Employment Law for Managers
Exam Answer Key
Course Introduction
This course provides managers with a comprehensive understanding of the legal principles governing the employer-employee relationship. Key topics include hiring practices, wage and hour laws, workplace health and safety, discrimination and harassment, employee discipline, termination procedures, and the basics of labor relations. Through real-world case studies and practical scenarios, the course empowers managers to navigate complex legal situations within the workplace, mitigate risks, ensure regulatory compliance, and foster a fair and productive work environment.
Recommended Textbook Managers and the Legal Environment Strategies for the 21st Century 6th Edition by Constance E.
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25 Chapters
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Page 2
Chapter 1: law, value creation, and risk management
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Sample Questions
Q1) Discuss ways in which laws and regulations promote economic growth.
Answer: Laws and regulations promote economic growth by protecting private property rights; enforcing private agreements; allocating risks; facilitating the raising of capital; creating incentives to innovate; promoting liquid and skilled labor markets; providing subsidies,tax incentives,and infrastructure; and promoting free trade in global markets.
Q2) Which of the following is a type of relationship building lobbying prevalent in China?
A)Xantu
B)Olaying
C)Guanxi
D)Quinta
Answer: C
Q3) As used in the text,the term "legal astuteness" refers to the ability of a manager to avoid situations making consultation with legal counsel necessary.
A)True
B)False
Answer: False
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Chapter 2: Ethics ant the law
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Sample Questions
Q1) Companies may post audits of foreign factories on the Fair Labor Association website.
A)True
B)False
Answer: True
Q2) Which of the following is a federal law passed in 2002 in an attempt to reduce corporate wrongdoing?
A)The Jones-Whaley Act
B)The Glover-Laughlin Act
C)The Sarbanes-Oxley Act
D)The Corporate Reduction and Ethics Act
Answer: C
Q3) Which of the following is a term for a stock option that has a strike price less than the underlying stock's fair market value on the date of the grant?
A)A price saver option
B)An accepted option
C)An in the money option
D)A true option
Answer: C
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Page 4
Chapter 3: Courts, sources of law, and dispute resolution
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Sample Questions
Q1) Refer to fact pattern 3-2.What would you tell Sally regarding her request that you go with her,as her friend,to see her lawyer?
A)That you would be glad to do so because you want to provide emotional support.
B)That you should not go because your presence would destroy the attorney-client privilege.
C)That you should not go because your presence would destroy the work-product privilege.
D)That you should not go because your presence would destroy both the attorney-client privilege and the work-product privilege.
Answer: B
Q2) Standing means that the party seeking relief
A)is the proper party to advance the litigation
B)has a personal interest in the outcome of the suit
C)will benefit from a favorable ruling
D)all of the responses are correct
Answer: D
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5
Chapter 4: Constitutional bases for business regulation
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Sample Questions
Q1) All powers not expressly given to the federal government in the Constitution rest with either the
A)States or the federal government
B)Federal government or the people
C)States or the people
D)None of the responses are correct
Q2) Under Article I,Section 8,Congress has the power to
A)declare war
B)spend to provide for the general welfare
C)regulate commerce among the states
D)all of the responses are correct
Q3) The Second Amendment to the U.S.Constitution grants persons the right to bear arms.
A)True
B)False
Q4) Under some circumstances a law passed by Congress may be valid even if it violates the U.S.Constitution.
A)True
B)False
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Chapter 5: Agency
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Sample Questions
Q1) Which of the following is not a factor that the courts will use in determining whether or not an act of an employee was within the scope of employment?
A)Whether the employee's act was authorized by the employer.
B)The length of employment.
C)Whether the employer furnished the instrumentality causing the injury.
D)Whether the employer had reason to know the employee would perform the act.
Q2) Under which of the following circumstances may an employer be liable for an employee's action outside the scope of employment?
A)The employer intended the employee's conduct or its consequences.
B)The employee's high rank in the company makes him or her the employer's alter ego.
