Posted by Ovais Ahmed.

An article posted by the Wall Street Journal talks about the time it takes for high courts to actually hear a case. The average time runs around 6 years, and since 2009 that time period has been extended. There has been a case involving two businesses that are battling about who gets trademarks rights to screws they use. The article states,

The Supreme Court on Tuesday will consider a business battle over trademark rights for screws that has been in the courts for more than 16 years, an extreme example of how cases headed for the high court can be matters of endurance. . . . The average age for a high court case is nearly six years, but 37% of cases have taken longer since 2009. In most circumstances a case can spend at least three to four years in the courts before resulting in a high-court ruling.

The process to get a case heard at the high court is a true test of endurance, and the willingness to wait the time period in order to get the issue resolved in these courts.

The cost of legal fees overtime can add up to high numbers, and is one of the reasons people involved in the case can get emotional. The article states, “ Given the time and money litigants put into cases, emotions can run high by the time the Supreme Court gets involved. That is true in the long-running trademark case before the court this week.” There isn’t a specific reason that cases take so long to be heard in the Supreme Court, but it’s just that some rulings for appeals happen to take a while. Criminal cases are considered more important, and so if a civil case arises during the same time as a criminal matter, the civil case will have to wait.

The Supreme Court only sits 9 times out of the year, and if a case lands on the right timing of when the court sits, that case is likely to be heard quicker than if it landed during off season. If one needs a case to be heard in Supreme Court, I suggest he or she has the time, money, and endurance to wait his or her turn.

Ovais is a business administration major with a concentration in management at Montclair State University, Class of 2015.

Posted by Keith Cleary.

For almost a half of a decade now, over 40 patent lawsuits have been going on between “the two largest smartphone companies, Apple and Samsung.” (Chowdhry). However, the two companies came to terms on ending all of the patent lawsuits that are outside of the U.S. These countries are all over the world including Britain, Spain, Germany, and Italy. Even though these two technology giants are dropping their lawsuits against each other internationally, they still have not ended their lawsuits against each other in the states. A few years ago, “a jury in California awarded Apple with $119 million out of a $2.2 billion lawsuit against Samsung three months ago”(Chowdhry). Even, though they settled their disputes overseas, the two competitors are still relentless with their lawsuits.

Some of the lawsuits are driven by a patent lawsuit filed in 2011. Steve Jobs was actually behind the lawsuits in 2011 saying, “I’m willing to go thermonuclear war on this.” (Chowdhry). “This” meaning the lawsuits filed in 2011 were over Samsung’s Android. The two companies have tried to work out their differences through a mediator but to no avail. Judge Lucy Koh of the U.S. District Court was actually really hoping for a resolution. She stated, “If all you wanted is to raise awareness that you have I.P. (Intellectual Property) on these devices, messages delivered. In many respects, mission accomplished. It’s time for peace.” She further stated, “If you could have your CEOs have one last conversation, I’d appreciate it.”(Chowdhry). She realizes that the two companies do not want each other copying off their designs and property.

The comical part about all of this is that, with all the lawsuits going on, Samsung and Apple are business partners. Samsung supplies major components to Apple’s products, such as memory chips and processors. However, it does not look like this relationship will last forever. While Apple is one of Samsung’s biggest customers, it looks like their taking business elsewhere—“Taiwan Semiconductor Manufacturing Company,” to be exact. (Chowdhry). Apple buys chips and other components from them.

The good news is that Apple is reducing the amount of lawsuits against Samsung. Apple dropped one of their lawsuits for patent infringement and the two companies settled another lawsuit with the U.S. International Trade Commission regarding an important ban on Samsung’s products (Chowdhry). With the dropped lawsuits, there is a chance for amends and a new relationship between them.

Keith is a business law student at Montclair State University, Class of 2017.

Posted by Surya Makkar.

Over the past few years, Tesla has emerged as a frontrunner when it comes to electric vehicle technology. Their technology packed, self-driving, vehicles have come with their fair share of problems however. Not only has Tesla faced legal obstacles when it comes to their various technologies they use in their products, but more recently, Tesla CEO Elon Musk was sued by the Securities and Exchange Commission (SEC). Elon Musk was accused of committing fraud by publically making false statements, which could have impacted investors. To give some background, around a month ago, Elon Musk tweeted saying that he had “funding secured” to take Tesla private at $420. Something interesting to note is that the SEC did not sue Tesla as a whole, but rather only filed a suit against Elon Musk.

Elon Musk had never said anything before this to investors or shareholders about taking the company private, which is why everyone was caught off guard and was extremely shocked. After the suit was filed, Tesla shares fell more than 12 percent in after-hours trading. The SEC subpoenaed Tesla, financial institutions, and Tesla board members, to interview them and gather more information. The SEC found that Musk had been in a feud with investors who continued to say Tesla shares would fall.
A few days later, Musk and the SEC reached an agreement that required Elon to step down as Chairman of the board of Tesla and required him to pay a $20 million fine. According to the agreement, Musk does not have to admit any guilt and has 45 days to step down from the role of chairman. He will continue to serve as the CEO of Tesla however. This case goes to show how business professionals are being watched at every moment. One wrong move in the business world can lead to millions of dollars of legal action being taken against you, which is why it is imperative that people in the business world act as if they are being watched at all times.

