12 Test Bank to Accompany Business Law Today: The Essentials

BUS 340 – exam #1

Student Name _______________________________________________

ESSAY QUESTIONS – Answer all four (4) questions – use other side of page if necessary

1. Donald Waddell got a job at the Boyce Thompson Institute for Plant Research. Waddell did not have an employment contract for a fixed term, and the institute’s employee manual said that his job was “terminable at will.” Soon after he was hired, the institute implemented a whistleblower policy designed to encourage “the highest standards of financial reporting and lawful and ethical behavior.” Waddell repeatedly told his supervisor, Sophia Darling, that she needed to file certain financial documents more promptly. Darling fired Waddell, telling him that he was disrespectful and insubordinate. Define “at will” employment and wrongful termination. Based on the evidence given, was Waddell wrongfully terminated? Why, or why not.

2. Keith Loeb and his wife own stock in Waldbaum, Inc., a publicly traded company in the supermarket business. Robert Chestman is Loeb’s stockbroker. Chestman is aware that Loeb’s wife is the granddaughter of Julia Waldbaum, a member of the board of dierctors of Waldbaum and the wife of its founder. Julia is also the mother of Ira Waldbaum, the president and controlling shareholder of Waldbaum. During a four-year perios, Chestman executed several transactions involving Waldbaum’s stock for Keith Loeb. Subsequently, Ira Waldbaum agreed to sell Waldbaum to a buyer which would result in a stock purchase agreement selling the Waldbaum shares for $50 per share. Ire told three of his children about the pending sale and admonished them to keep the news quiet until a public announcement. He alos told his sister, Shirley Witkin, about the sale and cautioned her not to discuss it because it was to remain confidential. Ignoring that advice, Shirley told her daughter, Susan, that Ira was selling the company. Shirley warned her daughter not to tell anyone except her husband, Keith Loeb, because disclosure could ruin the sale. The next day Susan told Keith about the pending sale, but told him not to tell anyone.

The following day, Keith Loeb says he talked with Chestman and told him that Waldbaum was about to be sold at a substantially higher price than its market value. Loeb asked Chestman what he thought he should do, and Chestman responded that he could not tell Loeb what to do in a situation like this. After the phone call, Chestman bought 3,000 shares of Walbaum at $24.65 per share and purchased an additional 8,000 shares for his clients with 1,000 of those shares going to Keith Loeb.

Did Keith Loeb act ethically with regard to what he told Chestman Did Robert Chestman act ethically with regard to the information he receiver from Loeb? Pick one of the ethical standards offered in the text and show how that standard applies to this situation.

1. Tri-M Group, LLC, a Pennsylvania electrical contractor, was hired to work on a veterans’ home in Delaware that was partially state funded. Delaware’s regulations allowed contractors on state-funded projects to pay a lower wage rate to apprentices if the contractors had registered their apprenticeship programs in the state. Out-of-state contractors, however, were not eligible to pay the lower rate unless they maintained a permanent office in Delaware. Tri-M filed a suit in federal court claiming that Delaware’s regulations discriminated against out-of-state contractors in violation of the dormant commerce clause. Is this a valid claim of discrimination by the State of Delaware/ Why do you think so?

4. A Louisiana resident, Daniel Crummey, purchased a used recreational vehicle (RV) from sellers in Texas after viewing photos of it on eBay. The sellers’ statements on eBay claimed that “everything works great on this RV and will provide comfort and dependability for years to come. This RV will go to Alaska and back without problems!”

Crummey picked up the RV in Texas, but on the drive home, the RV quit working. He filed a suit in Louisiana against the sellers alleging that the vehicle was defective, but the sellers claimed that the Louisiana court lacked jurisdiction. Because the sellers regularly used eBay to market and sell vehicles to remote parties and had sold this RV to a Louisiana buyer, the court found that jurisdiction was proper. Which court has jurisdiction here…Louisiana State, Texas State, or Federal Court? Why? Can more than one court have jurisdiction? If so, which courts?

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Case Study: Carlos

Molly provided a brief description of her background during the initial intake. She is the second oldest of five children born in a traditional Hispanic family. She was raised in the Catholic faith. Her parents divorced when she was 12 years old. Molly’s mother is a preschool teacher and her father is a mechanic. Molly’s father is also re-married and has two young children with his wife. Her father and stepmother live in a near-by state. Molly has not seen them since Carlos was seven years old but speaks to her father by phone a few times per year.

Molly’s older brother is currently incarcerated on drug related changes and is expected to be released in the next five years. Her younger sister died in a car accident returning home from a high school dance her senior year in high school. Molly’s youngest two siblings have families of their own and live out of state.

Molly stated that she gave birth to Carlos when she was 19 years old. She met Carlos’ father in high school. They dated on and off before the pregnancy. She did not seek immediate medical attention when she realized she was pregnant but was prompted by a friend at around 6 months to see an obstetrician.