C)The employee's action can be attributable to the employer's own negligence or recklessness.
D)All of the responses are correct.
Q3) The most common form of agency relationship is employer-employee.
A)True
B)False
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Chapter 6: Administrative Law
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Sample Questions
Q1) An administrative agency can adopt rules that go beyond the authority granted by Congress.
A)True
B)False
Q2) Which of the following is true regarding review of agency procedures?
A)Agency procedures are not required to conform to the requirements of the Due Process Clause.
B)Federal courts set agency procedures.
C)A court may require that an agency comply with its own procedural rules.
D)Both that federal courts set agency procedures and that a court may require that an agency comply with its own procedural rules.
Q3) A rule made by a federal agency is not final until approved by Congress.
A)True
B)False
Q4) The Fifth Amendment's protection against self-incrimination applies to all records including all those that the government requires to be kept.
A)True
B)False
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Chapter 7: Contracts
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Sample Questions
Q1) Expectation damages give the plaintiff the benefit of its bargain,putting the plaintiff in the cash position it would have been in if the contract had been fulfilled.
A)True
B)False
Q2) Refer to fact pattern 7-2.Which of the following is true regarding the offer to Frank assuming Hester's revocation was ineffective?
A)It was probably still open the next day because a reasonable length of time would not have expired.
B)It would have terminated because Frank did not provide any consideration to leave it open.
C)By operation of law,it would have terminated at midnight on the day it was made.
D)By operation of law,it would still have been open because it would not have terminated until midnight on the day after it was made.
Q3) A counteroffer does not terminate the original offer.
A)True
B)False
Q4) Define the term "consideration" as it is used in contract law.
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Chapter 8: sales, licensing, and e-commerce
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Sample Questions
Q1) An express warranty is an explicit guarantee by the seller that the goods will never be defective.
A)True
B)False
Q2) A contract is ________ when one party is induced to enter a contract without having any meaningful choice.
A)substantively unconscionable
B)procedurally unconscionable
C)procedurally impracticable
D)substantively impracticable
Q3) Explain the different types of warranties that exist under the UCC.
Q4) Most international sales of goods are governed by the Convention on Contracts for the International Sale of Goods.
A)True
B)False
Q5) Sellers can rely on the UCC doctrine of commercial impracticability to get them out of a bad bargain
A)True
B)False
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Chapter 9: Torts and Privacy protection
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Sample Questions
Q1) Refer to fact pattern 9-3.What would you tell Alex regarding whether he should sue Alex for committing a battery?
A)That it appears that the necessary elements are present for him to succeed in an action against Blake for battery so long as he can show apprehension of being struck.
B)That he could not win in an action for battery because he admitted that he was not afraid.
C)That he could not win in an action for battery because Blake did not actually strike him.
D)That he could not win in an action for battery because it appears that Blake's actions were justified.
Q2) Trespass may occur below the surface of land.
A)True
B)False
Q3) Intent cannot be implied.
A)True
B)False
Q4) What are the requirements for the application of res ipsa loquitur?
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11
Chapter 10: product liability
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Sample Questions
Q1) If the societal value of an inherently dangerous product outweighs the risk of harm from its use,it is known as a(n)________ product.
A)state-of-the-art
B)unavoidably unsafe
C)obvious risk
D)abnormal
Q2) Foreign governments have filed lawsuits against the tobacco industry.
A)True
B)False
Q3) Set forth the elements of a strict liability claim.
Q4) A court is not bound by the Restatement's formulation of product liability law.
A)True
B)False
Q5) Under the doctrine of comparative fault,the plaintiff's damages may be reduced by the degree to which his or her own negligence contributed to the injury.
A)True
B)False
Q6) What are the four basic parts of the rationale for strict product liability?
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Chapter 11: Intellectual property
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Sample Questions
Q1) Refer to fact pattern 11-1.Assuming the validity of the earlier patent,which of the following is true regarding Samantha's rights to legally continue selling the combs?
