Posted by Matt Gilbert.

PepsiCo is beginning to take its health push seriously, stating last month that it plans to reduce the amount of sugar, salt and fat in its products by the year 2025. The company’s newest aspiration comes as a response to growing world obesity and its striving to be in better accordance with global health standards. It also comes in light of recent discoveries that Pepsi’s juice brand, Naked, was mislabeled to say that it included less sugar than it actually does. This was a massive roadblock in Pepsi’s success as it was marketing Naked juices as a healthy, low-sugar alternative, when in actuality it had extremely high levels of sugar.

This misinformation opens a larger can of worms as to the duty of companies to warn its customers of the dangers of its products and where the line of general knowledge and the withholding of information. Essentially where does the fault go from the customer to the company? This is not a straight forward issue by any means and both sides could be argued. If the business at fault knew the true information and knowingly withheld it from the customer, then that becomes a major issue.

It also brings up an interesting and complex discussion as to if Pepsi should be obligated to improve the overall health of their products. The general public knows and acknowledges the fact that soda as a whole is not good for one’s health, so is it really Pepsi’s obligation to attempt to make it healthier when the nature of the product is to be unhealthy? What it really comes down to is where the legal responsibility of the company ends and where its moral obligation to the well-being of its customers begins. The law places baseline guidelines on the standards that need to be achieved, but in many cases that simply isn’t enough. For example, Samsung began testing their batteries internally after the debacle with their batteries even though the law doesn’t require them to go to such lengths.

Pepsi’s commitment to reduce the amount of sugar in their drinks comes at a time when the social norm is with low-calorie healthy alternatives. That being said, the legality of the situation comes into play with whether or not Pepsi needs to make such a change and where the line between customer knowledge and company deception is drawn.

Matt is a marketing and finance major at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Joe Casey.

In the business world the line to remain ethical and make profit is thin. In the recent months Samsung has toed the line with the ethical standards of business due to their latest smartphone repeatedly catching fire all throughout the world. Samsung acting as swiftly as possible called for a quick recall of 2.5 million units of this phone however, the recall has gone anything but quick.

While Samsung seemed to be gaining ground on Apple in the smartphone business, they have produced their newest phone the Samsung Galaxy Note 7; the issue that has risen is that these phones are beyond unsafe and yet people still seem to be using them even after the initial recall. Due to the recall, Samsung has seemingly alleviated the possibility to be liable for any lawsuits that will come after the recall has been issued but the harm that was done prior to the recall has in estimate, “further dented Samsung’s reputation and shaved as much as $14 billion off its market value” (Times).  One of the many issues that face Samsung is that it seems they have wavered from government recall protocol and instead are trying to “save face” by venturing out on their own and advertising to bring the devices back for a change of battery when the issue is much more complex. The first recall while slow had seemed to stop the issue of their exploding phone as soon as October 1st.

Five days had passed since the recall seemed to fully become effective, until October 6^th when the first report of a replacement phone being defective hits the news. This stream picks back up and again Samsung is forced to stop producing the phone all together making it the largest smart phone recall to date. Finally, on October 11^th “Samsung announces it is stopping all sales of the phone while it investigates the problems.”(BBC). While Samsung at first was able to stay ethical, they decided to find an immediate solution due to the money they would lose and are now dealing with a larger problem all together.

This hit is only the beginning in the repercussions after this will be seen further in the court system yet their ethical standing to act as quickly as possible even though it went against the governments wishes on how to handle the recall was best for their business. Instead of staying unethical and ignoring the problem they chose to deal with it head on.

Joe is a sports management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Sources:

http://www.bbc.com/news/technology-37615496

Posted by Matthew Cassidy.

In 1988 the Video Privacy Protection Act was passed by Congress to prevent private information about tape rentals or sales records from being released to the public. The case involves a man named Mark Ellis who downloaded the Cartoon Network Application on his Android smartphone in order to watch shows on that network.

The app is able to track viewer history and an Android phone I.D.; it then sends the information to an analytics company named Bango. Bango is a very advanced organization that can not only monitor customer behavior, but also link user’s information about the user through the Android I.D.

Cartoon Network’s third party partner, Bango, violated the Video Privacy Protection App by gathering personal identification from the Android user’s I.D.  The court weighed its opinions on another case called Re Hulu Privacy Legislation that involved the Privacy Protection Act. This case helped Cartoon Network by providing the true definition of a subscriber to just visiting a website. Therefore, Ellis was not “committed” to the application, so therefore the Privacy Protection Act did not apply to him.

