Business Law Exam 3

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Worker’s Compensation

Provides benefits to employees injured on the job, covering medical expenses and lost wages. Employees usually cannot sue the employer if workers’ compensation applies.

Minimum Wage Policies (FLSA)

Federal law sets minimum wage, overtime rules, and child labor standards. Employers must pay at least the federal minimum wage unless exempt employees apply.

Family and Medical Leave Act (FMLA)

Allows eligible employees up to 12 weeks unpaid leave per year for family or medical reasons. Applies to employers with 50+ employees, and workers must be employed at least 1 year. Employee must be restored to same or equivalent job.

OSHA (Occupational Safety and Health Act)

Federal law requires employers to provide a safe workplace. OSHA sets safety standards and allows inspections and penalties for violations.

Norris-LaGuardia Act

Limits courts from issuing injunctions against peaceful union strikes and activities. Strengthened workers’ ability to organize unions.

National Labor Relations Act (NLRA)

Protects employee rights to form unions, bargain collectively, and strike. Created the NLRB to enforce these protections.

Landrum-Griffin Act

Protects union members from union leadership misconduct. Requires financial disclosure, fair elections, and democratic procedures inside unions.

National Labor Relations Board (NLRB)

Federal agency that supervises union elections and investigates unfair labor practices under the NLRA.

Union Election

Held when employees vote whether they want union representation. A union is certified if majority of voting employees approve.

Closed Shop

Employer hires only union members (illegal today).

Union Shop

Employees must join the union after being hired.

Agency Shop

Employees must pay union fees, but don’t have to join the union.

Open Shop

Union membership is optional.

Right-to-Work Laws

State laws prohibit requiring employees to join or pay unions as a condition of employment.

Union Strikes

Protected strikes are legal under the NLRA (economic or unfair labor practice strikes). Employers may hire replacement workers in some cases.

EEOC (Equal Employment Opportunity Commission)

A federal agency that investigates discrimination complaints, attempts mediation, and may sue employers. Employees must file with the EEOC before suing.

Civil Rights Act of 1964 — Title VII

Prohibits employment discrimination based on:

• race

• color

• religion

• sex

• national origin

Applies to employers with 15+ employees.

Disparate Treatment

Intentional discrimination against a protected class.

Example: refusing to hire someone because of religion.

Disparate Impact

Neutral policy that unintentionally harms a protected group disproportionately.

Example: strength test excluding most women.

Bona Fide Occupational Qualification (BFOQ)

Allows discrimination when a characteristic is reasonably necessary to job performance. Allowed for sex, religion, or national origin—but never race.

Example: Hiring actors for gender specific roles.

Reasonable Accommodation

Employers must adjust workplace policies for religion or disability unless it creates undue hardship.

Examples:

schedule changes
assistive equipment
dress code exceptions

Defenses to Title VII Actions

Common employer defenses:

BFOQ

business necessity

seniority system

merit system

At-Will Employment

Employee can quit anytime; employer can fire anytime unless termination violates law or public policy.

Contract (Term) Employment

Employment for a specific time period. Employer is liable if the worker is fired early without cause.

Accountant Liability to Third Parties

Accountants may be liable to investors or lenders who rely on inaccurate financial statements caused by negligence or fraud.

Sarbanes-Oxley Act (SOX)

Strengthened corporate governance after accounting scandals. Requires internal controls, executive accountability, and auditor independence. Created the PCAOB.

GAAP

Generally Accepted Accounting Principles — standard rules companies must follow when preparing financial statements.

Business Email Compromise

Fraud scheme where criminals impersonate executives/vendors to trick employees into sending money or sensitive information.

Federal Sentencing Guidelines

Rules federal judges use to determine consistent criminal penalties for similar crimes.

4th Amendment Search Warrant Requirement

Police generally must obtain a warrant supported by probable cause before searching private property.

Exceptions to Search Warrant Requirement

Common exceptions:

consent
search incident to arrest
plain view doctrine
exigent circumstances
automobile exception

Grand Jury

Determines whether there is enough evidence to charge someone with a crime.

Petit Jury

Trial jury that determines guilt or innocence.

Burdens of Proof (highest → lowest)

Beyond a reasonable doubt → criminal conviction
Clear and convincing evidence
Preponderance of evidence → civil cases
Probable cause → arrest/search warrant
Reasonable suspicion → stop and frisk

Chapter 7 Bankruptcy

Liquidation bankruptcy — debtor’s assets are sold to pay creditors.

Chapter 11 Bankruptcy

Reorganization bankruptcy for businesses; the company continues operating while restructuring debt.

Chapter 13 Bankruptcy

Individual repayment plan lasting about 5 years using future income.

Debts NOT Discharged in Bankruptcy

Typically include:

student loans
child support
alimony
recent taxes
fraud debts

Environmental Protection Agency (EPA)

Federal agency enforcing environmental laws. Can impose civil fines and criminal penalties.

Clean Air Act

Requires EPA to set national air quality standards and requires states to create plans to meet them. Allows citizens to sue violators.

Clean Water Act

Regulates the discharge of pollutants into waterways and requires permits before releasing contaminants.

Oil Pollution Act

Makes companies responsible for cleanup costs and damages caused by oil spills.

Penalties for Violating Environmental Laws

May include:

civil fines
cleanup costs
criminal liability
possible imprisonment