A)She should stop selling the combs immediately.
B)She may continue selling the combs until she sells the rest of her inventory,but she must then stop.
C)Since she was not aware of the earlier patent when she started marketing her combs,she can continue to sell the combs indefinitely without providing any royalties to the holder of the initial patent.
D)Since she was not aware of the earlier patent when she started marketing her combs,she can continue to sell the combs indefinitely but she must pay reasonable royalties to the holder of the initial patent.
Q2) Which of the following is not true regarding current U.S.copyright law?
A)The material must be sufficiently original.
B)Protection is automatic.
C)Use of a copyright notice is required.
D)Registration is not required.
Q3) Explain in detail the process for obtaining a patent.
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Page 13
Chapter 12: The employment agreement
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Sample Questions
Q1) States vary in their willingness to enforce noncompete agreements.
A)True
B)False
Q2) Federal law prohibits drug testing by private employers unless a substantial need for the testing can be shown.
A)True
B)False
Q3) Union contracts almost universally require just cause for employee termination.
A)True
B)False
Q4) What type of statutes protect employees who report illegal activities going on within their company?
A)Reporting statutes.
B)Revealing statutes.
C)Discovery statutes.
D)Whistleblower statutes.
Q5) OSHA has safety requirements but no requirements regarding recordkeeping.
A)True
B)False
Q6) Explain the concept of retaliatory discharge.
Page 14
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Chapter 13: civil rights and employment discrimination
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Sample Questions
Q1) In a job application for employment,a weight requirement may be valid if its purpose can be justified as a ________ by the employer.
A)non disparate treatment
B)non disparate impact
C)BFOQ
D)Section 1981 requirement
Q2) A plaintiff claiming disparate impact discrimination based on sex must prove that the employer intentionally discriminated against him or her by denying a benefit or privilege of employment (such as a promotion or pay raise)based upon the individual's sex.
A)True
B)False
Q3) It is not necessary to prove intentional discrimination to prevail in a disparate impact case.
A)True
B)False
Q4) Set forth the categories of individuals classified as disabled under the Americans with Disabilities Act.
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Chapter 14: executive compensation and employee benefits
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Sample Questions
Q1) The exercise of a(n)________ stock option generally entitles a company get to take a deduction from its earnings without further considerations.
A)nonqualified
B)incentive
C)both nonqualified and incentive
D)neither nonqualified nor incentive
Q2) The U.S.courts of appeals are split on the issue of whether an ERISA fiduciary has an affirmative duty to disclose proposed changes in benefits in the absence of employee inquiries.
A)True
B)False
Q3) What are the principal federal act(s)regulating securities transactions and issuers?
A)The Transactions Act of 1999.
B)The Stock Issuance Act of 1934.
C)Both the Transactions Act of 1999 and the Stock Issuance Act of 1934.
D)Neither the Transactions Act of 1999 nor the Stock Issuance Act of 1934.
Q4) What do you believe should be done to provide health insurance in this country? What problems exist,and how should they be remedied? Discuss fully.
Page 16
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Chapter 15: Criminal law
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Sample Questions
Q1) Which of the following is not an exception to the warrant requirement for a lawful search?
A)A search when the owner or a person who appears to have authority voluntarily and intelligently consents to the search.
B)A search of a residence if there is probable cause to believe evidence of a crime will be found.
C)Anything discovered by police in plain view if the officers are legitimately on the premises.
D)A stop and frisk of a suspect if the officer reasonably believes the suspect is dangerous.
Q2) The Fifth Amendment protects citizens from involuntary self-incrimination.Discuss the application of this constitutional protection in the following areas: a statement made by a defendant in custody who has not been informed of his or her constitutional right to remain silent and to have counsel present,a blood sample given by a defendant,a handwriting sample given a defendant,required participation in a lineup.Explain transactional and use immunity.How does each affect a person's right not to testify under oath? Discuss fully.
