Legal Environment of Business
Chapter Exam Questions
Course Introduction
The Legal Environment of Business introduces students to the laws and regulations that shape and govern the conduct of businesses, both domestically and internationally. The course examines fundamental legal principles, including contracts, torts, property rights, employment law, and ethical considerations, with a strong focus on how these issues affect decision-making and operations within organizations. Students will explore the structure and function of the court system, regulatory agencies, and dispute resolution methods, building an understanding of the broader legal context in which businesses operate. By the end of the course, learners will be equipped to identify, analyze, and navigate key legal risks and opportunities in the business environment.
Recommended Textbook Employment and Labor Law 8th Edition by Patrick
J. Cihon
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Q1) In the Alexander v.Gardner-Denver Company case,the Supreme Court established a critical distinction between:
A) unemployment compensation and disability compensation.
B) social security benefits and workers' compensation.
C) individual and collective employee rights.
D) collective and separate employee rights.
Answer: C
Q2) There should be set rules if there is a give and take policy between a labor union and corporate managers.The Act which provides these rules is the:
A) Social Security Act.
B) National Labor Relations Act.
C) Walsh-Healey Act.
D) Fair Labor Standards Act.
Answer: B
Q3) Explain the phenomenon of globalization.
Answer: Globalization is the integration of national economies into a worldwide economy,due to trade,investment,migration and information technology.
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Chapter 2: Employment Contracts And Wrongful Discharge
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Q1) The provision of Uniform Employment Termination Act deals with protection of employees from:
A) misdemeanors.
B) wrongful discharge.
C) government order.
D) court order.
Answer: B
Q2) The freedom of employees to quit the employment relationship is an important issue underlying which doctrine?
A) the express contract doctrine.
B) the employment-at-will doctrine.
C) in independent employee doctrine.
D) the legal doctrine of an implied employment.
Answer: B
Q3) An act that contains anti-retaliation provisions is:
A) the Equal wage Act.
B) the Civil Procedure Act.
C) the Gender Discrimination Act.
D) the Occupational Safety and Health Act.
Answer: D
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Chapter 3: Commonly Committed Workplace Torts
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Q1) Which of the following is a requirement to submit a claim to binding arbitration?
A) Fair Labor Standards Act Amendment 12
B) Equal Employment Opportunities Commission's Form 22-A
C) National Labor Relations Act preemption
D) North American Free Trade Agreement's Form 17-C
Answer: C
Q2) The imputation of crime,disease,and those affecting the plaintiff in his business,trade,profession,office or calling are commonly recognized forms of:
A) per se defamation.
B) strict liability.
C) absolute liability.
D) negligence.
Answer: A
Q3) Which tort is only recognized by a minority of jurisdictions?
A) libel
B) negligent infliction of emotional distress
C) intentional infliction of emotional distress
D) slander
Answer: B
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Chapter 4: Employee Privacy Rights In The 21st Century
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Q1) Communications between employers regarding a former/prospective employee typically are protected by:
A) statutory rule.
B) malice.
C) absolute privilege.
D) state rule.
Q2) Public employers,unquestionably,are state actors for the purposes of the __________ and ___________ Amendments' restrictions.
A) Fifth, Fourth
B) Fourth, Fourteenth
C) Fourteenth, Fifth
D) Fifth, Ninth
Q3) Discuss the origin of Employee Privacy Rights.
Q4) Justifiably suspecting a person,based on facts or circumstances,of inappropriate or criminal activities is termed:
A) a tort.
B) surveillance.
C) reasonable suspicion.
D) as a misdemeanor.
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Chapter 5: The Global Perspective: International
Employment Law And American Immigration Policy
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Q1) In Chamber of Commerce of U.S.v.Whiting,what act was examined?
A) Alien Tort Claims Act
B) Legal Arizona Workers Act
C) Torture Victim Protection Act
D) Immigration Reform and Control Act
Q2) Mohammad is an illegal immigrant from Pakistan,who has been part of the U.S.labor market since 1978.The act which is intended to clear illegal immigrants is the:
A) Immigration Reform and Control Act (IRCA) of 1986.
