Legal Environment of Business Exam Practice Tests
Course Introduction
Legal Environment of Business introduces students to the fundamental legal principles and frameworks that govern commercial activities. The course covers topics such as the structure of the legal system, sources of law, contracts, agency, sales, torts, intellectual property, employment law, and the regulatory environment affecting business operations. Students will explore how laws impact business decision-making, risk management, and strategic planning, while also developing an understanding of ethical and social responsibilities. By examining case studies and real-world scenarios, students gain practical insights into legal issues that entrepreneurs, managers, and professionals encounter in the modern business world.
Recommended Textbook
Employment and Labor Law 7th Edition by Patrick
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22 Chapters
1065 Verified Questions
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J. Cihon
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Q1) If Harry is acting as a neutral adjudicator in a settlement between James and Paul, then the settlement can be considered a(n):
A) whistleblowing practice.
B) arbitration.
C) election of remedies.
D) writ of certiorari.
Answer: B
Q2) What does the Racketeer Influenced and Corrupt Organizations Act (RICO) state?
Answer: RICO is a federal law designed to criminally penalize those who engage in illegal activities as part of an ongoing criminal organization.
Q3) In Gilmer v. Interstate/Johnson Lane Corporation case, Gilmer filed a charge with EEOC and brought suit in the District Court, alleging that he had been discharged in the violation of:
A) The Social Security Act (1935).
B) National Labor Relations Act (1935).
C) Civil Rights Act (1964).
D) Age Discrimination in Employment Act of (1967).
Answer: D
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Chapter 2: Employment Contracts and Wrongful Discharge
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Q1) Some employees have express contracts of employment, usually for a definite duration. Others fall within the coverage of a(n) ________________ negotiated for them by their union.
A) collective bargaining agreement
B) employment bargaining agreement.
C) cooperative bargaining agreement
D) negotiable agreement
Answer: A
Q2) The law which is created by judges opposed to statutes and legislation for the equity, justice and conscious is called:
A) common law.
B) codified law.
C) statutory law.
D) ordinance.
Answer: A
Q3) What is employment-at-will?
Answer: A kind of employment wherein both the employee and the employer are free to unilaterally terminate the relationship at any time and for any legally permissible reason, or for no reason at all.
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Page 4
Chapter 3: Commonly Committed Workplace Torts
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Q1) In the Ingraham v. Ortho-McNeil Pharmaceutical case, the employer was found not guilty of:
A) intentional infliction of emotional distress.
B) negligent infliction of emotional distress.
C) tortious interference with contract.
D) defamation.
Answer: A
Q2) What is a tort and how it is applicable in employer-employee relationships?
Answer: The word tort means a civil wrong not based upon a preexisting contractual relationship. By and large, tort law is the law of personal injury. Its application to employer-employee relationship is affected by workers' compensation insurance, which immunizes the employer from some tort liabilities.
Q3) Which of these forms of invasion of privacy is closely related to the tort of defamation?
A) invasion of plaintiff's solitude
B) intrusion into plaintiff's private affairs
C) portraying plaintiff in a false light
D) appropriating plaintiff's name or likeness
Answer: C
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Page 5
Chapter 4: Employee Privacy Rights in the 21st Century
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Q1) The Supreme Court for the first time expressly acknowledged a right of privacy implicit in the Constitution in the case of:
A) Quon v. Arch Wireless Operating Co., Inc.
B) Williams v. City of Tulsa.
C) Griswold v. Connecticut.
D) Massey v. Roth.
Q2) The testing of human blood and/or urine for the presence of controlled/illegal substances is known as:
A) drug testing.
B) genetic testing.
C) reasonable suspicion.
D) mandatory testing.
Q3) What is the most common way in which employers intrude upon their employee's privacy?
Q4) What serious intrusion of employees' privacy has severe ethical implications?
Q5) In legal parlance, EAP stands for:
A) Employee Assistance Program.
B) Employee Assessment Program.
