CHAPTER 14 MEET YOUR LEGAL, ETHICAL, & SOCIAL OBLIGATIONS February 12, 2014ENTREPRENEURSHIP (Ms....

CHAPTER 14MEET YOUR LEGAL, ETHICAL, & SOCIAL

OBLIGATIONS

April 10, 2023 ENTREPRENEURSHIP (Ms. Hawkins) 1

This chapter describes the importance of fulfilling legal, ethical, and social obligations.

Laws and regulations that affect businessesGuidelines for establishing an ethical workplaceBusiness response to changes in society


OBLIGATIONS


UNDERSTAND YOUR LEGAL REQUIREMENTS

Employees

Suppliers

Customers

As an entrepreneur, you will have to become familiar with the government regulations that affect your business dealings:

Know when to contact a lawyer!


OBLIGATIONS


Sherman Act (discussing prices with competitors)

To make sure that competition is fair, federal, state, and local governments have enacted various laws (antitrust legislation).

Clayton Act (requirement to purchase one good in order to be able to buy another good)

Regulations That Promote Competition



OBLIGATIONS


Robinson-Patman Act (charge different prices to different groups of non-retail consumers)

To make sure that competition is fair, federal, state, and local governments have enacted various laws (antitrust legislation).

Wheeler-Lea Act (unfair or deceptive business practices--advertising)




OBLIGATIONS


Justice Department (the Antitrust Division takes legal action against businesses involved in monopoly.)

Gov’t Agencies That Protect Competition There are two major government agencies that make sure competition remains fair:

Federal Trade Commission (administers most laws dealing with fair competition)




OBLIGATIONS


Price setting by competitors

Gov’t Agencies That Protect Competition The Federal Trade Commission monitors such activities as:

False or misleading advertising

Regulations That Promote CompetitionUNDERSTAND YOUR LEGAL REQUIREMENTS

Price discriminationMisrepresentation about the quality, composition, or place of origin of a product


OBLIGATIONS


Patent (sole right to produce, use, and sell an invention for 20 years as of June 1995)

Laws That Protect Businesses Three special gov’t regulations give legal rights to creators of inventions, literary or artistic works, and brand names

Copyright (exclusive publication, production, sale, or distribution of a literary or artistic work for 70 years after the death of the author)

UNDERSTAND YOUR LEGAL REQUIREMENTSRegulations That Protect Businesses

and the Public

Hawkins, Denise A

The patent term changed from 17 years to 20 years as of June 1995: http://www.uspto.gov/patents/law/aipa/pta/patent_term_guarantee.jsp


OBLIGATIONS


Trademark (name, symbol, or special mark that can be used only by certain businesses)

Laws That Protect Businesses Three special gov’t regulations give legal rights to creators of inventions, literary or artistic works, and brand names.

Examples are Band-Aid™ and Kleenex™


and the Public


OBLIGATIONS


Licenses

Laws That Protect Consumers Several types of gov’t regulations protect consumers:

Zoning Laws


Consumer Protection Laws

Regulations That Protect Businesses and the Public


OBLIGATIONS


Beauty Salons

Laws That Protect Consumers… State and local governments require some businesses to have licenses:

Restaurants


Health and Fitness Center



OBLIGATIONS


Residential

Laws That Protect Consumers… Local governments often establish zoning regulations that control what types of buildings can be built in what areas:

Commercial


Multiple Purpose



OBLIGATIONS


Food and Drug Administration (FDA)

Laws That Protect Consumers… A variety of laws and government agencies protect the public (consumer laws):

Consumer Product Safety Act of 1972


and the Public


OBLIGATIONS


The FDA is a government agency established in 1906 with the passage of the Federal Food and Drugs Act.

The agency oversees food, drugs, cosmetics, animal food, dietary supplements, medical devices, biological goods, and blood products.

According to the Sanitation Defect Levels Handbook the FDA allows a certain amount of impurities in our food.



OBLIGATIONS


Can you name recent food issues concerning the FDA?

• Spinach (Salmonella)

• Peanut Butter (Salmonella)

• Cantaloupes

• Pet Food


ConAgra Foods Inc. recalled Peter Pan peanut butter and other peanut items.

The CDC said in a March 7, 2007 statement that 425 people in 44 states were infected with the strain of salmonella also found in the peanut products.

The CDC said a salmonella outbreak potentially linked to spinach produce, sickened at least 172 people in 18 states in October 2006.

Castle Produce recalled roughly 2,560 cartons of cantaloupes delivered on or after Feb. 16 to wholesalers in California for distribution in the western states. The Dole Fresh Fruit Co. recalled 6,100 cartons of cantaloupes between Feb. 5 and Feb. 8 2007.

Although the FDA reports only 16 confirmed deaths, 4,427 pet deaths have been reported to the Pet Connection Blog database. Contamination is due to melamine, a chemical used to produce durable, heat-resistant plastic.


OBLIGATIONS



http://www.cfsan.fda.gov/~lrd/pestadd.html

The FDA is responsible for such things as the former food pyramid (currently the food plate) and nutrition food labels.

