Subject: Legal and Ethical Aspects of Management

Question 1:

Borland International, Inc, and Symantec Corporation are software manufacturers based in Silicon Valley in California. A Borland executive, Eugene Wang, was planning to depart Borland to work for Symantec, considered Borland's archrival. Other Borland executives and its board uncovered evidence, on the evening of Mr. Wang's departure, that Mr. Wang had communicated trade secrets to Gordon Eubanks, Symantec's chief executive. Those secrets included future product specifications, marketing plans through 1993, a confidential proposal for a business transaction, and a memo labeled "attorney/client confidential" summarizing questions asked by the Federal Trade Commission (FTC) in its probe of restraint of trade allegations by Microsoft Corporation.

Mr. Wang allegedly used his computer to communicate the information to Mr. Eubanks. The local police and Borland executives worked through the night, using Symantec's own software that reconstructs computer files after they have been destroyed.

When Mr. Wang reported for his exit interview, he was detained and questioned by investigators. Searches authorized by warrant of Mr. Eubanks's two homes and his office uncovered evidence that he had received Mr. Wang's information. Borland filed a civil suit against the two men.

Later during the day of the exit interview, Mr. Wang's secretary, who was transferring with him to Symantec, returned to copy from her computer what she called "personal files." A personnel official watched as she copied the files from her computer but became suspicious and notified plainclothes officers in the Borland parking lot. The secretary, Lynn Georganes, was stopped, and the two disks onto which she had copied materials were taken. The disks contained scores of confidential Borland documents, including marketing plans and business forecasts.

Do the actions of Mr. Wang and Mr. Eubanks fit any computer crime statutes? Was theft involved in their actions? Were Ms. Georganes's actions ethical? Can't a competitor always hire an executive away, and wouldn't Mr. Wang have had most of the information in his head anyway? Can Mr. Eubanks be certain Mr. Wang will not do the same thing to him?

Question 2:

Jason Jones, a 19-year-old U.S. Naval Academy mid-shipman, killed John and Carole Hall when he collided with the rear of their car, which was on the shoulder of the road. Mr. Jones was driving 80-105 mph and talking on a cell phone when he struck the Halls' car.

He was prosecuted for manslaughter and negligent driving. Negligent driving is a misdemeanor and carries a $500 fine. Manslaughter requires proof that the defendant knew the conduct was likely to cause death or severe bodily harm.

Testimony by experts for the prosecution indicated that cell phone use while driving is an enormous distraction. The increased accident rate during cell phone use while driving is placed at between 34 and 300 percent by various experts.

It is not illegal in Maryland to use a cell phone while driving. Can someone be convicted for crimes related to conduct that is not illegal? Was the mens rea present here?

Question 3:

Douglas Margreiter was severely injured in New Orleans on the night of April 6, 1976. He was the chief of the pharmacy section of the Colorado Department of Social Services and was in New Orleans to attend the annual meeting of the American Pharmaceutical Association.

On Tuesday evening, April 6, Mr. Margreiter had dinner at the Royal Sonesta Hotel with two associates from Colorado who were attending the meeting and were staying in rooms adjacent to Mr. Margreiter's in the New Hotel Monteleone. Mr. Margreiter returned to his room between 10:30 P.m. and 11:00 P.M; one of his friends returned to his adjoining room at the same time. Another friend was to come by Mr. Margreiter's room later to discuss what sessions of the meetings each would attend the next day.

About three hours later, Mr. Margreiter was found severely beaten and unconscious in a parking lot three blocks from the Monteleone. The police who found him said they thought he was highly intoxicated, and they took him to Charity Hospital. His friends later had him moved to the Hotel Dieu.

Mr. Margreiter said two men had unlocked his hotel room door and entered his room. He was beaten about the head and shoulders and had only the recollection of being carried to a dark alley. He required a craniotomy and other medical treatment and suffered permanent effects from the incident.