B) Torture Victim Protection Act of 1991.
C) Alien Tort Statute.
D) Foreign Labor Relations Act.
Q3) What is the role of the convention of Service Abroad of Judicial and Extrajudicial Documents in civil or commercial matters?
Q4) The federal statute which provides the cause of action for aggrieved noncitizen residents in the U.S.courts is:
A) National Labor Relations Act.
B) Alien Tort Claims Act.
C) Immigration Reform and Control Act.
D) Torture Victim Protection Act.
Page 7
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Chapter 6: Title Vii Of The Civil Rights Act And Race Discrimination
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Q1) Identify the case that focused on the issue of seniority under Title VII.
A) Lanning v.Southeastern Pennsylvania Transportation Authority
B) United States v.Nixon
C) Connecticut v.Teal
D) International Brotherhood of Teamsters v.United States
Q2) In University and Community College System of Nevada v.Farmer,in order to remedy the racial imbalance,the University of Nevada instituted the:
A) minority bonus policy.
B) Wonderlic Personnel Test.
C) Bennett Comprehension Test.
D) Negative Role Model policy.
Q3) Explain the four-fifths rule.
Q4) How is seniority defined under Title VII?
Q5) Who does Title VII of the Civil Rights Act of 1991 cover?
Q6) In EEOC v.Dial Corp.,after the Work Tolerance Screen (WTS) was adopted:
A) the percentage of new female hires declined.
B) the percentage of new female hires significantly increased.
C) the percentage of new hires from minority groups declined.
D) the percentage of new male hires significantly declined.
Q7) Write a short note on retaliation under Title VII. Page 8
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Chapter 7: Gender And Family Issues: Title Vii And Other Legislation
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Q1) Which of the following prohibits advertising for male or female employees in help-wanted notices (apart from a few exceptions) or maintaining separate seniority lists for male and female employees?
A) Bona fide occupational qualification (BFOQ)
B) Section 703
C) Equal Pay Act
D) The Bennett Amendment
Q2) In County of Washington v.Gunther,the Supreme Court held that ___________ incorporates the defenses of the Equal Pay Act into Title VII.
A) affirmative action
B) the Bennett Amendment
C) wrongful discharge
D) the Executive Order
Q3) What is the provision relating to pregnant women working in hazardous condition?
Q4) The Equal Pay Act's coverage is similar to that of the:
A) National Labor Relation Act.
B) Pregnancy Discrimination Act.
C) Fair Labor Standards Act.
D) Occupational Safety and Health Act.
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Chapter 8: Discrimination Based On Religion And National
Origin & Procedures Under
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Q1) Section 702(a) provides an exception under Title VII to all:
A) religious associations.
B) non-profit institutes.
C) corporate houses.
D) international organizations.
Q2) Identify the case in which the Court of Appeals held that the employer had committed an unlawful employment practice under Section 703(a) (1) of the Act.
A) Trans World Airlines v.Harry
B) Atkinson Airlines v.Hudson
C) Starbucks Airlines v.Hardsen
D) Trans World Airlines v.Hardison
Q3) What is discrimination based on national origin?
Q4) The Civil Rights Act of 1991 amended Title VII to allow recovery of punitive damages in cases in which the employer has engaged in:
A) discrimination based on creed.
B) discrimination based on third party information.
C) religious discrimination.
D) racial discrimination.
Q5) Explain ministerial exemption within the context of Title VII.
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Chapter 9: Discrimination Based on Age
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Q1) When the plaintiff has established a prima facie case of age discrimination,the Age Discrimination in Employment Act (ADEA) provides some specific exemptions,such as:
A) action pursuant to monetary benefits.
B) employers' right to use their discretion in firing or hiring employees.
C) immunity from suits by private individual.
D) actions pursuant to a bona fide seniority system.
Q2) Carl is working as a ground staff for Ramset airlines since five years and his employer refused to complete his annual appraisal since he was over fifty years of age.He filed suit alleging violation under Age Discrimination in Employment Act.The court decided in favor of Carl and also ordered for remedies such as:
A) back pay.