Q3) List six of the major exceptions to the requirement for a search warrant.Discuss fully.
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Chapter 16: Environmental law
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Sample Questions
Q1) The principal goal of the Clean Water act is to eliminate the discharge of pollutants into the non-navigable waters of the United States.
A)True
B)False
Q2) Explain what the Solid Waste Disposal Act as amended by the Resource Conservation and Recovery Act (RCRA)authorizes the EPA to do.
Q3) A fundamental element of the U.S.scheme of pollution control is the policy that the polluter pays.
A)True
B)False
Q4) State environmental laws may not be more stringent than federal laws.
A)True
B)False
Q5) Discuss state environmental laws and how the EPA interacts with states that have environmental laws.
Q6) Set forth the Clean Air Act's four types of air quality goals.
Q7) The EPA is a cabinet-level department
A)True
B)False
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Chapter 17: Antitrust
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Sample Questions
Q1) Horizontal agreements among competitors not to compete on nonprice matters cannot be a violation of Section 1 of the Sherman Act.
A)True
B)False
Q2) Section 2 of the Sherman Act prohibits
A)price discrimination.
B)monopolies and attempts to monopolize.
C)every contract,combination or conspiracy in restraint of trade.
D)mergers that threaten competition.
Q3) Vertical agreements may reduce _________ competition.
A)Interbrand
B)Intrabrand
C)monopolistic
D)illegal
Q4) Many countries do not have the equivalent of our anti-trust laws.Does vigorous enforcement of American anti-trust laws put American companies at a disadvantage in the global marketplace? Should changes in the law or in its enforcement be made to reflect the emerging global economy? Discuss fully.
Q5) What types of price-fixing agreements are considered horizontal price-fixing?
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Chapter 18: Consumer Protection
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Sample
Questions
Q1) The Fair Credit Reporting Act does not give consumers a right to have corrected copies of their credit reports sent to creditors.
A)True
B)False
Q2) The Federal Trade Commission has ________commissioners who serve for _______-year terms.
A)seven,four
B)ten,five
C)six,six
D)five,seven
Q3) The _________ requires financial institutions to provide privacy protections to consumers.
A)Privacy Protection Act
B)Smith-Davis Financial Institutions Act
C)Glover Privacy in Action Act
D)None of the responses are correct.
Q4) The U.S.Supreme Court has ruled that compounded drugs are illegal.
A)True
B)False
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Chapter 19: real property and land use
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Sample Questions
Q1) Title insurance protects the buyer of property against undisclosed liens.
A)True
B)False
Q2) All tenants in common have an equal right to possession of the property.
A)True
B)False
Q3) John owns a 20-acre parcel of land in Smallville.Bob is a developer that wants to build a subdivision in Smallville.He offers John $1,000 for a 30-day option to purchase the land for $1 million.John agrees.Clara is John's sister and has a valid right of first refusal on the same land.Bob has been told by his bank that the bank will provide a construction loan for the development.What rights did Bob legally obtain when he purchased his option? What effect will Clara's rights have on Bob's option? Explain the three types of loans-construction,gap,and take-financing-that could be involved to complete the development.Discuss fully.
Q4) A warranty of habitability applies to subsequent sellers as well as to the original builder.
A)True
B)False
Q5) What must a person do to acquire a parcel of land by adverse possession?
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Chapter 20: Forms of business organizations
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Sample Questions
Q1) States may not impose a higher fiduciary duty upon partners than that set forth in the Revised Uniform Partnership Act.
A)True
B)False
Q2) Small corporations can avoid double taxation by electing to be treated as a(n)
A)C corporation
B)S corporation
C)Close corporation
D)LLC.
Q3) Which of the following is false regarding decision making in a partnership?
A)Each partner's assets are vulnerable to the poor business decisions of the fellow partners.
B)A partnership is prohibited from placing managerial control of the business in one partner.
