practices act ‣ FCPA does not permit "grease" payments to minor oﬃcials • you cannot bribe foreign oﬃcials if you are an american citizen or company ‣ nor does it prohibit payments to foreign oﬃcials which are lawful in that country • if there's a law that only native people (from that country) can pay a fee to go mining, you can't try to pay to mine it too • if they state that everyone has to pay a fee to go mining, you can pay that fee for the service as well
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