B) liquidated damages and legal fees.
C) increment of salary.
D) reinstatement.
Q3) What is meant by "reasonable factors other than age"? Give an example of how this might help employers?
Q4) How is the Age Discrimination in Employment Act enforced and administered?
Q5) What are the provisions of the Age Discrimination in Employment Act?
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Chapter 10: Discrimination Based On Disability
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Q1) Duke was an employee at General Vehicles Company.He had a problem with alcohol and often remained absent from work.The company decided to terminate him from employment after confirming their suspicions,but without providing a warning or any suggestion to undergo rehabilitation.In this case,the company violated ADA and Rehabilitation Act,which failed to:
A) a proper medical test.
B) make reasonable accommodation.
C) establish the connection between alcoholism and productivity.
D) make any further investigation.
Q2) The Americans with Disabilities Act (ADA) applies to all of the following individuals or groups except:
A)House of Representatives.
B) U.S.employers operating abroad or controlling foreign corporations.
C) Federal government employers.
D) private and public sector employers with fifteen or more employees.
Q3) What is the procedure to claim remedies under the ADA?
Q4) What are the defenses available under the ADA?
Q5) What does Section 501 of the Rehabilitation Act deal with?
Q6) What is the constitutional validity of drug testing by public sector employment?
Q7) What is the consequence for failure to make reasonable accommodation?
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Chapter 11: Other Eeo And Employment Legislation: Federal
And State Laws
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Q1) The laws that allow employees to bring firearms onto their employer's property were challenged by a number of employers on the grounds that requiring employers to allow guns on their property would violate the employers' general duty under the _____ to provide a safe workplace.
A) Section 201-d of the New York State Labor Law
B) Federal Mine Health and Safety Act
C) Civil Rights Act
D) federal Occupational Safety and Health Act (OSHA)
Q2) What are remedial affirmative action plans?
Q3) The prohibitions of _____ extend to the deprivation of any rights guaranteed by the Constitution or by law.
A) Section 1981 (a) of the Civil Rights Act of 1991
B) Section 1981 (b) of the Civil Rights Act of 1991
C) Section 1983 of 42 U.S.C.
D) Section 1985 of 42 U.S.C.
Q4) Briefly explain the Uniformed Services Employment and Reemployment Rights Act.
Q5) What is the responsibility of the federal Office of Special Counsel?
Q7) What are the requirements of strict scrutiny test? Page 14
Q6) What reasons allow employers not to reinstate employees after their military service?
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Page 15
Chapter 12: The Rise Of Organized Labor And Its Regulatory Framework
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Q1) Section 3 of the Norris-La Guardia Act declares that _____ are contrary to public policy of the United States.
A) ex parte proceedings
B) union boycotts
C) yellow-dog contracts
D) collective bargaining efforts
Q2) In June 1934,President Roosevelt formulated _____,which authorized the President to establish a board or boards empowered to investigate disputes arising under Section 7(a) of the NIRA and to conduct secret ballot representation elections among employees.
A) the National Labor Board
B) the New Deal
C) Public Resolution No.44
D) the Bipartite Agreement
Q3) In National Labor Relations Board v.Kentucky River Community Care,Inc.the lower court's judgment was:
A) remanded.
B) dismissed.
C) reversed.
D) upheld.
Page 16
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Chapter 13: The Unionization Process
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Q1) Where a company employs temporary workers supplied by a personnel staffing agency in addition to its own employees,the NLRB will only include the temporary workers in a bargaining unit with the firm's employees if both the employer and the staffing agency agree to the multiemployer bargaining unit,according to:
A) Packard Motor Car v.NLRB.
B) Oakwood Care Center.
C) American Hospital Association v.NLRB.
D) Bro-Tech Corp.v.NLRB.
Q2) Economic strikers who have been permanently replaced may vote only in elections held within _____ after the strike begins.
A) six months
B) nine months
C) twelve months
D) eighteen months
Q3) While determining the bargaining agent,on what grounds the can the Board decision be appealed in Washington?
