Suppose the company you work for is going through some tough times and your boss has no choice but to let three employees go.

Assignment Brief

Case Assignment

In this assignment, you will be presented with a variety of hypothetical scenarios. For each scenario, you need to explain the reasoning behind your answer and use at least one reference from the background materials to support your answer. Overall you need to have a minimum of three references from the background materials cited in your paper. In addition to three sources from the background materials, feel free to cite additional sources that are not included in the background materials.

1. Suppose the company you work for is going through some tough times and your boss has no choice but to let three employees go. However, he has not yet made up his mind as to who should be laid off. One day he comes to the office in a very bad mood and decides on the spot which employees he will let go. He walks up to one employee and says, “You have come in to work late almost every day this month and I caught you sleeping on the job three times. Clear out your office!” Then he walks up to another employee and says “You’re fired – I don’t like those green shirts you wear!” Finally, after a brief pause he walks up to a third employee and says, “Get out of here, I do not want any Buddhists working in my office!” Of these three people who were fired, which one do you think has the greatest case for a lawsuit and which one do you think has the weakest case?
2. You are the owner of a chocolate factory. One of your workers takes the initiative and decides to place an order for more sugar from one of your suppliers while you are out of town. Since the sugar was necessary for keeping operations going while you were gone, you happily pay the supplier for the order when you get back in town. This same employee starts to place new orders for sugar anytime supplies are low, and even though you never gave him formal permission to do this you keep paying the supplier. However, one day you decide that the price the supplier is paying is too high and you refuse to pay on the grounds that your employee was not authorized to place the order. Do you think you would be liable for this payment or not based on the concepts of agency law?
3. You are the owner of a retail business, and you have fallen behind for many months on your loan repayments to the bank (you owe a total of $100,000). The bank has become fed up and now wants you to hand over all of your remaining company funds to pay back the loan. However, the holiday shopping season is coming up in a few months and this is where you typically do 60-70% of your business for the year. Without your company funds you will not be able to pay your rent and pay your staff, so you will not be able to pay back the bank until after the holiday season. If you end up needing to file for bankruptcy, what type do you think would be most appropriate for this situation – Chapter 7, Chapter 11, or Chapter 13?
4. Now suppose that you decide to open up a full-service 24-hour auto repair shop. Your shop is the only one that is open 24 hours a day in your home town. In fact, you are pretty sure it is the only 24-hour auto repair shop in the state. Your business is now a great success, but you had a great deal of trouble finally finding an auto mechanic willing to work the late shift. You are now concerned that this mechanic can leave you at any time and go open help someone else open up a 24-hour shop. You decide to make him sign a noncompetition agreement saying that if he ever leaves your shop he cannot work as an auto mechanic anywhere in your state for the next seven years. He looks at you and says, “Are you out of your mind?” What alternative terms of a noncompetition agreement do you think would be more reasonable?
5. You are the owner of a cleaning service. You make sure all of your employees have thorough background checks before hiring them, as you want your clients to be confident that none of their personal items will be stolen when you send someone to clean their house. However, when spring comes, everyone wants help with their spring cleaning and you have more business than you can handle. You decide to subcontract some of your work to another cleaning service at the last minute and you do not ask this service what kind of background checks they do on their own employees. One of your clients complains that an employee of the subcontractor stole a valuable painting from their house. Would you be liable for this theft?

Assignment Expectations

• Answer the assignment questions directly.
• Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.
• Use reliable and credible sources as your references. Articles published in established newspapers or business journals/magazines are preferred. If you find articles on the Internet, make sure they are from a credible source.

Sample Answer

Legal and Ethical Issues in Employment and Business: Case Analysis

In any business, legal compliance and ethical decision-making are essential to minimise risk and maintain good reputation. This paper examines five hypothetical scenarios involving employment termination, agency law, bankruptcy, noncompetition agreements, and subcontracting liability. Each scenario is analysed in relation to relevant legal principles, using references from the background materials and additional credible sources.

Scenario 1: Unfair Dismissal – Who Has the Strongest Case?

In this scenario, three employees are dismissed for different reasons: repeated lateness and sleeping on the job; wearing green shirts; and being Buddhist. Of these, the third employee has the strongest legal case for a lawsuit, while the first has the weakest.

The third dismissal involves religious discrimination, which is prohibited under anti-discrimination laws. According to the Civil Rights Act of 1964 (Title VII), employers cannot fire someone based on religion (Tramel, 2023). The boss’s statement, “I do not want any Buddhists working here,” is direct evidence of religious bias, which strongly supports a claim of wrongful termination.

In contrast, the first employee was terminated for poor performance – repeated lateness and sleeping on the job. This is a legitimate reason for dismissal and is generally supported by employment law, assuming that the employer followed appropriate procedures. As noted by Nkomo et al. (2011), misconduct and poor attendance are acceptable grounds for termination.

The second firing, for wearing green shirts, is legally questionable but not as strong as the religious discrimination case. While the reason is trivial, unless it relates to a protected characteristic (e.g., cultural or religious dress), it might not be unlawful, especially in at-will employment states. However, it may breach company policies or employment contracts.

Thus, the strongest lawsuit potential lies with the employee dismissed for religious reasons, while the weakest case is the one fired for misconduct.

Scenario 2: Agency Law – Is the Employer Liable?

In this scenario, an employee orders sugar without formal authorisation, and the employer repeatedly pays for these orders. Later, the employer refuses to pay one order, claiming lack of authority.

Under agency law, particularly the concept of apparent authority, the employer would likely be liable for the payment. Apparent authority arises when an employer’s conduct leads a third party (here, the supplier) to reasonably believe the employee has authority (Cheeseman, 2019). By consistently paying for past orders without objection, the employer created the appearance of authority.

Moreover, since the sugar was essential to operations, this also falls under implied authority, the power to take actions reasonably necessary to perform duties (Nkomo et al., 2011). By benefiting from the employee’s actions and not correcting the behaviour, the employer tacitly approved it.

Therefore, the employer is likely legally bound to pay for the sugar due to established apparent and implied authority.

Scenario 3: Bankruptcy – Appropriate Chapter

The business owner owes $100,000 and cannot repay immediately due to the upcoming holiday season, which brings in most revenue. In this situation, Chapter 11 bankruptcy is most appropriate.

Chapter 11 allows a business to restructure debts and continue operating while making repayments (Miller & Cross, 2019). This is ideal as it gives the owner time to recover financially during the profitable season. Filing under Chapter 7, which involves liquidating assets, would mean shutting down the business, clearly not viable. Chapter 13 is typically used by individuals with regular income and might not be suitable for a business entity.

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