Surya is a business law student at the Stillman School of Business, Seton Hall University, Class of 2021.

Sources:
https://www.nytimes.com/2018/09/27/business/elon-musk-sec-lawsuit-tesla.html

Elon Musk settles SEC lawsuit, forced out as Tesla’s chairman but stays as CEO, $20 million fine and more

Posted by Aishwarya Rai.

Tesla, the Palo Alto-based automative and energy company, has been subject to much staggering lately, due to the conduct of its ex-Chairman and CEO, Elon Musk. Musk and Tesla have been subject to inquiries by the Department of Justice (DOJ) and Securities and Exchange Committee (SEC), as a result of Musk’s conduct; Musk tweeted about taking the company private, stating that funding had already been secured and shares would be priced at $420. Additionally, Musk made reference to those betting on shorting Tesla stocks by mentioning them and the “burn of the century.” Further details showed that Musk had no such funding secured, all whilst Tesla stocks zoomed upwards and short-sellers did in fact face losses.

This led to the DOJ and SEC to inquire into Tesla’s conduct as the tweets seemed to show that Musk misled the market to believe that Tesla would undergo privatization and thus gain some greater market value. When it was revealed that Tesla did not have the required amount of capital to go private, the SEC deemed that Musk’s actions were done to increase stock value and to financially harm short-sellers, making it an act of bad faith.

Furthermore, Musk’s actions showed a lack of ethical consideration as he seemed hostile towards short-sellers. Musk has a responsibility to shareholders as a CEO and the accuracy and truthfulness in the information he disseminates falls under this stipulation. Other acts that put his ethics in question were smoking on a podcast with Joe Rogan, which may go against Tesla’s codes of conduct as it can be said that he was acting as the CEO of the company while on camera.

These incidents put into perspective the need for important business officials to be mindful of the ripple effects of their actions on their fellow employees, clients, and shareholders. The effects of bad conduct, whether intentional or not, can be harmful and put companies at risk of failure. Accurate information is what creates a safe market, legally and financially.

Aishwarya is an economics and finance major at the Stillman School of Business, Seton Hall University,
Class of 2020.

Article:

https://www.cnbc.com/2018/09/27/tesla-falls-4percent-on-report-elon-musk-sued-by-sec.html

Posted by Kyle Greene.

The SEC recently filed a lawsuit against former Chairman and current CEO of Tesla Elon Musk because of a tweet he sent out earlier this year. The tweet stated that he had plans to take the company private when the stock price reached 420 dollars. He also included that he had funding secured for this, and he may have at the time of the tweet, but obviously was not able to see the deal through. After the tweet, Tesla stock increased quickly by about 9 percent. The SEC claimed that Musk had published “False and Misleading” statements and therefore had violated insider trading and market manipulating laws. Some believe the motive behind the tweet was to punish short sellers of the stock, but Musk has adamantly denied any foul play.

The SEC wasted no time in their attempt to force Musk to settle, threatening him by saying they wanted to have “a judge bar Musk from serving as an officer or director of a public company.” After the SEC took this action, Musk and Tesla ended up settling for an amount of 20 million dollars each in fines. The SEC has forced Musk to step down from his chairman position on the Tesla board of directors; originally they wanted to remove him from CEO as well, but were only able to remove him from the board. I feel as though the SEC used this case as an example to other high level executives of what happens when inaccuracies are so carelessly thrown around. And in an interconnected world, everyone finds out about everything very quickly, so if you decide to publish a statement about the company it better be accurate because you cannot take it back.

This case was never about the wellbeing of Tesla shareholders; the objective was to make headlines and send a message. On the other hand, Musk has not always been a shining example of how to act in the business world, with his recent stunt on the Joe Rogan podcast. The Tesla board of directors has actually set up a committee to monitor Musk’s communications moving forward, which is a smart move by them. Regulators have an eye out for Tesla and Musk especially, being that he is in the public eye so often. Although it is obvious that Musk acted irrationally and illogically, the nature of his work and the innovative mindset behind his companies is one of controversy and pushing the envelope. This careless mistake was just a mishap along the way, and no matter how serious the SEC may want to treat it, “Why would the SEC want to harm the company more than the tweet itself?” Whitehead said. “That would be like throwing the baby out with the bathwater.”

Kyle is a business management major at the Stillman School of Business, Seton Hall University, Class of 2020.

Source:

https://money.cnn.com/2018/09/27/news/companies/elon-musk-sec-tesla/index.html?iid=EL

Posted by Shellian A. Murray.