Q4) Explain the two exceptions of contract bar rule.
Q5) Explain the second exception under contract bar rule.
Q6) What happens if the union loses the election due to employer's illegal actions?
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Chapter 14: Unfair Labor Practices By Employers And Unions
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Q1) When should an employer conduct a poll?
Q2) As remedy for violation of Section 8(a)(2),the NLRB may order the employer:
A) to cease recognizing the union.
B) not to cancel any agreements reached with the union.
C) give support or assistance to the union.
D) not to disband an in-house or captive union.
Q3) In the matter of verifying the union's claim to have the majority,the NLRB requires that the employer have a _____ about a union's claim of majority support in order to conduct a poll of employees regarding their support of a union.
A) discretionary trust
B) good consideration
C) good faith reasonable doubt
D) due care
Q4) Strikes in which the union selectively strikes in just one firm in the industry are known as:
A) economic strikes.
B) whipsaw strikes.
C) unfair labor practice strikes.
D) local union strikes.
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Chapter 15: Collective Bargaining
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Q1) What are the procedural requirements under Section 8(d) of the National Labor Relations Act?
Q2) Section 8 (d) of the National Labor Relations Act (NLRA) states that,the obligation of the employer and the bargaining representative is to meet at and confer in good faith with respect to:
A) establishment of a trade union.
B) wages, hours, and other terms and conditions of the employment.
C) establishment of a business unit.
D) reappointment of a bargaining representative.
Q3) Which of the following statements is not true of the NLRA's approach to the duty to bargain?
A) The act imposes an obligation to bargain collectively upon the union.
B) The act allows the employer to refuse to bargain with the bargaining unit.
C) The act does not control the results of the bargaining process.
D) The act does not compel either party to agree to a proposal or require the making of a concession.
Q4) What does Section 8(d) of the National Labor Relations Act state with respect to duty of bargain?
Q5) Define mass layoffs.
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Chapter 16: Picketing And Strikes
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Q1) The labor union of Consolidated Iron and Steel Company,despite its illegal status,organized a picketing against the company demanding assigning of work to them.Such picketing is prohibited under: _____ of the NLRA.
A) Section 9(c)(1)
B) Ordinance no.7
C) Section 8(b)(4)(D)
D) Article 8 (b)(4)(ii)(b)
Q2) What is primary picketing?
Q3) Consumer picketing is also known as:
A) product picketing.
B) union picketing.
C) in situs picketing.
D) organizational picketing.
Q4) _____ requires that the Board seek an injunction against the picketing when a complaint alleging a violation of Section 8(b)(4)(D) is filed.
A) Section 7(a)
B) Section 9(a)
C) Section 10(l)
D) Section 8(a)(4)
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Chapter 17: The Enforcement And Administration Of The Collective Agreement
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Q1) In Alexander v.Gardner Denver Co.,the Supreme Court held that an employee who had lost in arbitration under the collective agreement was still able to bring a Title VII suit in court,stating that:
A) an order to arbitrate the grievance should not be denied unless it is denied with a positive assurance.
B) the arbitration clause of a collective agreement must contain a "clear and unmistakable waiver" of the individual employee's rights.
C) employee's rights under the collective agreement were distinct from the employee's statutory rights under Title VII.
D) it is the role of the courts, not that of the arbitrators, to resolve questions of whether a grievance is subject to arbitration.
Q2) What conditions should be met by an employer petitioning for bankruptcy protection to reject the collective agreement?
Q3) Under which Section of the National Labor Relations Act are an employer and the union labor allowed to institute a suit for contractual violations?
Q4) Who can file grievances under the collective agreement?
Q5) How does an arbitration clause affect the right of individual employees?
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Chapter 18: The Rights Of Union Members
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Q1) How is the duty of fair representation enforced?
Q2) Ronald Heatherman,a union officer at Devon Mining Company Inc.,finds that a few union members along with the union leader are misusing the union funds.Ronald decides to take reasonable action against the union leader and other union members.Under which act can Ronald take action to safeguard union funds?