Matthew is a finance major at the Stillman School of Business, Seton Hall University, Class of 2019.

Several states have statutes that make it a crime to refuse to take a breathalyzer if suspected of driving under the influence. Some states, like New Jersey, make refusal a civil offense. The High Court is reviewing statutes in North Dakota and Minnesota that make it a crime for people suspected of drunken driving to refuse to take alcohol tests. Drivers prosecuted under those laws claim they violate the Fourth Amendment’s prohibition on unreasonable searches and seizures.

The justices questioned lawyers representing the states as to why police cannot be required to get a telephonic warrant every time they want a driver to take an alcohol test. “Justice Stephen Breyer pointed to statistics showing that it takes an average of only five minutes to get a warrant over the phone in Wyoming and 15 minutes to get one in Montana.”  However, this may not be correct.

“Kathryn Keena, a county prosecutor representing Minnesota, suggested some rural areas may have only one judge on call, making it too burdensome to seek a warrant every time. She said even if a warrant were procured, a driver could still refuse to take the test and face lesser charges for obstruction of a warrant than for violating drunken driving test laws.”

Telephonic warrants have also been the rule in New Jersey since 2009. Recently, the New Jersey Supreme Court reversed itself, reverting back to the federal standard requiring police to obtain a warrant after establishing they have probable cause. Under the more stringent standard of using telephonic warrants, police were complaining it took to long to reach a judge. Police also used consent forms they carried, causing an outcry from the defense bar that such a practice may lead to further abuses. Justice Anthony Kennedy said the states are asking for “an extraordinary exception” to the warrant rule by making it a crime for drivers to assert their constitutional rights.

The problem for the states is that without the threat of a refusal penalty, the only proof available at trial as to whether someone was intoxicated while driving is the observations made by police. Observations, however, cannot prove blood alcohol level.

The teen clothing chain, Aeropostale, filed for Chapter 11 protection, claiming online and fast-fashion retailers are the cause. The company expects to emerge within six months as a leaner company. It will close 113 stores in the U.S. and all 41 stores located in Canada.

“Online retailers and fast-fashion retailers such as H&M, Forever 21 and Inditex’s Zara have posed a threat to traditional apparel retailers, but American Eagle Outfitters, Inc. and Abercrombie & Fitch Co. have managed to turn around their businesses by controlling inventories and responding faster to changing fashion trends.”

The company may come out of this with restructured debt, but a long-term solution would require rethinking its brand.

Posted by Patrick Osadebe. 

On September 17, 2014, a federal judge sentenced Timothy Cromer, a former Detroit public library official, to 10 years in prison for bribery and conspiracy to commit bribery. He was charged for accepting more than $1.4 million in bribes from contractors of the library.

Timothy Cromer, 46, was the chief administrative and technology officer for the Detroit library from 2006 to 2103. Cromer helped James Henley set up a company called “Core Consulting and Professional Services.” Cromer then made it possible for the company to win the bid to provide information technology in the library.

Cromer also collected kickbacks from another individual who was charged in the indictment. All of these crimes took place between 2008 and 2011. Hearn and Henley both plead guilty to the charges and are currently awaiting sentencing on October 28, 2014.

Patrick is a finance major at Montclair State University, Class of 2016.

Posted by Arben Bajrami.

Sweatshops, or a workplace with unacceptable working conditions, have remained a problem up until recent years in business and in our economy.  Companies such as Nike and Adidas have workers in foreign countries sewing and producing equipment, apparel, and footwear for very little pay.  It is said that these sweatshop workers receive something called “living wage,” which is only five hundred dollars a month, or just enough money to survive.

Laborers that work in sweatshops are considered highly unethical.  Also, these items cost very little money to make but sell at outrageously high prices in retail stores.  For example, if it costs Nike four dollars and eighty cents to make a shirt, retail stores often mark up the product for eighteen dollars.

At least certain companies, such as Knights Apparel, are making a conscious effort to raise awareness to the horrors of sweatshops. Knights Apparel works closely with a program called Worker Rights Consortium.  They work “‘to combat sweatshops and protect the rights of workers who sew apparel and make other products sold in the United States.’”

Arben is a marketing major at Montclair State University, Class of 2016.

Posted by Radhika Kapadia.

The real cost of bribery is a question that often lacks a definitive answer.  It seems that Och-Ziff Capital Management, a hedge fund headquartered in New York City, is learning a hard lesson for allegedly engaging in bribery in Africa.  The firm is set to pay a hefty price of $412 million dollars, but the SEC has added the implicit cost of hindering fundraising by insisting that the firm clear any potential deals with investors with state regulators, adding considerably lengthy minutes and cumbersome dollars to the fundraising process.