The basis for this blog will be an Enron story” The Smartest Guys in the Room (2005)” which was retrieved from the documentary listings on Netflix. A 2929 Entertainment, a Wagner/Cuban Company, Magnolia Pictures, HDNet Films. The documentary takes a behind the scenes look at the reliable energy company whose downfall will forever change the scope of business prospects around the globe. The “Jesus saves” notion was embedded with everyone asking the same sets of questions, which include, whether or not one main person was to be blamed, or it is a shared effort, and what mechanisms were put in places to make sure such events will never occur again. The fall of Enron was considered to be the largest bankruptcy in the United States of America history.

Enron, a company that took approximately 16 years to build and with a net worth of over a 100 million in assets took 24 days to go bankrupt.  What everyone thought was a significant investment and a company that was poised to take over the energy section with major gas prices, turns out to be the biggest Ponzi scheme. But in an instructive tale of corporate greed, negligent and diffusion of responsibility, there was no evidence of directors’ fiduciary duty, integrity, and stewardship displayed from those who were the leading players in the Enron scandal.

Jeffery Skilling, the former president and CEO and Kenneth Lay chairman/CEO were both Harvard graduates, the leaders of Enron, and were known as “the smartest guys in the room.”  Skilling and Lay were the captains of the ship; one that they thought was too powerful to go down. The employees that were involved were consumed by pride, greed, arrogance, and intolerance that they fail to realize they were just sinking themselves into a hole: a hole that will be unable to climb back out. The chaos caused by Enron traders in the 2000 California energy crisis left many disgruntled. California was seen as the money pit for Enron. The game was to create blackouts that would then drive-up gas prices significantly.  Many called on the federal government to fix a deregulatory system that Enron officials took for self-interest, but were told that the state was on its own and had to correct the problem by themselves.

On the other hand, Enron’s CFO, Andrew Fastow was still able to continue leaving massive debts off the balance sheets and booking future earnings, producing an illusion of market-to-market profit.  The Security Exchange Commission (SEC) did not have a problem with this accounting method and failed to enforce against companies like Enron. But reported profits were actually losses, even though amounts were not collected or collected, but were supposedly prepayments from clients, where such momentum was created to keep the stock price up.  But after winning the award for the best innovative company six years in a row, many persons started to question, how Enron made its money. A reporter by the name of Bethany Mclean wrote an article, “Enron stock overpriced?”  realizing that the cash flows were not coming together.

Jeffery Skilling the CEO had resigned suddenly, which lead the SEC to launch an investigation.  Enron declared bankruptcy on December 4, 2001, giving employees thirty (30mins) to leave the building. But before such bankruptcy declaration, on October 23, 2001, Author Andersen, the prestigious accounting firm had destroyed thousands of documents which were related to Enron finances.

Opinions and Reactions

The operation of Enron defrauded employees and investors out of millions of dollars, which at the same time the “big guys” who were involved in the game were quietly bailing themselves out, putting millions in personal and offshore accounts including the banks, such as, Chase and Citi Bank. Ken Lay had a high level political figure as a good friend, one that could help Enron to maintain its operation’s practices. Consequently, and if one were to believe it or not, politics is the driving factor for all regulatory and policies within any countries operations.

ArthurAndersen, the prestigious accounting firm, was paid a million dollar per week, denied their awareness of such practices of Enron. Auditors that supposedly gave reasonable assurance that the financials were, in fact, true and fair and free of material misstatements. As a result, many persons questioned the integrity and independence of the accounting and auditing profession. Such questions left a bitter taste in my mouth, within a career that has my interest and aspiration. A profession I held a role as an external auditor, internationally, and now as an accountant, I am in an “aww” moment, as to how people’s greed could allow them to continue embezzling cash or equivalents by any means necessary, no matter what harm may have caused by such actions. The disappointment I have with these people that are involved, by allowing their integrity to be compromised because of the greed of money is very heart rendering, wherein the end, mostly the poor suffer from such harsh deals.

Shellian is a master of science in accounting student at the Feliciano School of Business, Montclair State University, Class of 2018.

Posted by Nora Shelbi.

In the article, Isaac (2017), discussed the issue of the Uber investor and claimed that Travis got involved in the material misstatement and fraudulent trading.  As per the investors, it has been declared that such fraudulent activity has been done with the intention to get the outside control of the board; and, he is involved in the breach of contract and breach of duty. Also, the investors are claiming that Mr. Kalanick’s “overarching objective is to pack Uber’s board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as C.E.O.”

The author of the article has declared that all the fraudulent activities which have been done by Mr. Kalanick is mainly due to restoring his position as the CEO and for this purpose, he is using the fraudulent ways which are not allowed at all in the corporate environment. The persons who were in favor of him have declared that he does not want to be the chief executive officer of the company, but others have said that he is doing this just to achieve the control without even having the title of the chief executive officer of the company.

