Managers and the Legal Environment Strategies for Business

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Managers and the Legal Environment Strategies for Business, 9th ed. by Constance E. Bagley Cover......Page 1 Dedication......Page 5 Contents in Brief......Page 6 Table of Contents......Page 8 About the Author......Page 17 Preface......Page 19 Table of Cases......Page 29 Unit 1: Foundations of the Legal and Regulatory Environment......Page 43 Introduction......Page 44 1-1 The Systems Approach to Law, Business and Society......Page 45 1-2 Law and Public Policy......Page 48 1-3 The Legally Astute Manager......Page 52 Questions and Case Problems......Page 57 2-1 Ethics Matter......Page 58 2-2 The Ethical Tone Is Set at the Top......Page 61 2-3 The Ethical Business Leader's Decision Tree......Page 62 2-4 Finding the "Sweet Spot"......Page 67 2-6 Failing to Meet Societal Expectations......Page 69 2-7 Positive Action......Page 72 2-8 Promoting Ethical Behavior......Page 75 2-9 Honor or "The Morals of the Market Place"......Page 76 Questions and Case Problems......Page 82 3-1 How to Read a Case Citation......Page 85 3-2 Sources of Law......Page 86 3-4 Federal Jurisdiction......Page 88 3-5 Federal Courts......Page 90 3-6 State Courts......Page 92 3-8 Personal Jurisdiction......Page 93 3-9 Choice of Forum, Waiver of Right to Trial by Jury, and Choice of Law......Page 95 3-10 Alternatives to Litigation......Page 96 3-11 Class Actions......Page 97 3-12 Civil Procedure: Litigation Steps......Page 100 3-14 Negotiation......Page 103 3-15 Mediation......Page 105 3-16 Arbitration......Page 106 3-17 ADR Hybrids......Page 112 3-18 Discovery......Page 113 3-19 Document Retention and Deletion......Page 115 3-20 Attorney-Client Privilege, Attorney Work-Product Doctrine, and Other Privileges......Page 116 Key Words and Phrases......Page 124 Questions and Case Problems......Page 125 4-2 Separation of Powers......Page 128 4-3 Supremacy Clause and Preemption......Page 132 4-4 Federalism......Page 133 4-5 The Commerce Clause......Page 134 4-7 Protection of Individual Liberties......Page 136 4-8 Freedom of Speech and the Press......Page 138 4-10 Freedom of Religion......Page 149 4-12 Due Process under the Fifth and Fourteenth Amendments......Page 150 4-13 Compensation for Takings......Page 152 4-14 Equal Protection......Page 153 4-15 Right to Jury Trial......Page 157 Key Words and Phrases......Page 160 Questions and Case Problems......Page 161 5-2 Types of Agency Relationships......Page 164 5-3 Fiduciary Duty......Page 168 5-4 Agent's Ability to Bind the Principal to Contracts Entered into by the Agent......Page 171 5-5 Liability for Torts of Agents......Page 173 5-6 Liability of the Principal for Civil and Criminal Violations by an Agent......Page 175 Key Words and Phrases......Page 178 Questions and Case Problems......Page 179 6-1 How Administrative Agencies Act......Page 182 6-2 Administrative Agencies and the Constitution......Page 185 6-4 Standards for Judicial Review of Agency Actions......Page 189 6-5 Limits on Decision-Making Power of Agencies......Page 193 6-7 Obtaining Documents from an Agency......Page 194 Questions and Case Problems......Page 199 Unit II: The Legal Environment......Page 203 Introduction......Page 204 7-2 Agreement......Page 205 7-3 Consideration......Page 207 7-4 Capacity......Page 208 7-6 Promissory Estoppel......Page 209 7-7 Precontractual Liability for Failure to Negotiate in Good Faith......Page 210 7-8 Unconscionability......Page 213 7-9 Genuineness of Assent......Page 216 7-10 Statute of Frauds......Page 218 7-11 The Parol Evidence Rule......Page 219 7-12 Changed Circumstances......Page 220 7-14 Discharge of a Contract......Page 221 7-16 Third-Party Beneficiaries......Page 222 7-17 Remedies......Page 224 7-18 Contracts Relating to Mergers and Acquisitions......Page 226 Questions and Case Problems......Page 234 Introduction......Page 237 8-2 Software Licenses......Page 238 8-3 Contract Formation......Page 240 8-5 Electronic Contracts: The Uniform Electronic Transactions Act and the E-Sign Act......Page 244 8-6 Duty of Good Faith under the UCC......Page 245 8-7 Warranties......Page 