C)Unless the partners expressly agree otherwise,partnership law requires unanimous agreement of all partners on all but the most ordinary matters.
D)If the partners in an informal partnership cannot agree on a decision,they may disband the partnership,distribute its assets,and terminate it.
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22
Chapter 21: Directors, Officers, and Controlling Shareholders
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Sample Questions
Q1) The courts have held that officers and directors that usurp a corporate opportunity must disgorge the illegal profits to the A)individual shareholders. B)courts.
C)majority shareholder. D)corporation.
Q2) Breakup fees are liquidated damages for a terminated proxy fight.
A)True
B)False
Q3) In evaluating a buyout proposal,the directors should consider material nonprice provisions of the proposed agreement.
A)True
B)False
Q4) Once a sale or breakup of the corporation is inevitable,directors have a fiduciary duty to prevent a freeze out of the shareholders.
A)True
B)False
Q5) What are the seven key factors that directors should consider in deciding whether to sell a company?
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Chapter 22: Public and Private Offerings of Securities
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Sample Questions
Q1) Which of the following securities is not listed as exempt securities under Section 3 of the 1933 Act?
A)Any security issued by the United States or any state of the United States.
B)Any security issued or guaranteed by any national bank.
C)Any security issued by a charitable organization.
D)Any security issued by any person other than an issuer,underwriter or dealer.
Q2) Do you believe that the securities rules that are in place are sufficient to protect investors? Why or why not? Discuss fully.
Q3) The Securities Act of 1933 requires promoters of securities offerings to register them with the Treasury Department.
A)True
B)False
Q4) Explain the scope and purpose of Section 11 of the Securities Act of 1933 regarding misleading registration statements.What is the basis for liability regarding the state of mind required?
Q5) When have courts found a general partnership interest to be a security?
Q6) The bespeaks caution doctrine has been adopted by all courts.
A)True
B)False
Page 24
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Chapter 23: Securities Fraud and insider trading
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Sample Questions
Q1) A controlling shareholder is traditionally considered an insider.
A)True
B)False
Q2) Which of the following is true regarding the state of mind needed in order to find a violation of Section 16(b)involving short-swing trading?
A)Liability is imposed under Section 16(b)regardless of the insider's state of mind.
B)Intent to violate the securities laws must be found in order for there to be a violation of Section 16(b).
C)A trader must at least act without caution in order to be found liable for violating Section 16(b).
D)A trader must at least act negligently in order to be found liable for violating Section 16(b).
Q3) Under the London Stock Exchange rules,if a listed company's share price moves significantly on the basis of rumor and the rumor is true,the company must disclose the existence of the rumored event.
A)True
B)False
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Chapter 24: Debtor-Creditor Relations and Bankruptcy
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Sample Questions
Q1) Payments in the ordinary course of business made within 90 days prior to a Chapter 11 bankruptcy filing are voidable as a preference.
A)True
B)False
Q2) Explain the scope and purpose of Article 9 of the UCC.Define the terms security interest,dragnet clause,and perfection.What are the methods of perfecting a security interest under Article 9?
Q3) Chapter 13 does not provide a bankruptcy discharge for corporations.
A)True
B)False
Q4) National banks acting as lenders are subject to state usury laws.
A)True
B)False
Q5) ________ a security interest means that it is made valid as against other creditors of the debtor.
A)Finalizing
B)Perfecting
C)Organizing
D)Signing
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Chapter 25: International Business
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Sample Questions
Q1) A multinational company must obey only the business transaction laws of its home country.
A)True
B)False
Q2) The principle of equity is unique to civil law legal systems.
A)True
B)False
Q3) The ________ provides for temporary relief to domestic industries seriously injured by increasing imports,regardless of whether unfair practices are involved.
A)fair trade law
B)import-relief law
C)duty free zone
D)foreign trade zone
Q4) The European Community is a purely economic organization consisting of 15 European states.
A)True
B)False
Q5) Describe differences between the U.S.and British common law systems.
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