There are many other claims, which are made, including an atmosphere of sexual harassment at workplace. The company is also sued by the sister company of Google for stealing the trade secrets of company, Waymo. Such issues concerning litigation against the company as well as its officials are not in favor of the company. It is deteriorating the image of the company, as well as, dissatisfying the investors to a greater extent. (ISAAC, 2017)

Nora is a graduate accounting student at the Feliciano School of Business, Montclair State University.

Reference:

ISAAC, M. (2017, Aug 10). Uber Investor Sues Travis Kalanick for Fraud. Retrieved Sep 20, 2017, from The New York Times: https://www.nytimes.com/2017/08/10/technology/travis-kalanick-uber-lawsuit-benchmark-capital.html

Posted by Anna Fintor.

Wells Fargo is currently involved in a legal scandal in which it is said to have opened bank accounts and credit cards without the costumer’s consent. According to Reuters, “The U.S. Consumer Financial Protection Bureau and other regulators ordered United States’ third-largest bank by assets to pay $190 million in fines and restitution to settle civil charges.” The scandal has been going on for several years and there were as many as 2 million accounts opened illegally.

Wells Fargo has been known for its “high-pressure” sales culture, which one of my personal friends who has worked in one of the branches can account for. The Bloomberg article I have read describes how anonymous users have been posting cartoonish videos on YouTube presenting the negative work atmosphere at Wells Fargo. The videos show how management pressured and threatened workers that if the unreasonable goals were not met the workers would be let go.  It is suspected that the videos were created by employees as far back as in 2010.

While reading the articles, I remembered one of the discussions from class of how in large corporations top executives can pressure the bottom level workers to commit the illegal activity. One of the YouTube videos shows that bankers received $5 McDonald’s gift cards for opening a new account, while the executives received generous bonuses. In my opinion that’s very unethical and just wrong.

In the recent weeks the CEO, Jhon Stumpf has resigned and Wells Fargo continues to be under investigation. I feel like this situation is going to hurt Wells Fargo not only financially but also create bad reputation. Due to the popularity of social media, the videos will spread to a vast number of the population, including to those who may not be keeping up with the news.

Anna is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Sources:

https://www.bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal-after-wells-fargo

https://www.bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal-after-wells-fargon fines and restitution to settle civil charges

http://www.reuters.com/article/us-wells-fargo-accounts-california-idUSKCN12J2O

Posted by Ashley Torres.

In July of 2012, Marissa Mayer became both the President and Chief Executive Officer of Yahoo!. During her time within the company, she has found herself involved in many lawsuits, and is yet hit with another. Recently, in the San Jose District, a former media executive known as Scott Ard filed the lawsuit against Mayer. He is accusing her of running a campaign that discriminates against male employees, specifically. His reason behind this alleged accusation includes Mayer’s implemented “use of the employee performance rating system to accommodate management’s subjective biases and personal opinions, to the detriment of Yahoo’s male employees.” Mayar states the employee performance rate system has improved their overall performance, but Ard believes he was fired not because of his performance, but because of his gender.

Besides just accusing Mayer, Kathy Savitt, former chief marketing office, and Megan Liberman, editor in chief, are also involved in the lawsuit for discriminating against men. As evidence of this accusation, the lawsuit alleges that 14 of the 16 senior-level editorial employees were female whom were purposely hired by Savitt, while firing men because of their gender.

In February of 2016, there was another filed lawsuit with similar accusations. A former employee by the name of Gregory Anderson was fired, while he attended a fellowship at the University of Michigan. Anderson too believed that he was fired because of his gender and not his performance because when he asked to view his documentations with his performance that supposedly resulted in his termination, Anderson was denied. Both Anderson and Ard are represented by the same attorney, Jon Parsons, in which he declined in making any comments.

Ashley is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by Dylan Beland.

One of the most talked about issues in business law news is the Wells Fargo scandal. The story behind this scandal is that the Department of Justice and many attorneys are investigating the possibility that Wells Fargo has millions of fake accounts opened at their banks. The result of the investigation was Wells Fargo had to pay a 185 million dollar fine.  Wells Fargo had to let go over 5,300 workers for fraudulent sales tactics.

From this, the concern and worry in the banking industry instigated a lot of questions about the fake accounts being opened. Employees were pushed to reach near-impossible sales targets, which in turn led to the creation of fake accounts. Mike Mayo, a banking analysist at CSLA, said the investigation “reflects pent-up frustration by the public over the lack of accountability at big banks post financial crisis.”

The people that could see some blame for this are the investors of the banks. One of Wells Fargo’s biggest investors has not spoken, since the situation has arisen. Warren Buffett is Wells Fargo’s biggest investor and he owns Warren Buffett’s Berkshire Hathaway.

On September 20, Wells Fargo is meeting with the Senate and is having John Stumpf, CEO, represent and testify at the hearing. He apologized for the fake accounts but also said he does not plan on resigning from being CEO of Wells Fargo.

Dylan is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by Justin Cohen.

Martin Shkreli a pharmaceutical CEO raised the price of an AIDS drug that saves people’s lives. In December of 2015, the prices of the drug, called Daraprim, was raised by five thousand percent, one bottle originally being $13.50 to $750.