C) Employee Agreement Program.
D) Employee Arraignment Program.
6
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Chapter 5: The Global Perspective: International
Employment Law and American Immigration Policy
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Q1) The international trade union movement has begun to use the term _______________ as an umbrella designation.
A) labor unions
B) empathizer's unions
C) trade unions
D) global unions
Q2) In the context of international employment law, ____________ are the uniform codes of procedure and standards of conduct that the ILO seeks to promulgate and enforce in order to establish international standards for the fair treatment of workers among all member nations of the United Nations.
A) torts
B) conventions
C) mores.
D) remands
Q3) List the targets of the Union Network International (UNI).
Q4) What are conventions? Identify conventions that affect international labor relations and employments.
Q5) State the purpose of the Immigration Reform and Control Act (IRCA) of 1986.
Q6) What is the role of U.S. Citizenship and Immigration Services (USCIS)?
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Chapter 6: Title VII of the Civil Rights Act and Race Discrimination
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Q1) __________ compares the selection rates (the rates at which applicants meet the requirements or pass the test) for the various protected groups under Title VII.
A) Four-Fifths Rule
B) Bona fide occupational qualification
C) Criterion-related validity
D) Disparate treatment
Q2) The programs in employment that involve giving some kind of preference in hiring or promotion to qualified female or minority employees is a/an:
A) segregation treatment.
B) four-fifth's treatment.
C) affirmative action.
D) criterion-related activity.
Q3) The Supreme Court decision in Adarand Constructors, Inc. v. Pena held that government affirmative action programs must be justified under the strict scrutiny test and that the court would examine such justifications closely. Elucidate.
Q4) Who does Title VII of the Civil Rights Act of 1991 cover?
Q5) How is seniority defined under Title VII?
Q6) Described the practice of race norming.
Page 8
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Chapter 7: Gender and Family Issues: Title VII and Other Legislation
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Q1) Explain the leave provision under FMLA.
Q2) ____________ state(s) that employers are liable for sexual harassment by supervisory or managerial employees or co-workers and may also be liable for harassment by coworkers or even nonemployees under certain circumstances.
A) The National Labor Relation Board.
B) The Occupational Safety and Health Act.
C) EEOC guidelines
D) U.S. Constitution
Q3) Harassment where the employee's response to the harassment is considered in granting employment benefits is called:
A) hostile environment harassment.
B) mental harassment.
C) defamation.
D) quid pro quo harassment.
Q4) What are the conditions to receive family temporary disability insurance benefits?
Q5) What is gender discrimination?
Q6) Which state legislation provides pregnancy leave?
Q7) When should an employee give notice for leave under FMLA?
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Chapter 8: Discrimination Based on Religion and National
Origin Procedures Under Title VII
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Q1) What is the Lilly Ledbetter Fair Pay Act of 2009?
Q2) What are the two methods for a defendant to respond when a prima-facie case of disparate treatment has been established?
Q3) Write down the provision of section 703(g) of Title VII.
Q4) Unlike the National Labor Relations Act, Title VII does not give exclusive authority over employment discrimination issues to:
A) local governments.
B) state authorities.
C) employers.
D) the federal government.
Q5) A federal employee alleging employment discrimination must first consult with a(n):
A) Lilly Ledbetter Fair Pay Act counselor.
B) Disparate Treatment Claims counselor.
C) Equal Employment Opportunity (EEO) counselor within the employee's own agency.
D) National Labor Relations Board counselor.
Q6) Explain Immigration Reform and Control Act of 1986, and Discrimination Based on National Origin or Citizenship.
Page 10
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Chapter 9: Discrimination Based on Age
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Q1) Fifty-five year old Mark has worked with an organization for 20 years and was looking forward to his impending promotion. During his annual appraisal, his supervisor stated that he had "put in enough time" and suggested he step down from his post since most executive employees retired at the age fifty five. In this instance, Mark does not need to resign since:
A) he is physically fit to work.