Carlos’ father, Mike, was the youngest of two boys born in a Caucasian family. His parents divorced when he was very small. He does not know his father well as he distanced himself from the family following the divorce. His mother remarried shortly after and Mike reports a turbulent relationship with his stepfather. Mike began attending the alternative school after being caught trying to sell street drugs in 8th grade.

Molly reported a turbulent relationship with Carlos’ father. She stated that he drank alcohol often. He was violent towards Molly at times and would grab, yell, and push her. Molly’s mother did not approve of their relationship and cut ties with Molly after learning of the pregnancy. She lived with Carlos’ father for most of the pregnancy but there were times when she would have to seek shelter with friends when he was violent or kicked her out of the apartment. She further reports that she smoked cigarettes and drank alcohol to the point of intoxication prior to learning of the pregnancy.

Molly indicated that the pregnancy and delivery were relatively uneventful. Carlos was 7 pounds at birth. She states that she had a difficult time nursing him and at the time, the pediatrician reported that Carlos was behind the normal growth pattern. She also reported that Carlos cried a lot and was often difficult to console.

When Carlos was approximately 9 months old, Molly sought assistance from a local battered women’s organization. Molly and Carlos were placed in a group home with other mothers and their children. She returned to live with Carlos’s father when Carlos was approximately 1-year- old but had to return to the group home shortly thereafter. She worked as a waitress during this time. Molly relied on friends to care for Carlos while she worked and reported that he did not have stable daycare until he was 2 years old when he began attending the daycare center where Molly’s mother worked. Molly remembered that Carlos did not seem upset when left with friends nor was he excited when she returned. She described this behavior as Carlos being “a good baby”. Carlos’ father took Molly to court to secure visitation. Carlos would spend some weekends with his paternal grandparents but much less time with his father. She was awarded $200.00 a month child support. Molly stated that over the years she receives much less and often doesn’t receive any child support to help with expenses.

When Carlos was approximately three years old, they returned to live with her mother. Molly continued to work as a waitress. Carlos would stay with friends or attend daycare while Molly was at work. The assistance that Molly received from her mother was very helpful but at times would lead to disagreements about how best to care for Carlos.

When Carlos turned five years old, Molly relocated across town into a two-bedroom apartment. She indicated that Carlos regressed when they moved into the new apartment by speaking “baby-talk” and had a couple of weeks in which he had several incidences of enuresis. She stated that she used punishment at the time and that helped end the accidents at night. Carlos was behind his peers academically when he began kindergarten because he did not know his colors except for primary colors; he couldn’t count to 20 consistently; and he did not know the alphabet in full. He would interact with the other children for only brief periods of time and most of these interactions ended with Carlos getting angry. Molly stated that the teachers as well as Carlos’ pediatrician indicated at the time that this was normal.

Molly reports that she married Carlos’ stepfather when Carlos was 6 years old. Carlos continued to see his paternal grandparents until he was five years old, but these visits have tapered off significantly. Carlos now sees his biological father once every 3-6 months for brief visits. Carlos has two younger sisters both of which are under 3-years-old. Molly stated that she is currently working at a preschool and her husband delivers appliances.

Carlos is currently in the 4th grade. Molly indicated that Carlos accepts that his stepfather is in authority but does not seem to have the relationship she thinks he should with his stepfather. Carlos tends to be an average student but struggles to maintain even a B/C average. Molly has noticed that it takes Carlos more time to grasp concepts and believes this is because he is not very interested in school. She stated that his teachers have indicated that Carlos appears very shy and not engaged most of the time. Carlos generally complies with directions but will, at times, talk back. Teachers report that Carlos can do the work but often does not appear interested. He tends to stay to himself and when he interacts with other children, it ends quickly with Carlos appearing upset or angry. At home, Carlos is generally compliant but will talk back or slam doors when asked to complete a chore. He tends to be dismissive of his younger sisters.

Your initial impression of Carlos is one of a quiet and respectful little boy. He sat quietly next to his mother as she discussed her concerns. When interacting with you, Carlos was initially hesitant, but he appropriately answered questions. As his mother tended to the younger siblings, Carlos handed her necessities out of the diaper bag and sat quietly on the coach.

Carlos reported that he has few friends at school. Molly reported that Carlos is uncoordinated and physically smaller than other boys his age. Carlos tends to spend a lot of time alone which Molly attributes to the busy work schedules she and her husband have. He usually plays video games or draws. He indicated that he is made fun of at school and on the bus. He would like to be a professional baseball player when he grows up because his dad likes baseball too. Carlos expressed to you his desire to not get into trouble at school anymore and to do better with his studies. Overall, Carlos was engaging and responsive throughout the initial interview.

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