Mr. Margreiter sued the hotel on grounds that the hotel was negligent in not controlling access to elevators and hence to the guests' rooms. The hotel says Mr. Margreiter was intoxicated and met his fate outside the hotel. Is the hotel liable? [Margreiter v New Hotel Monteleone, 640 F2d 508 (5th Cir. 1981))

Question 4:

On the day after Thanksgiving, November 28, 2008, Walmart held a nationwide sale of a limited number of sharply discounted televisions, computers, and video game sets. The "blitz sale" had been advertised heavily in newspapers and on television. At the Valley Stream Walmart store in Long Island, New York, 2,000 shoppers lined up hours before the scheduled 6 A.M. store opening, fanning a line at a place marked by a handwritten sign, "Blitz Line Starts Here." The crowd became unruly at one point and the store manager called the police. However, the police left after concluding that things were under control. Shortly afterwards, at 5 A.M., the crowd broke through the glass doors of the store in a stampede. Jdirnytai Damour, a Walmart maintenance worker, was trampled by the crowd and died from asphyxiation. OSHA has imposed a $7,000 fine on Walmart for its failure to take appropriate steps to control the crowd. Walmart is fighting the fine because it maintains the stampede and the trampling were not foreseeable simply because Walmart held a post-Thanksgiving day blitz sale. Walmart has argued that OSHA is asking it to predict events and that there were, at that time, no laws or rules on crowd control or so-called "blitz sales" (sales in which there are a limited number of items at a reduced price). Walmart's lawyers argued, "If this was a foreseeable event, why did the police feel comfortable in leaving the scene?"

Walmart has already entered into an agreement with the Nassau County, New York, district attorney to adopt crowd control policies at its 92 stores in New York, create a $400,000 fund to compensate trampling victims, and donate $1.5 million to various community organizations in Nassau County. Walmart also implemented crowd-control policies at its stores nationwide. Evaluate the duty, breach of duty, and foreseeability issues in the Long Island stampede. Be sure to discuss whether Walmart breathed any duty to the maintenance worker and why Walmart would push back against the small fine.

Question 5:

Consider the following proposal description:

Attached are an original and two (2) carbon copies of our Proposal No. 620-M-86R covering the subject as agreed upon in your office last Friday, June 20, 1986. Please sign the original and one (1) copy on the lower left corner of page 9 and return to us for our execution. We will return one (1) executed copy for your files.

Again we thank you for selecting us for this project. We assure you it is receiving our best attention. Our Engineering Department is proceeding with the designs, fabrication drawings, and material orders.

We look forward to your receiving the necessary permits.

The "proposal" consists of five pages of typewritten terms, setting forth specifications for the manufacture, assembly, and erection of a television tower and related items, and four pages of preprinted "Terms and Conditions of Sale." The printed portion includes the following relevant terms:

Acceptance of Proposal

This proposal is for immediate acceptance and prior to such acceptance is subject to modification or withdrawal without notice.

Acceptance of this proposal will evidence Buyer's intent that the sale be governed solely by the terms and conditions of this proposal.

Any modifying, inconsistent or additional terms and conditions of Buyer's acceptance shall not become a part of any contract resulting from this proposal unless agreed to in writing by Kline.

Any order or offer by Buyer as a result of this proposal shall not be binding upon Kline until accepted by Kline in writing by an officer of Kline.

If accepted by Kline, this proposal shall constitute the agreement between the Buyer and Kline.

At the bottom of the final page are the following signature spaces:

KLINE IRON & STEEL CO., INC.
     By_________________
     Its (Seller)
GRAY COMMUNICATIONS, INC.
     By_________________
     Its (Buyer)

Is there an offer? When would the earliest acceptance be? (Kline Iron & Steel Co., Inc. v Gray Communications Consultants, Inc., 715 F. Stipp. 135 (D.S.C. 1989)]

Question 6:

Consider the following sequences of offers and acceptance and determine whether in each case there would be a contract

a. September 1, 2010: A mails an offer to B.
September 2, 2010: B receives the offer.
September 3, 2010: A mails a revocation.
September 4, 2010: B mails an acceptance.
September 5, 2010: B receives the revocation.
September 6, 2010: A receives the acceptance.
RESULT:
b. September 1, 2010: A mails an offer to B.
September 2, 2010: B receives the offer.
September 3, 2010: B wires an acceptance.
September 4, 2010: B wires a rejection.
September 4, 2010 (later): A receives the acceptance.
September 5, 2010: A receives the rejection.
RESULT:
c. September 1, 2010: A mails an offer to B.
September 2, 2010: A wires a revocation.
September 3, 2010: B receives the offer.
September 3, 2010: B wires an acceptance.
September 4, 2010: B receives the revocation.
September 5, 2010: A receives the acceptance.
RESULT:

Would your answers be different under the UCC from those under common law?