The Center for Food Safety and Applied Nutrition, one of six product-oriented centers of the FDA, provides free pamphlets on food and nutrition.

http://www.cfsan.fda.gov/list.html


OBLIGATIONS



FORMERFOOD

PYRAMID


OBLIGATIONS



THE NEWFOODPLATE

The food pyramid now belongs to the ancient world as of Nov. 21, 2011.The new wonder of the modern age of healthy eating is the "food plate," a graphic that represents portions of desirable foods such as fruits and vegetables on a plate that nutritionists hope will be easier to understand

Read more: http://www.choosemyplate.gov/


OBLIGATIONS



OBLIGATIONS


Consumer Product Safety Act of 1972The U.S. Consumer Product Safety Commission (CPSC) is an independent federal regulatory agency created by Congress in 1972. (http://www.cpsc.gov/cpscpub/pubs/178.html)

They protect the public against unreasonable risks of injuries and deaths associated with consumer products.• Report an unsafe product• Report a product-related injury• Find out whether a product has been recalled • Get information on what to look for when buying a

consumer product • Receive information about ordering CPSC safety

publications


OBLIGATIONS


Consumer Product Safety Hotline


OBLIGATIONS


Hiring

The government has enacted laws that protect employees in various areas:

Firing

Regulations That Protect EmployeesUNDERSTAND YOUR LEGAL REQUIREMENTS

Time Away From Work

Working Conditions

Minimum Wages ($5.15 per hour in GA)


OBLIGATIONS


Minimum Wage: Some states are over, under, or at the federal level of $7.25 per hour.

http://www.dol.gov/esa/minwage/america.htm

Alabamanone

Regulations That Protect Employees…UNDERSTAND YOUR LEGAL REQUIREMENTS

Alaska$7.75California $8.00Connecticut $8.25

Florida$7.67

Hawaii$7.25Kansas$7.25Louisiana none

Michigan$7.40Oregon$8.80Georgia

$5.15


OBLIGATIONS



OBLIGATIONS


Subminimum WageThere some other employees who can be paid at hourly rates below the minimum wage according to the Fair Labor Standards Act (FLSA). Young workers under 20, workers who earn tips, and some other categories of employees can be legally paid at rates below the hourly minimum wage according to the Fair Labor Standards Act (FLSA).

Regulations That Protect Employees…UNDERSTAND YOUR LEGAL REQUIREMENTS


OBLIGATIONS



OBLIGATIONS


Equal Employment Act (age, race, color, national origin, religion, gender)

Workplace Discrimination Laws exist to guard against discrimination in the workplace:

Americans With Disabilities Act (accommodation by employers with 15 or more employees

UNDERSTAND YOUR LEGAL REQUIREMENTSRegulations That Protect Employees…


OBLIGATIONS


Employers must keep safety records.

Safe Working Conditions The Occupational Safety and Health Administration (OSHA) enforces safe working conditions for employees.

Employers must provide workers with special training.



OBLIGATIONS


Family Medical Leave Act Businesses with more than 50 employees must provide up to 3 months (12 weeks) of unpaid leave if a serious health condition affects the employee, their child, or parent or spouse.

Employees must have been employed for 1 year to be eligible.



OBLIGATIONS


Wages The Fair Labor Standards Act establishes the maximum number of hours employees can work. Other provisions include:

Rules for children working under age 16


Regulations That Protect Employees…

Overtime rates

National minimum wage rate ($7.25 per hour)


OBLIGATIONS


Rules for Employing Youth in Restaurants and Quick-Service Establishments under the Fair Labor Standards Act (FLSA)

http://www.dol.gov/whd/regs/compliance/whdfs2a.htm

18 Yrs. no longer subject to the federal youth employment provisions.

16 & 17 Yrs. unlimited hours in any occupation other than hazardous (motor vehicles or power-driven machinery)

14 & 15 Yrs.

•outside school hours; •no more than 3 hours on a school day, including Fridays; •no more than 8 hours on a nonschool day; •no more than 18 hours during a week when school is in session; •no more than 40 hours during a week when school is not in session; •between 7 a.m. and 7 p.m. - except between June 1 and Labor day when the evening hour is extended to 9 p.m.


OBLIGATIONS


Under

14 Yrs.

Children under 14 years of age may not be employed in non-agricultural occupations covered by the FLSA, including food service establishments.

Permissible employment for such children is limited to work that is exempt from the FLSA (such as delivering newspapers to the consumer and acting). Children may also perform work not covered by the FLSA such as completing minor chores around private homes or casual baby-sitting

Rules for Employing Youth in Restaurants and Quick-Service Establishments under the Fair Labor Standards Act (FLSA)

http://www.dol.gov/whd/regs/compliance/whdfs2a.htm


OBLIGATIONS


Learn About Laws Affecting Your Business With the proper information, there are some issues you can handle yourself.Check zoning laws.

UNDERSTAND YOUR LEGAL REQUIREMENTSGet Legal Advice

Check land-use restrictions.