B) under Age Discrimination in Employment Act mandatory retirement of such executives prior to sixty-five is still prohibited.
C) retirement will violate Americans with Disabilities Act.
D) it is mandatory for his organization to hand him the promotion considering his age and level of experience.
Q2) In Gilmer v. Interstate/Johnson Lane Corp the Supreme Court held that the securities broker should not litigate and is required to:
A) abide by the agreement.
B) submit his letter of resignation.
C) arbitrate.
D) award back pay.
Q3) What is bona fide seniority or benefit plan? What is its significance?
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Chapter 10: Discrimination Based on Disability
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Q1) In ______________________, the Supreme Court held that an individual who applies for Social Security disability benefits may still be a "qualified individual with a disability" within the meaning of the Americans with Disabilities Act (ADA).
A) Southeastern Community College v. Davis
B) Albertsons, Inc. v. Kirkingburg
C) Toyota Motor Manufacturing, Kentucky, Inc. v.Williams
D) Cleveland v. Policy Management Systems
Q2) Richard (plaintiff) tested positive for AIDS. He applied for a job at Gray Company (defendant), but was refused a job by the company due to his illness. He filed a lawsuit against the company by alleging violation of ADA. In this scenario, there is a strong possibility that the defendant may refuse to hire or accommodate an individual if:
A) the individual has any type of sexually transmitted illness.
B) that individual's condition poses a direct threat to the health of other workers.
C) the individual has tested positive for AIDS or any such communicable disease.
D) it can be established that Richard's illness would cause discomfort among the other employees.
Q3) What is the consequence for failure to make reasonable accommodation?
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Page 12
Chapter 11: Other Eeo and Employment Legislation: Federal and State Laws
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Q1) What are the exceptions under EPPA to allow polygraph testing?
Q2) Persons who are affected by alleged violations of the USERRA must file written complaints with the:
A) National Labor Relations Board.
B) Equal Employment Opportunity Commission.
C) National Federation of Labor Union.
D) federal Secretary of Labor.
Q3) Which of the following is not true regarding USERRA?
A) It covers both private and public sector employers.
B) It also covers the federal government.
C) It prohibits employers from discriminating against employees because of their service in the military.
D) It applies only to career military service.
Q4) Which one of the following state laws allows institutions of higher education to obtain background checks on applicants for security-sensitive positions?
A) Tennessee law
B) Indiana law
C) Texas law
D) Missouri law
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Chapter 12: The Rise of Organized Labor and Its Regulatory Framework
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Q1) 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
Q2) Briefly describe the National Labor Board.
Q3) What is the extent of jurisdiction of the NLRB?
Q4) In NLRB v. Meenan Oil Co., L.P., the National Labor Relations Board filed petitions for enforcement of its order finding against the defendant regarding violation of:
A) Section 9 (a) (2) of the National Labor Relations Act.
B) Sections 8 (a) (1) and (5) of the National Labor Relations Act.
C) Sections 7 (a) (1) and (5) of the National Labor Relations Act.
D) Section 21 of the National Labor Relations Act.
Q5) What role did the American Federation of Labor (AFL) play in the labor movement in the U.S.?
Q6) Explain antitrust laws.
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Chapter 13: The Unionization Process
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Q1) Stuart and Melvin were employees of ANZ Construction Company. They both sustained serious injuries while working and took a week off. The company awarded Stuart $500 as compensation, but nothing was awarded to Melvin. In this case, Melvin has the right to present his grievances to his employer without intervention of bargaining representative under the:
A) Taft-Hartley Act.
B) National Labor Relation Act.
C) Occupational Safety and Health Act.
D) Fair Labor Standards Act.
Q2) Define voluntary recognition.
Q3) What is the significance of Section 9 (e) (1) of the NLRA pertaining to election?
Q4) Under the NLRA, no petitions seeking a new representation or decertification election can be filed for bargaining unit of employees during the _____ period following the elections.