A) Equal Employment Opportunity Act
B) Occupational Safety and Health Act
C) Federal Labor Relations Act
D) Labor Management Reporting and Disclosure Act
Q3) The duty of fair representation is a judicially created obligation on the part of the union to represent fairly all employees in the:
A) arbitral tribunal.
B) illegal strike.
C) legal proceeding.
D) bargaining unit.
Q4) What is an agency shop?
Q5) Discuss the list of unfair labor practices that was added to the National Labor Relation Act by the Taft-Hartley Act.
Q6) What is the duty of fair representation on part of the union?
Page 22
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Chapter 19: Public Sector Labor Relations
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Q1) In National Treasury Employees Union v.Michael Chertoff,Secretary,United States Department of Homeland Security,the Supreme Court of Wisconsin recognized that both the Federal and State Constitutions protect freedom of speech and the right to petition the government,but noted that these rights:
A) may be abridged in case it will bring about the substantive evils that the legislature has a right to prevent.
B)may not be abridged in case it will bring about the substantive evils that the legislature has a right to prevent.
C) may be abridged in its discretion even if legislature has the right to prevent.
D) may be abridged in case the Supreme Court permits; even if legislature has the right to prevent.
Q2) If an impasse is not resolved under mediation of the Federal Mediation and Conciliation Service (FMCA),either parties may request that the _____ consider the dispute.
A) Federal Labor Relations Authority
B) Fair Labor Standards Board
C) National Labor Relations Board
D) Federal Service Impasse Panel
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Page 23
Chapter 20: Occupational Safety And Health
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Q1) Which of the following is not an option for a compliance officer in the event of an employer refusing entry for inspection?
A) The compliance officer must terminate the inspection.
B) An indictment warrant issued by a U.S.district judge should be produced.
C) The inspection has to be confined to those areas where no objection has been raised.
D) An ex parte application for an inspection warrant may be obtained.
Q2) In Marshall v.Barlow's Inc.,the Supreme Court held that an employer subject to an OSHA inspection may insist upon a(n):
A) search warrant.
B) injunction.
C) court order.
D) indictment document.
Q3) When it comes to worker violence or threats of violence,employers have adopted the policies of:
A) compensation.
B) zero-tolerance.
C) compromise.
D) feasibility.
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Chapter 21: The employee s safety nets: unemployment
and workers compensation social security and retirement plans
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Q1) What is the purpose of Federal Employment Liability Act (FELA)?
Q2) What is the main purpose of Social Security?
Q3) Define willful misconduct.
Q4) The fiduciary duties and conduct standards apply to any employee benefit plan established or maintained by an employer or in an industry or activity engaged in or affecting:
A) interstate commerce.
B) health care.
C) internal security.
D) international trade.
Q5) The Federal Employment Liability Act is a federal law designed to protect and compensate the injured:
A) disabled workers.
B) railroad workers.
C) war veterans.
D) minors in employment.
Q6) Explain the concept of a fiduciary.
Q7) Which are the two enactments that predated the National Labor Relations Act and Page 25
Q8) What are the three major benefits that fall under the Social Security system?
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Chapter 22: The fair labor standards act
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Q1) Which of the following is not a condition for administrative employees to be exempt from overtime and minimum wage requirements under the FLSA?
A) Employee is compensated with a salary of not less than $455 per week.
B) The primary duty is the performance of office work directly related to the management.
C) The primary duty does not include general business operations with the firm's customers.
D) Her/his primary duty includes the exercise of discretion
Q2) Which of the following is not a basis for coverage under the FLSA?
A) Employees employed in an "enterprise engaged in" interstate commerce.
B) Employees who are engaged in interstate commerce.
C) Employees who are engaged in the production of goods for interstate commerce.
D) Employees who are engaged in interstate commerce, but not including import and export.
Q3) What was impact of the first federal law against child labor?
Q4) Can employees file a suit to recover back wages and overtime pay? If so,what are the limitations for FLSA violations?
Q5) Explain the term "workweek".
Q6) What remedies can an employee seek under the Fair Labor Standards Act?
Page 27
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