Take a course in business law with Ms. Hawkins

Check the Internet.


OBLIGATIONS


Hire A Lawyer At some point you will need legal advice.

Check with your Chamber of Commerce for a list of lawyers who specialize in small businesses.

UNDERSTAND YOUR LEGAL REQUIREMENTSGet Legal Advice…

Check with other businesses in your community.

Purchase a prepaid legal plan.


OBLIGATIONS


As an entrepreneur, you will have to make ethical decisions about how you run your business.

ETHICAL ISSUES IN BUSINESS


OBLIGATIONS


Ethics is the study of moral choices and values.

It involves choosing between right and wrong.


What Is Ethics?

It means behaving in an honest manner.


OBLIGATIONS


Can something be unethical yet legal? Give some examples... •Slavery was legal until the 13th Amendment abolished it in 1865. • Children were allowed to work in mines, glass factories, and textile and other industries instead of going to school until the Fair Labor Standards Act was passed in 1938. • Women didn't have the right to vote until 1920.


What Is Ethics?


OBLIGATIONS


Workplace Example of Unethical Behaviorhttp://smallbusiness.chron.com/examples-unethical-behavior-workplace-10092.htmlThe COO and primary manager of the company recently hired a relative of his wife's friend. This person is in a 40 hour a week job. However, she is in the office anywhere from only 6 to 7 1/2 hours per day, sometimes less. She does not put any time off on her time card, so she is stealing time/pay. While in the office she is on her cell phone 80 % of the time, she watches movies streamed in through her computer, and will be on the internet shopping/surfing all other times. If she produces 4 hours of honest work a week that is a lot. This situation is bothering a lot of people in the area in which she sits. The complaints have been brought to the department lead from another supervisor. Because of the employee's relationship with the COO, the department lead will not speak to her or deal with the issues.


OBLIGATIONS


Culture And Ethics Different cultures define ethical behavior differently. For example:

Bribes are an accepted business practice in some cultures.


What Is Ethics?

Community elders must sometimes be consulted about business transactions.


OBLIGATIONS


Codes of Ethics Even within the same culture, individuals develop different standards or codes.

A code of ethics is the level of ethical behavior demanded by an individual, a business, or a culture.


What Is Ethics?

Some individuals have very high standards of ethics.


OBLIGATIONS


Business Ethics is the application of the principles of right and wrong to issues that come up in the workplace.

Some believe that entrepreneurs need not concern themselves with ethical issues.


Ethics And Business

Businesses must show consumers that they concern themselves with ethics.


OBLIGATIONS


Establish An Ethical Workplace There are several reasons to do so:

You want to do the right thing.


Ethics And Business…

You want to serve as a role model to others.You want to be proud of the way you conduct yourself, and you want others to be proud of you.Ethical behavior is good for business.


OBLIGATIONS


Establish An Ethical Workplace… There are several reasons to do so:

Employees are more likely to act ethically if they see the business owner acting in an ethical manner.



Acting ethically reduces the possibility of being sued.


OBLIGATIONS


Create A Written Code Of Ethics

Even if you are your business’s only employee, you should create a written code of ethics.



Such guidelines help employees know how to behave in certain situations.


OBLIGATIONS


Entrepreneurs have responsibilities to the people they work and deal with, to the communities in which they are located, and to the environment.

MEET YOUR SOCIAL RESPONSIBILITIES

Economist, Milton Friedman, said “the business of business is business.” What did he mean by this?


OBLIGATIONS


Responsibilities To Customers


Treat all customers with respect.

Social Responsibilities

Be honest.Avoid exaggerating the merits of your products or services.Inform customers of possible dangers of products you sell.Handle all disputes fairly.


OBLIGATIONS


Responsibilities To Suppliers


Treat all suppliers with respect.

Social Responsibilities…

Refuse to participate in dishonest schemes.Give suppliers time to fill your order.

Handle all disputes fairly.

If you change suppliers, let your current supplier know the reasons.


OBLIGATIONS


Respond To Changes In The Workplace In general, become sensitive to the needs of the people who work for you.


Accommodate your employees’ family needs (doctor appt., parent/teacher conference, etc.).

Social Responsibilities…

Consider flexible work hours.


OBLIGATIONS



Protect the environment from pollutants.

Respect The Environment

Conserve nonrenewable resources, such as coal and oil, by using them efficiently.

Environmental Responsibilities

Reduce waste and dispose of waste responsibly.Use environmentally safe and sustainable energy sources.Sell products that cause little damage.


OBLIGATIONS



Respect The Environment…In 1970, the federal government created an agency to enforce the laws governing the environment.

The Environmental Protection Agency (EPA) enforces federal laws concerning clean air and water; businesses handling hazardous materials should become familiar with EPA laws.


OBLIGATIONS


The End!

CHAPTER 14 MEET YOUR LEGAL, ETHICAL, & SOCIAL OBLIGATIONS February 12, 2014ENTREPRENEURSHIP (Ms....

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