The ethical problem in this situation was by making the drug so expensive that only a select few could afford it, hurts the people the company is allegedly trying to help. The company made this drug not only to make a profit, but also to help patients with AIDS. Shkreli states “Because the drug was unprofitable at the former price, so any company selling it would be losing money. And at this price it’s a reasonable profit. Not excessive at all” –Shkreli.

This drug has been selling for sixty-two years. I think the new price of this drug is very excessive. The company has been living off the past profit for years. The price could have been raised, but 5,000 percent is very excessive.

Companies making drugs to help save lives should be more worried about the people they are serving than making the most profit they can. This brings up the ethical questions, was making money more important to Shkreli than saving lives? What did he think was going to happen to the patients who now could not afford the drug? Why did Shkreli put himself before thousands of other people? Lastly, what are the ethical obligations of a company to aid the public vs. making a profit?

Justin is a sports management major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Jose L. Diaz.

Imagine having a potential life-ending disease or illness that you depend on medication for to survive. Money is tight, and most of your savings goes towards purchasing the medication in order to survive. Suddenly, just overnight, the price of this drug not only increases, but it increases by 5000%. While it sounds absolutely absurd, this actually happened when Turing Pharmaceuticals, a startup company being run by a former hedge fund manager, increased the price of their drug called Daraprim, from $13.50 a tablet to $750 a tablet overnight. That is not $750 a prescription–it is $750 per tablet. This brought the annual cost of treatment for some patients to over a hundred thousand dollars.

Martin Shkreli, CEO of Turing Pharmaceuticals, claims that the drug is so rarely used that the price increase would not have a significant effect on the health system. He claims that the money earned from the price increase would go towards developing better treatments for toxoplasmosis, the disease that is treated by Daraprim. However, the price increase will make it almost impossible for private insurers like Medicare and patients in hospitals to attain. The fact that the drug is so expensive and hard to attain now, it makes it harder for other companies to make samples of the drug and replicate it. Overall, the drug is the leading treatment for the life-threatening parasitic infection toxoplasmosis. The increase in price seems to be an only profit-driven choice.

Jose is finance and accounting major at the Stillman School of Business, Seton Hall University.

Posted by Shalin Thomas.

The article that caught my attention and that I will be discussing is titled, “Companies Face Lawsuits Over Website Accessibility For Blind Users” by Sara Randazzo. Various world famous companies are being sued for not having accessibility on their websites for disabled users, specifically the blind. This means that website does not have a speaking feature which allows the customer to hear correctly what they are purchasing. Some of the companies that are facing these lawsuits include Toys “R” US, Burger King, and Anthropologie. Over 240 business like these are facing lawsuits and many of them are settling for between $10,000 and $75,000.  The American Disabilities Act constrains the prejudice against all persons with disabilities and this issue violates that precedent.

Although this is an issue because it takes away the opportunity for the disabled to lead regular lives with outside hassle, these lawsuits are said to only be “a legal-fee shakedown and don’t improve accessibility”, as quoted from the article. The lawyers that take on these cases are ones that are ones that are trying to find “the next great cause of action”. Juan Carlos Gil, a legal blind resident of Miami, has sued over 30 businesses because their websites are not accessible to the disable. In one instance, he ordered racing wheels for his wheelchair online, and it was the wrong item because the website dictated it wrong. He along with his lawyer just want to make sure that no one is excluded from being able to surf the web.

Carlson Lynch is a partner of the law firm that brings to court many of these lawsuits. He has been sending letters to several companies before looking toward solutions for these issues. These lawsuits are given to judges who, most of the time, send them to mediation which results in the settling of the issue in private. The companies have a period of time where they can resolve the issues brought upon them. These suits are said to extend to mobile device applications as well.

Shalin is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source:

http://www.wsj.com/articles/companies-face-lawsuits-over-website-accessibility-for-blind-users-1478005201

Posted by Tiffany Zapata.

Wells Fargo is the most recent bank to get caught in the act of predatory lending. The bank was accused in court filings of targeting minorities, such as black and Latino borrowers, for more costly home loans in comparison to whites. The acts took place in Cook County, Illinois, with a population of about 5 million. The case was filed in Chicago federal court.

The bank’s strategies encompassed home-loan origination, refinancing, and foreclosure. Their main concentration was equity stripping. Equity stripping is asset based lending which maximizes lender profit and makes it nearly impossible for the borrower to pay it off due to onerous loan terms. Before getting caught, the bank got away with 26,000 loans. The court order called for 300 million dollars in money damages.

Tom Goyda, a spokesman for the San Francisco-based Wells Fargo stated: “It’s disappointing they chose to pursue a lawsuit against Wells Fargo rather than collaborate together to help borrowers and home owners in the county,’’ Goyda said. “We stand behind our record as a fair and responsible lender.”