246 8-10 Allocation of the Risk of Loss......Page 249 8-12 Unconscionability......Page 250 8-13 Commercial Impracticability......Page 251 8-14 Remedies......Page 252 Questions and Case Problems......Page 259 9-1 Elements of an Intentional Tort and Defenses......Page 262 9-2 Intentional Torts to Protect Persons......Page 263 9-3 Intentional Torts That Protect Property......Page 265 9-4 Intentional Torts That Protect Certain Economic Interests and Business Relationships......Page 267 9-5 Negligence......Page 270 9-6 Liability of Accountants and Other Professionals to Third Parties......Page 276 9-8 Strict Liability......Page 278 9-9 Respondeat Superior and Vicarious Liability......Page 279 9-11 Damages......Page 281 9-13 Liability of Multiple Defendants......Page 282 9-14 Privacy Protection......Page 283 9-15 Identity Theft......Page 288 Key Words and Phrases......Page 296 Questions and Case Problems......Page 297 10-1 Theories of Recovery......Page 299 10-2 Litigation Strategy and the Availability of Punitive Damages......Page 302 10-3 What Is a Product?......Page 304 10-4 What Makes a Product Defective?......Page 305 10-6 Successor, Market-Share, and Premises Liability......Page 310 10-8 Common Law Defenses......Page 314 10-9 Preemption Defense......Page 316 10-10 State Legislative Limits on Liability......Page 318 10-11 Guns, Tobacco, and "Big Food"......Page 321 Questions and Case Problems......Page 327 11-1 Patents......Page 330 11-2 Obtaining Patent Protection......Page 334 11-3 Patent Infringement and Litigation......Page 335 11-4 Copyrights......Page 338 11-5 Registered Mask Works......Page 346 11-6 Trademarks......Page 347 11-8 Trade Dress......Page 353 11-9 Trade Secrets......Page 354 Key Words and Phrases......Page 365 Questions and Case Problems......Page 366 Unit III: Human Resources......Page 369 12-1 At-Will Employment......Page 370 12-2 Wrongful Discharge......Page 371 12-3 Statutory and Constitutional Protections for Whistleblowers......Page 373 12-4 Fraudulent Inducement......Page 374 12-5 Noncompete and Other Agreements......Page 375 12-7 References for Former Employees......Page 377 12-8 Employer Testing and Surveillance......Page 378 12-9 Responsibility for Worker Safety......Page 382 12-10 Minimum Wage, Overtime Payments, and Child Labor......Page 385 12-11 Pension Plans and Other Employee Benefit Plans......Page 389 12-12 Worker Adjustment and Retraining Notification Act (WARN Act)......Page 392 12-13 Immigration Law......Page 393 12-14 Labor-Management Relations......Page 395 Questions and Case Problems......Page 407 Introduction......Page 411 13-1 Overview of Civil Rights Legislation......Page 412 13-3 Traditional Discrimination Claims under Title VII......Page 415 13-4 Harassment Claims under Title VII......Page 419 13-5 Title VII Duty to Accommodate Religious Beliefs......Page 424 13-6 Retaliation......Page 426 13-7 Proving Causation under Title VII......Page 427 13-9 Remedies under Title VII......Page 428 13-11 Age Discrimination......Page 429 13-12 Disability Discrimination......Page 431 13-15 Family and Medical Leave Act......Page 436 13-17 Affirmative Action......Page 438 13-19 The Extraterritorial Reach of U.S. Employment Discrimination Laws......Page 440 Questions and Case Problems......Page 446 Unit IV: The Regulatory Environment......Page 449 14-1 Definition of a Crime......Page 450 14-2 Elements of a Crime......Page 451 14-4 Criminal Procedure......Page 453 14-5 The Constitution's Ex Post Facto Clause......Page 455 14-6 The Fourth Amendment's Ban on Unreasonable Searches and Seizures......Page 456 14-7 The Fifth Amendment's Protections......Page 462 14-8 The Sixth Amendment's Procedural Protections......Page 463 14-10 Nonconstitutional Protections......Page 464 14-11 Federal Sentencing Guidelines......Page 465 14-12 Individual Liability for Criminal Acts......Page 468 14-13 White-Collar Crime......Page 472 14-14 Other Federal and State Regulatory and Tax Offenses......Page 487 14-15 Amnesty and Leniency Programs......Page 489 Questions and Case Problems......Page 492 Introduction......Page 495 15-1 Overview of Environmental Laws......Page 496 15-2 