A) three- month
B) six-month
C) nine-month
D) twelve-month
Q5) Explain the two exceptions of contract bar rule.
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Chapter 14: Unfair Labor Practices by Employers and Unions
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Q1) Define super seniority in context of collective bargaining.
Q2) Which act defines unfair labor practices?
Q3) What are antiunion remarks?
Q4) In NLRB v. City Disposal Systems, the Court of Appeals concluded that the Brown's refusal was not a(n) _____ according to Section 7 of the NLRA.
A) concerted activity
B) protected activity
C) unfair labor practice
D) unlawful activity
Q5) In Electromation, Inc. v. NLRB, the NLRB ultimately found that Electromation violated Sections 8(a) (2) and (1) of the NLRA, through its establishment and administration of:
A) employer's commission.
B) action committees.
C) review committees.
D) employees' union.
Q6) What are the remedies for violation of Section 8(a) (2) of NLRA?
Q7) Apart from whipsaw strikes, what are the other reasons for engaging in multiemployer bargaining with union?
Page 16
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Chapter 15: Collective Bargaining
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Questions
Q1) In Emporium Capwell Co. v. Western Addition Community Organization, Hollins and Hawkins were minority employees. The Western Addition Community Organization filed a charge against the company with National Labor Relations Board (NLRB). The trial examiner of the NLRB concluded that their activity was not protected by Section 7 of the Act and that their discharges did not, therefore, violate _____ of the NLRA.
A) Section 9(a)
B) Section 8(b)(3)
C) Section 8(a)(1)
D) Section 8(a)
Q2) In J. I. Case Co. v. NLRB, the Supreme Court held that contracts of employment made with ? individual employees were _____ to negotiating a collective agreement with the union.
A) ex parte agreements
B) mandatory
C) not impediments
D) yellow-dog contracts
Q3) What does Section 8(d) of the National Labor Relations Act state with respect to duty of bargain?
Q4) What are mandatory bargaining subjects?
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Chapter 16: Picketing and Strikes
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Q1) In International Union of Operating Engineers, the Board found that all of the following actions by the union constituted unfair labor practices, except:
A) picketing at neutral gates.
B) distributing pamphlets encouraging employees of neutral employers to stay out of work.
C) barring union members from working on a job where a strike has been called.
D) bringing internal charges against members employed by a neutral employer.
Q2) An union must give a written notice of any strike, picketing, or any other concerted refusal to work against any health-care institution at least ten days prior to the beginning of the strike or picketing. This provision is outlined under Section 8 (g) of the:
A) Norris-Guardia Act.
B) Occupational Safety and Health Act.
C) Fair Labor Standards Act.
D) National Labors Relation Act.
Q3) What is common situs picketing?
Q4) Discuss the NLRA provisions regarding picketing or refusal to work against any health-care institution.
Q5) What is the right of an employer under Section 8(b)(7)(C) related to picketing?
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Chapter 17: The Enforcement and Administration of the Collective Agreement
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Q1) In Eastern Associated Coal Corporation v. United Mine Workers of America, District 17, James Smith worked for Eastern as a member of a road crew, a job that required him to drive heavy trucks on public highways. In March 1996, Smith tested positive for marijuana. Eastern sought to discharge Smith. In July 1997, he again tested positive for marijuana. Eastern again sought to discharge Smith. The District Court, while recognizing a strong regulation-based public policy against drug use by workers who perform safety-sensitive functions, held that Smith's:
A) conditional reinstatement violated the public policy.
B) conditional reinstatement did not violate public policy.
C) use of marijuana amounted to substantial continuity of identity in the business enterprise.
D) use of marijuana amounted to "just cause" for discharge.
Q2) How can an employer recover damages for breach of no strike clause even if injunction is not issued?
Q3) What conditions should be met by an employer petitioning for bankruptcy protection to reject the collective agreement?
Q4) What happens to the financial obligations of a corporation when it files a petition for the protection of the bankruptcy laws?