Wells Fargo is also currently involved in a lawsuit with the federal government due to its mortgage lending. This is not the first time courts have seen these sorts of acts from banks. Miami and Los Angeles filed similar suits alleging banks were “red-lining” minorities to block loans and for not informing investors on the status of the mortgages that were sold.

Wells Fargo ended up wining the lawsuit brought by the City of Miami in July. The City claimed Wells Fargo sold predatory mortgages in neighborhoods immersed with minorities before the “housing bubble burst.” The judge decided the City was not qualified to file these claims under the Fair Housing Act. The decision is being appealed.

Tiffany is a business administration major with a concentration in international business at Montclair State Univsersity, Class of 2016.

Research proposal posted by Jessica Thomulka.

Part One

Healthcare costs are skyrocketing in the United States. Even prior to the passing of President Obama’s Affordable Care Act, the burden on American corporations to provide healthcare to their employees was placing stress on businesses. Lifestyle control is the term given to an employer’s influence on an employee’s actions outside of the scope of their duties as an employee. Some of the most common examples of lifestyle control revolve around the preventative measures to lessen the pressure of the paying for employee medical coverage. The two most costly medical conditions are complications arising from smoking and obesity. The National Business Group on Health reports that obese employees cost employers $700 more than their average-weight employees, annually, for their healthcare. Along with healthcare, another aspect of business that employers are concerned about is productivity. In a 2002 study, the Center for Disease Control reports that productivity losses associated with workers who smoke cigarettes are estimated to be $3,400 per smoker.[1] Business owners and executives are concerned with maximizing their profits and ensuring the health of their company, and by keeping their employees healthy, they can reduce their risk of paying high medical expenses for preventable diseases. Some states like New York have passed provisions to prevent employer discrimination against an employee’s “after-hours” conduct, however there is no federal statute.

Part Two

There are both pros and cons to the idea of employers having control of the lifestyle of their employees. The stakeholders involved include the employer, the employees, the family of the employees, and even the ‘vice’ industries that the employers are safeguarding against such as the tobacco and gambling industries. The employers reap the most positive benefits out of lifestyle control provisions. They lower their cost and increase their productivity. The employees may also benefits from such provisions due to increased health, but they give up some of their freedom in the process. Some companies also impose lifestyle control upon the employee’s family if they are on the same health insurance policy so likewise, they may gain health benefits but sacrifice some of their freedom. Lastly, ‘vice’ industries suffer the most from lifestyle controls because they ultimately lose business due to embargos on acts like smoking and gambling. If enough companies impose lifestyle controls they could potentially bankrupt ‘vice’ industries.

Part Three

The biggest ethical question regarding lifestyle control is the autonomy of the employee. Should an employee be free from external control or influence by the employer? According to the United States Conference of Catholic Bishops (USCCB) there are several themes of Catholic Social Teaching.[2] Rights established in the Catholic tradition have an impact on lifestyle control. While privacy is not explicitly protected under the United States Constitution it falls under the penumbra of implied rights in the Bill of Rights due to its importance. The Catholic tradition teaches that human rights and responsibilities are at the heart of a healthy community. Within the workplace there is a basic right of workers to be respected by their employers. That is in decent wages, the right to unionize, and a productive work environment. The USCCB notes that work is more than just providing for yourself and your family because it is a way to participate in God’s work. They also suggest that a worthy measure of an institution is its ability to enhance the life of the human person. In the case of lifestyle control, Catholic Social Teaching aligns with provisions to protect the health of employees. This would support a ban on smoking and other such vices that are known to be detrimental to one’s health. If the motives behind the employer’s lifestyle controls align with what is good for society then they should be permissible under the Catholic Social Teaching.

[1] Halbert, Terry, and Elaine Ingulli. Law & Ethics In The Business Environment. 7th ed. Mason, OH: Thomson/South-Western West, 2003. Print.

[2] “Seven Themes of Catholic Social Teaching.” Seven Themes of Catholic Social Teaching. Web. 09 Mar. 2016. .

Posted by Deena Khalil.

On Wednesday, November 6, 2014, there was a court hearing about big-time banks being sued for manipulating a financial benchmark, Libor, by “U.S. municipalities and financial funds who argue they suffered financial damages by receiving lower interest rates on transactions as a result of the suspected manipulation.” Libor is short for the London Interbank Offered Rate, and it’s used to set the rates on things worth trillions of dollars such as loans, credit cards, and some complex derivatives. The benchmark is calculated each business day by averaging out interest rates in which banks estimate they could borrow from each other. But these banks have to be within the London trading operations in order to be part of the benchmark. Some of the banks that are being accused are JPMorgan Chase, Citigroup, and Bank of America.

Plaintiffs include U.S. municipalities and financial funds who argue they suffered financial damages by receiving lower interest rates on transactions as a result of the suspected manipulation. They allege that evidence gathered by investigators in the U.S., Europe and around the globe shows bank traders involved in the rate-setting process rigged the outcomes to boost their trading profits.