Administration of Environmental Laws......Page 497 15-3 Standing......Page 498 15-4 The Clean Air Act......Page 499 15-5 Addressing Climate Change......Page 502 15-6 The Clean Water Act......Page 504 15-7 Other Federal and State Chemical Regulations......Page 505 15-8 The Resource Conservation and Recovery Act (RCRA)......Page 506 15-9 The Federal Superfund Law (CERCLA)......Page 508 15-11 Enforcement Activities and Sanctions for Noncompliance......Page 514 15-12 Strategic Environmental Compliance Systems......Page 517 Questions and Case Problems......Page 527 Introduction......Page 530 16-2 Section 1 of the Sherman Act: Agreements in Restraint of Trade......Page 531 16-3 Product Bundling and Other Tying Arrangements......Page 538 16-5 Section 2 of the Sherman Act: Monopolies and Attempts to Monopolize......Page 540 16-6 Mergers: Section 7 of the Clayton Act......Page 547 16-7 Price Discrimination: The Robinson-Patman Act......Page 551 16-10 Antitrust Enforcement......Page 553 16-11 The Extraterritorial Reach of U.S. Antitrust Laws......Page 556 Key Words and Phrases......Page 562 Questions and Case Problems......Page 563 17-1 Commissions and Agencies......Page 566 17-2 Safety, Packaging, and Labeling of Conventionally Grown Foods......Page 568 17-3 Genetically Modified Foods and Pesticides......Page 571 17-4 Drugs and Medical Devices......Page 573 17-5 Tobacco and E-Cigarettes......Page 575 17-6 Labeling of Other Products......Page 576 17-7 Broadcasting and the Internet......Page 577 17-8 The Consumer Product Safety Commission......Page 578 17-9 Automobile Safety......Page 580 17-10 Protecting Consumer Privacy and Canning Spam......Page 581 17-11 Misleading Advertising and Other Unfair or Deceptive Trade Practices......Page 582 17-12 Self-Regulation of the Advertising Industry......Page 588 17-14 Consumer Credit (Including Mortgages)......Page 589 17-15 Regulation of Virtual Currencies......Page 595 Questions and Case Problems......Page 600 18-1 Forms of Ownership......Page 603 18-2 Transfer of Ownership......Page 606 18-3 Recording Statutes and Title Insurance......Page 607 18-5 Acquisitions and Dispositions......Page 609 18-6 Environmental Due Diligence......Page 610 18-7 Preliminary Agreements......Page 611 18-8 Financing......Page 612 18-9 Appraisal Methods......Page 614 18-11 Commercial Leasing......Page 615 18-12 Environmental Impact Statements and Assessments......Page 616 18-13 Government Regulation of Land Use......Page 617 18-14 Physical Accessibility to Commercial Facilities and Public Accommodations: The ADA and State Analogues......Page 624 Key Words and Phrases......Page 628 Questions and Case Problems......Page 629 Unit V: Corporate Governance, Ownership, and Control......Page 633 19-2 Sole Proprietorships......Page 634 19-4 Joint Ventures......Page 635 19-7 Master Limited Partnerships......Page 636 19-8 Corporations......Page 637 19-9 Limited Liability Companies......Page 638 19-11 Income Tax Considerations......Page 642 19-12 Effect of Agency Law on Limited Liability for Managers......Page 643 19-13 Partnership Mechanics......Page 644 19-14 Limited Partnership Requirements......Page 649 19-15 Incorporation......Page 650 19-16 Piercing the Veil of a Corporation or Limited Liability Company......Page 653 19-17 Management of the Corporation......Page 654 19-18 Structural Corporate Changes......Page 661 Questions and Case Problems......Page 667 20-1 The Business Judgment Rule and the Duty of Care......Page 670 20-2 Duty of Good Faith......Page 677 20-4 Duty of Candor......Page 680 20-5 Duties in the Context of Mergers and Acquisitions Approved by the Board......Page 681 20-6 Hostile Takeovers, Takeover Defenses, and Application of the Unocal, Blasius, and Revlon Tests......Page 685 20-8 Executive Compensation......Page 691 20-9 Duties of Controlling Shareholders......Page 693 Key Words and Phrases......Page 700 Questions and Case Problems......Page 701 Unit VI: Securities and Financial Transactions......Page 703 21-1 The Federal Statutory Scheme......Page 704 21-3 State Blue Sky Laws......Page 707 21-4 What Is a Security?......Page 708 21-6 Registration of Securities Offerings......Page 