• Differentiate between matters of law and matters of ethics in business situations

Scenario

You have been hired by John and Ann Applewood as a legal assistant in light of the legal issues their company is facing. They would like you to develop a legal memorandum to help the company move forward.

Mountain Top View Inc.: Company History

A few years ago, based on their love of the outdoors, John and Ann Applewood started a small outdoor-equipment business called Mountain Top View Inc. The company has expanded so rapidly over the past few years that it is now a publicly traded corporation.

The corporate world has been challenging for John and Ann to adapt to. As the company does a lot of business online, technology use and functionality has been a major challenge. John and Ann recently hired a new CIO, Steve, to manage the website and technology aspects. The financial element was also a challenge, and John and Ann recently hired Victor as their CFO to manage financial aspects.

One morning when the owner John comes in, he hears from his CIO that the customer database information was hacked. This data breach impacted customers who ordered products online. Many customers had their names, addresses, and phone numbers stolen. John and Ann know that they should let customers know, but they are also concerned about potentially bad publicity associated with this issue.

One afternoon, Steve learns of a confidential merger that is taking place soon between Mountain Top View Inc. and a major chain outdoor company. Knowing that the stock price will increase significantly, he tells Victor about the merger over lunch and encourages him to purchase shares before information about the merger goes public. Both Steve and Victor buy 2,000 shares in company stock the day before the merger. The janitor overhears them discussing the scheme and alerts the authorities, accusing the men of insider trading.

In addition, a lawsuit has been filed for negligence and products liability against Mountain Top View Inc. for damages. A customer was injured and had to have his arm amputated after rock climbing while using equipment from Mountain Top View Inc. He claims that the line snapped and caused him to fall, and that his injury was due to faulty equipment.

Directions

• Legal Issues: As they know that their knowledge of legal issues is limited, John and Ann asked that you begin by providing some basic information about the legal issues that the company faces.
  • Describe the legal issues related to tort law and the process for handling tort law issues in court for informing the company owners about the scope of the issues facing their business. In your response, be sure to identify the relevant law and apply it to the facts presented in the scenario to identify possible outcomes.
  • Describe legal issues related to criminal law and the process for handling the criminal law issues in court for informing the company owners about the scope of the issues facing their business. In your response, be sure to identify the relevant law and apply it to the facts presented in the scenario to identify possible outcomes.
  • Describe legal issues that businesses should be aware of, focusing especially on issues related to technology. Provide specific examples of what happened, and how the issues could be handled better in the future.
• Ethical Issues: Next, describe ethical issues that occurred in the scenario for informing John and Ann of issues they should be aware of and should address within their company.
  • Describe ethical issues that the company is encountering. Provide specific examples of what happened and how the issues could be handled better in the future. Include the following in your description:
    • What ethical issues occurred in the company scenario, and how do they differ from legal issues?
    • What measures could the company take in order to follow up after the data breach and to better safeguard customer information?
  • Discuss strengths and weaknesses of ethical tests and theories for identifying potential gaps in the company’s ethical practices for future initiatives.
• Recommendations: Lastly, John and Ann would like you to provide recommendations related to corporate responsibility and assessing company ethics. Your recommendations will support them in identifying best practices to move their company forward.
  • Recommend corporate responsibility best practices that will help the company move forward in its future initiatives. Consider how the recommended practices would help the company prevent legal and ethical issues from occurring in the future.
  • Recommend an ethical theory that the company might consider adapting for informing its future operations. In your recommendation, address why the recommended theory would be a good approach for the company. Discuss specific implications for advancement in technology as the company moves forward.

What to Submit

Every project has a deliverable or deliverables, which are the files that must be submitted before your project can be assessed. For this project, you must submit the following:

Legal Memorandum

Your legal memorandum should outline legal and ethical issues for the company and make recommendations to help the company move forward with best practices for ethical practices. The legal memorandum should be 2 to 4 pages in length.

Be sure to include the following header when you submit your legal memorandum:

TO: John and Ann Applewood
FROM: <Your Name>
DATE: <Date submitted>
RE: Mountain Top View Inc. Case