The banks accused are trying to get these cases to be dismissed There are U.S banks that have been struck with billions of dollars in penalties due to Libor manipulation. For example, JPMorgan was fined $78 million by European authorities! Some banks have settled cases, but defendant banks in the present case are seeking to dismiss due to “the lack of personal jurisdiction.” Attorneys “argued the recent Supreme Court rulings established that corporations are ‘at home’ only in their respective countries and in most cases are subject only to lawsuits filed there, not in U.S. courts.” They claim that the Libor manipulation activity occurred outside the U.S.

Deena is a business finance major at Montclair State University, Class of 2017.

Posted by Rizzlyn Melo.

The practice of corruption in any company hurts every single person involved. This is certainly the case with Petrobras, a Brazilian state-run oil company. The corruption that has been associated within the large company has caused it exponential damages and has tarnished the reputations of both business executives and political figures. In the BBC article, it was reported that the company suffered an “overall loss of $7.2 billion” and an impairment charge of $14.8 billion that reflects the decreased value of its assets. These figures represent the first losses the company has suffered in decades.

The unfortunate circumstances Petrobras is currently facing are the results of various criminal activities. One of the most scandalous discoveries made against Petrobras is its members’ involvement in bribery. Bribery can be defined as the unlawful offer or acceptance of anything of value in exchange for influence on a government or public official. Various government officials have been linked to these bribery allegations. Even Brazil’s president, Dilma Rousseff, has endured scrutiny for her alleged involvement. Rousseff was a board member of Petrobras during the time of the illegal activity. Thousands of Brazilian people have protested against their elected president. Later, however, an attorney general of any charges exonerated Rousseff. Another form of corruption Petrobras has been accused of is money laundering, which is the concealment of the origins of money obtained illegally. In this case, money laundering was employed to hide bribes as well as several illegal donations made to political parties.

At least forty politicians are currently under investigation. That number does not even include the numerous business executives that have lost their positions. The criminal activities of this one company have ruined countless lives and has shaken an entire nation. The corruption in Petrobras demonstrates how important business law is in keeping companies such as this in check. Petrobras has lost more trust than profit, and that is something it cannot easily make up.

Rizzlyn is a business administration major with a concentration in marketing at Montclair State University, Class of 2017.

Posted by Da’Naysia Aarons.

In an article called, “Lawsuits and Consumer Reporters Fight Home Warranty Companies,” Heidi Turner discusses how home warranty companies are being sued by consumers. An investigative reporter was asked to look into a company called Sensible Home Warranty who was allegedly selling consumers a warranty policy. However, when one consumer asked for a new microwave, Sensible Home warranty refused to pay out her claim. While investigating the company, a reporter name Michelle Mortensen found that Sensible Home Warranty has more than 1,950 complaints. In the article it states, “An investigation into the company was undertaken by the Nevada Division of Insurance but in the meantime, the company reportedly went out of business.”

Due to the fact that the company was mistreating their consumers and taking advantage of their money, the company was fined $5,000 dollars for not complying with the state’s Service Warranty Act. In the article it further states, “The business failed to pay legitimate claims made on home warranty contracts sold in the State of Utah, or to pay them in a timely manner, and the business failed to respond to inquiries of the commissioner.”

Since many other home warranty companies have been taking advantage of other consumers, lawsuits have been filed against them.

Da’Naysia is an international business major at Montclair State University, Class of 2017.

Posted by Joe Zichelli.

The entrepreneurial spirit that was once a driving force in America is under attack due to egregious government overreach and licensing requirements that are putting hard-working and dynamic Americans out of work – even in some cases costing them their livelihood as well as thousands of dollars in fines. Occupational licensing – the need to secure a government permission slip to perform a specific job – is an oppressive force on small businesses and the backs of countless Americans trying to make an honest living. This unconstitutional overreach must be corrected and the government must once again recognize economic liberties as a substantive right and one that cannot changed.

Occupational licensing is a problem that is morally disturbing and a direct impediment to the success of various businesses throughout the United States. Occupational licensing can be summed up as “permission slips” from the government allowing one to work, as defined by the Institute for Justice, a libertarian law firm concerned with defending civil rights from government infringement.[1]   In addition to this simply making it harder to succeed, more often than not, poorer people as well as minorities and immigrants are more adversely impacted as a result of these licensing requirements because they are the ones who are unable to pay for the required education or even the license in order to comply with the laws promulgated by various states. Since they cannot afford the license or education requirements, they are subjected to a fine, imposing another financial burden – and yet another road bump on the path to success.