711 21-9 Reorganizations and Combinations......Page 718 21-10 Exemptions for Offerings by the Issuer......Page 719 21-12 Exemptions for Secondary Offerings......Page 725 21-14 Violation of the Registration and Prospectus-Delivery Requirements: Section 12(A)(1) of the 1933 Act......Page 729 21-15 Section 11 of the 1933 Act......Page 730 21-16 Section 12(A)(2) of the 1933 Act......Page 736 21-17 Criminal Penalties......Page 738 Questions and Case Problems......Page 741 22-1 Overview of Federal Antifraud Provisions......Page 744 22-2 Rule 10b-5......Page 745 22-4 Misstatement or Omission......Page 746 22-5 Materiality......Page 752 22-6 Scienter......Page 753 22-7 In Connection with the Purchase or Sale of Any Security......Page 754 22-8 Reliance......Page 755 22-12 Regulation AC and Securities Fraud Involving a Publicly Traded Company......Page 760 22-13 Litigation Reform Act Safe Harbor for Forward-Looking Statements......Page 761 22-14 Liability of Secondary Actors......Page 762 22-15 Section 17(A) of the 1933 Act......Page 763 22-18 Definition of Insider Trading......Page 764 22-22 Enforcement of Antifraud Prohibitions......Page 770 22-23 Whistleblower Protections and Bounty Payments......Page 772 22-24 Extraterritorial Application of the Securities Laws......Page 776 22-26 Other Requirements Applicable to Officers, Directors, and Greater-Than-10% Shareholders......Page 777 Questions and Case Problems......Page 786 Introduction......Page 789 23-1 Loan Agreements......Page 790 23-2 Commercial Loan Categories......Page 794 23-3 Secured Transactions under Article 9 of the UCC......Page 795 23-4 Equipment Leasing......Page 798 23-5 Guaranties......Page 799 23-6 Subordination......Page 800 23-7 Lender Liability......Page 801 23-9 Management Duties May Shift When a Company Enters the Insolvency Zone......Page 804 23-10 Overview of Bankruptcy Law......Page 807 23-11 Provisions Applicable to All Bankruptcies......Page 812 23-12 Chapter 11 Reorganizations......Page 817 23-14 Chapter 7 Liquidations......Page 820 23-16 Municipal Bankruptcies under Chapter 9......Page 823 23-17 Cross-Border Insolvencies under Chapter 15......Page 824 Questions and Case Problems......Page 829 Unit VII: International Business......Page 833 Introduction......Page 834 24-1 Types of Legal Systems......Page 835 24-2 Sources of International Law......Page 839 24-3 National Laws Affecting International Business and Governmental Affairs......Page 841 24-4 Extraterritorial Application of National Laws......Page 842 24-5 Foreign Corrupt Practices Act and Other Bribery Bans......Page 845 24-7 U.S. Trade Regime......Page 848 24-8 Regional International Trade Regimes......Page 854 24-9 The World Trade Organization......Page 857 24-10 Regional Economic Integration......Page 860 24-11 The European Union......Page 861 24-13 Investing and Doing Business Abroad......Page 866 24-14 Contracting across National Borders......Page 870 24-15 Dispute Resolution in International Transactions......Page 872 24-16 Disputes with Foreign Governments......Page 874 Key Words and Phrases......Page 881 Questions and Case Problems......Page 882 Appendix A: The Constitution of the United States of America......Page 887 Appendix B: Title VII of the Civil Rights Act of 1964 (Selected Provisions)......Page 895 Appendix C: Americans with Disabilities Act of 1990 and ADA Amendments Act of 2008 (Selected Provisions)......Page 897 Appendix E: Clayton Act of 1914 as Amended (Selected Provisions)......Page 900 Appendix G: Securities Act of 1933 as Amended (Selected Provisions)......Page 901 Appendix H: Securities Exchange Act of 1934 as Amended (Selected Provisions)......Page 904 Appendix I: Rules 10b-5, 10b5-1, and 10b5-2 from Code of Federal Regulations......Page 905 Appendix J: Rule 14e-3 from Code of Federal Regulations......Page 907 Appendix K: Sarbanes-Oxley Act of 2002 as Amended (Selected Provisions)......Page 908 Appendix L: Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 as Amended (Selected Provisions)......Page 909 Appendix M: Article 2 of Uniform Commercial Code (Selected Provisions)......Page 911 Glossary......Page 917 Index......Page 953