Page 19
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Chapter 18: The Rights of Union Members
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Q1) In Herman v. Local 1011, United Steelworkers of America, the constitution of the steelworker's international union conditions eligibility for local office on the member's having attended at least eight of the local's monthly meetings within the two years preceding the election. Noting that the rule disqualifies 92 percent of the almost 3,000 members of Local 1011 of the steelworkers union, the District Judge, at the behest of the Secretary of Labor:
A) made the rule optional for union members.
B) suggested reelection of the union leadership.
C) declared the rule void.
D) rescinded the representative authority of the union.
Q2) Congress has legislated a union members' "bill of rights" to guarantee that union internal procedures are fair and has prohibited certain practices by unions that interfere with employees' rights under the:
A) Occupational Safety and Health Act.
B) National Labor Relations Act.
C) Sarbanes-Oxley Act.
D) Title VII of Civil Right Act.
Q3) Explain the election procedure and requirements for election under Section 401 of the LMRDA?
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Page 20
Chapter 19: Public Sector Labor Relations
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Q1) The Federal Service Labor-Management Relations Act elections allows for the holding of _____ to determine the exclusive representative of a bargaining unit.
A) contract negotiation
B) representation elections
C) neutral arbitration
D) consent elections
Q2) Ron joined a public sector enterprise and the company had an active union. Ron wished to join the union but was denied membership in the union. Which of the following acts makes it illegal to deny union membership to an employee?
A) Federal Service Labor-Management Relations Act
B) Wagner Act
C) National Labor Relations Act
D) Fair Labor Standards Act
Q3) What do public sector labor relations statutes define?
Q4) Discuss appropriate representation units under the Federal Labor Relations Authority (FLRA).
Q5) Briefly explain the role of the Federal Service Labor-Management Relations Act.
Q6) How does the Postal Service Reorganization Act influence an impasse?
Q7) What is the importance of the Federal Mediation and Conciliation Service?
Page 21
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Chapter 20: Occupational Safety and Health
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Q1) The feasibility of a standard must be examined from two perspectives: _____ feasibility and _____ feasibility.
A) technological; economic
B) organizational; constitutional
C) individual; organizational
D) internal; environmental
Q2) 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.
Q3) _____ is/are the second leading cause of fatal occupational injury in the United States.
A) Burnout
B) Contagion
C) Accidents
D) Homicide
Q4) Name the two kinds of variances under OSHA.
Q5) What are the two main goals of the Occupational Safety and Health Act?
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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) In Ruby v. Sandia Corp., the plaintiff lost:
A) his disability benefits.
B) his pension.
C) his workers' compensation benefits.
D) All of the above.
Q2) Which of the following is not true regarding minimum standards under the Employee Retirement Income Security Act?
A) The minimum standards for pension plans must be met for the employee pension plans to qualify for preferential tax treatment.
B) Preferential tax treatment enables an employer to deduct contributions to qualified benefit plans immediately.
C) ERISA does not consider the deductions as income to participating employees until they receive the payments after retirement.
D) Compliance to ERISA minimum standards by qualifying their benefit plans is mandatory.
Q3) Discuss workers' compensation.
Q4) Explain the three major categories of the Social Security system.
Q5) 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) How is the Fair Labor Standard Act (FLSA) enforced?
Q2) Employees covered by the FLSA are entitled to overtime pay at one-and-a-half times their regular pay rate, for hours worked:
A) outside the company precincts.
B) over an above five standard weekdays in a workweek.
C) in excess of forty hours per workweek.
D) beyond thirty hours per workweek.
Q3) Explain the term "workweek".
Q4) Describe the coverage of the FLSA.
Q5) 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.
Q6) In Salazar v. Butterball, LLC, the plaintiffs were:
A) entitled to pay for the donning and doffing periods.
B) not entitled to pay for the donning and doffing periods.
C) fired for making a workers' compensation complaint.
D) fired for making a safety complaint.
Page 24
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