Because of the massive bribery allegations, the firm was unable to obtain a waiver for the penalties corporations subject to civil law enforcement sanctions or criminal charges, such as bribery, typically face.   As a result, the company will be faced with the tremendous cost of an increased fundraising process and the more-than-ever watchful eye of the SEC over future investment transactions.   In the burgeoning era of bribery cases, the question of whether dollar penalties are truly enough to deter corporations from engaging in illegal acts is often difficult to assess.  However, the SEC is beginning to believe that financial consequences, coupled with other implicit penalization costs will truly begin to reduce bribery within the corporate world.

The allegations against Och-Ziff are primarily as a result of their dealings with Dan Gertler, an Israeli diamond-trade millionaire.  According to the Wall Street Journal, Gertler was known to use political connections in Africa to defeat competitors.  The Wall Street Journal noted that approximately “$250 million of Och-Ziff dollars were used to bribe the current president of the Democratic Republic of Congo in exchange for diamond mining rights.”  Despite blatant warnings and advisement from their lawyers, Och-Ziff executives, such as chief executive Daniel Och, chose to deliberately ignore corruption allegations against Gertler. Subsequently, the African subsidiary of Och-Ziff pleaded guilty to conspiracy to commit bribery, resulting in one of the largest settlements under the Foreign Corrupt Practices Act.   It seems that Och-Ziff is slowly learning that the true cost of bribery is pervasive, and that ignorance truly is not bliss.

Radhika is a graduate student with a concentration in Forensic Accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Posted by Dana Domenick.

A four year old boy was riding in his aunt’s 1999 Jeep Cherokee when it was rear-ended in 2012. He was killed when the SUV burst into flames. The gas tank on this Jeep Cherokee model is located behind the rear axle which means when the truck is hit from behind, it will likely trigger an explosion. The location of the gas tank is a major flaw in the truck and caused over 75 deaths. Fiat Chrysler took action on this issue in 2013, by recalling over 1.56 million Jeep Cherokees manufactured from 1993-1998 (Associated Press).

Judge J. Kevin Chason in Decatur County, Georgia ordered $40 million in damages to the child’s family. Three fourths of the damages were given to the family for his death while the other portion was given for pain and suffering. Fiat Chrysler requested a new trial, claiming that the jury acted irrationally and their prejudice tainted the verdict. Their motion was denied by the judge (Associated Press).

I agree with the court’s decision. The engineers who built these Jeeps should have had enough knowledge to place the car’s parts at locations in which they were protected. Extensive road testing should have been conducted on every vehicle to play out every possible collision scenario to ensure that the quality of the vehicle met the highest efficiency and safety standards. This death, as well as the many others caused by this issue, could have been prevented had Fiat Chrysler took their road testing more seriously and therefore, the verdict was correct.

Dana is a psychology major with a legal studies in business minor at Seton Hall University, Stillman School of Business (minor), Class of 2017.

Posted by Dana Domenick.

A four year old boy was riding in his aunt’s 1999 Jeep Cherokee when it was rear-ended in 2012. He was killed when the SUV burst into flames. The gas tank on this Jeep Cherokee model is located behind the rear axle which means when the truck is hit from behind, it will likely trigger an explosion. The location of the gas tank is a major flaw in the truck and caused over 75 deaths. Fiat Chrysler took action on this issue in 2013, by recalling over 1.56 million Jeep Cherokees manufactured from 1993-1998 (Associated Press).

Judge J. Kevin Chason in Decatur County, Georgia ordered $40 million in damages to the child’s family. Three fourths of the damages were given to the family for his death while the other portion was given for pain and suffering. Fiat Chrysler requested a new trial, claiming that the jury acted irrationally and their prejudice tainted the verdict. Their motion was denied by the judge (Associated Press).

I agree with the court’s decision. The engineers who built these Jeeps should have had enough knowledge to place the car’s parts at locations in which they were protected. Extensive road testing should have been conducted on every vehicle to play out every possible collision scenario to ensure that the quality of the vehicle met the highest efficiency and safety standards. This death, as well as the many others caused by this issue, could have been prevented had Fiat Chrysler took their road testing more seriously and therefore, the verdict was correct.

Dana is a psychology major with a legal studies in business minor at Seton Hall University, Stillman School of Business (minor), Class of 2017.