The number of industries that require licensing is absurd and only growing. These industries include but are not limited to, florists, casket builders, hair braiders, barbers, and eyebrow threaders. In analyzing something like hair braiding or eyebrow threading, many times people emigrate from other countries and work doing the aforementioned tasks as a way to earn an honest living. Quite often the state in which they work requires them to obtain a cosmetology license, even though while attending beauty school the type of braiding or eyebrow threading is not taught. This is a process that can cost thousands of dollars and consume hundreds, if not thousands, of hours. There are countless examples of professions that require licenses as an arbitrary means to protect an industry; the funeral business and florists are two that are frequently impacted as well. [2]

One of the most upsetting cases of occupational licensing happened recently in the bustling city of Memphis, Tennessee. On January 18th, 2017, Elias Zarate was cutting hair in his barber shop when “the barber police” entered and found that the license he had on display was not authentic. Although Zarate believed the license was authentic, the barber police shut his operation down and began legal proceedings against him, simply because he did not possess a piece of paper to cut hair. Eric Boehm, who published the story in an online article, describes the situation that landed Zarate in the barber shop, writing:

Zarate had dropped out of high school. He’d made it to the 12th grade, but he had a failing GPA and spent most of the school day sleeping through classes because he was exhausted from working a series of after-school and weekend jobs. His mother had died when he was just 10 and his father had left the family soon after, leaving Elias and his two younger siblings in the care of relatives. [3]

Because Elias did not complete high school or obtain a GED, under an amended law in 2017, he would be unable to attempt to get a barbering license because he did not complete high school. As frustrating as this is to lovers of liberty and entrepreneurs, Elias was equally frustrated, noting that “I don’t feel like anything in my entire schooling from grade school through senior year had anything to do with my barbering skills”[4]. The truth of the matter is neither Elias nor any other student in any public high school learned the skills necessary to be barber. For Tennessee to require a high school degree in order to obtain a “certificate of registration as a master barber” is an example of the government prohibiting someone from earning an honest living. It is wrong, unjust, and must be changed.

In addition to being inundated with fear from the barber police, Elias was not afforded any legal representation in his hearing before the administrative law judge and was left to fend for himself – much like he was left to do when his mother passed away and his father abandoned the family, – except this time it was to defend his right to earn a living. In addition to the fines, Elias could face a Class A misdemeanor, which could impose a penalty of up to 11 months and 29 days in jail – all for working without a government permission slip.

The Declaration of Independence reminds us of our inalienable rights to life, liberty, and the pursuit of happiness. These are rights that cannot be infringed upon – and this is exactly what is happening to Elias. His rights to ensure his own happiness and to secure his own liberty, as well as his right to earn an honest living and provide for his family, are being grossly trampled upon by an overreaching government that has no business or constitutional authority to do so. It is time for a change to licensing requirements and it is imperative for states to get out of the way of small business owners and entrepreneurs. Until these changes are enacted, thousands of people like Elias will face the burden of a government that is anti-business and in favor of arbitrary “protections” that effectively monopolize industries. This is not the American way…
Joe is a political science/pre-law major at the College of Arts and Sciences, Seton Hall University, Class of 2018.

http://reason.com/archives/2018/01/19/barber-cops-bust-high-school-dropouts

[1] http://ij.org/issues/economic-liberty/occupational-licensing/

[2] http://ij.org/report/license-to-work/

[3] http://reason.com/archives/2018/01/19/barber-cops-bust-high-school-dropouts

[4] Ibid.

Posted by Mario Damasceno.

In mid-February of 2015, federal prosecutors investigated United Airlines and its close relation with then chairman of the Port Authority of New York and New Jersey, David Samson. The investigation arose shortly after Samson’s resignation, resulting from emails released that showed aids to Governor Chris Christie had intentionally organized lane closures on the George Washington Bridge. This is particularly significant because during his time in office, Samson would spend his weekends in Aiken, SC, which was located 50 miles from the Columbia, South Carolina airport, however, United never initially offered that route from its New Jersey hub.

The New Jersey paper known as the Record reported, “Federal aviation records show that during the 19 months United offered the non-stop service, the 50-seat planes that flew the route were, on average, only about half full,” and “was reportedly money-losing,” (The Economist). This, in turn, lead to the route being named, “The Chairman’s Flight.” The route itself “left United Airlines’ Newark hub each Thursday night bound for Columbia, S.C. On Monday mornings, United Express flew back to Newark,” (Bloomberg Business). Furthermore, federal prosecutors argued that, not by coincidence, “United cancelled the flight on April 1st, 2014—just three days after Mr. Samson resigned from the Port Authority” (The Economist).

The entire situation is worth looking into, and in fact, the Port Authority along with United Airlines have been issued subpoenas examining the communication between David Samson and the airline. Mary Schiavo, a former federal prosecutor and Department of Transportation inspector general stated, “If United realized they were offering this flight to curry favor with a public official, then United’s in the soup—it’s a bribe,” (Bloomberg).

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

Bachman, Justin. “Did United Put a Whole Route in the Sky for One Very Important Passenger?” Bloomberg Business. N.p., 25 Feb. 2015. Web. 27 Oct. 2015. .

Gulliver. “The Chairman’s Flight.” The Economist. N.p., 10 Feb. 2015. Web. 27 Oct. 2015. .

“United Airlines: The Chairman’s Flight.” Reinventing the Company 12 Sept. 2015: n. pag. Web. 27 Oct. 2015. .