Dracca sold much of its
feeding equipment line to a retailer known as Baby Boutique (BB). BB was a
partnership formed between friends Beth Brown, Silvia Gray, and Valerie White.
BB was behind on its payments and owed Dracca over $500,000 for delivered
feeding equipment. Eventually, Dracca sued BB and obtained a judgment for
$500,000 in Dracca’s favor.
The board of directors
for Dracca decided to seek enforcement of the judgment against Silvia Gray,
acting on a tip that Ms. Gray had just inherited a large sum of money and that
the other partners had no personal assets. As it turned out, Ms. Gray had
sufficiently dispersed her inheritance money and did not have the funds to pay
the judgment. Dracca incurred substantial attorney fees in attempting to
collect its judgment from BB.
The accounting manager
overseeing the BB account had been with Dracca for 20 years. His name was
Martin Long, and he started with the company as a part-time bookkeeper. Long
received numerous positive job evaluations over the first 15 years with the
company, and he was promoted several times until he reached his current
position of accounting manager five years ago. Long and his life partner, Will
Short, receive medical, dental, and life insurance benefits as part of Long’s employment
package with Dracca.
Long reported to the Director of Accounting, Mary Smith, who recently came
onboard to Dracca from another company. Smith took away a good portion of
Long’s responsibility and froze his pay. She was heard to say, “This company
does not need to be burdened with paying for same-sex marriages.” She posted
Bible verses in the breakroom and had a screensaver that read, “Marriage is
between a Man and a Woman.” Long quit under the new working conditions.
One of Long’s
subordinates, Kate Katz, reported Long’s treatment to the EEOC. Kate was
an at-will employee who had been with Dracca six years. In response to
the EEOC report, Dracca fired Kate.
The sales department was
charged with hiring new salespeople for its feeding equipment line to generate
more retail and end-user customers. May Hernandez was the lead
salesperson for the line, and was responsible for making the final hiring
decisions. May interviewed thirty candidates for six positions, and hired
only women with children, stating that women, as mothers, made better
salespeople for the line. After this hiring session, Dracca noticed a
significant decrease in male applicants.
- Can Dracca seek to recover from Silvia Gray
individually on the judgment for BB partnership? Why or why not? Use legal
principles from the readings to support your findings.
- Using the Business Judgment Rule, did the board of
directors fulfill its duty of care to shareholders in suing Silvia Gray
individually for the BB judgment? Why or why not?
- Can Long sue Dracca for employment discrimination? Can
Long argue constructive discharge in this instance? Use legal principles
and case law from the readings to support your conclusions.
- Can Dracca fire Kate? Why or why not? Will
the court consider any claims of retaliation in this instance?
- What are the legal and ethical ramifications for Dracca
from Hernandez’s action in hiring only women? Can it be argued that
being a woman with children is a bfoq for the position? Why or why
- What actions (internal and external) do you recommend
to Dracca to remedy the ethical and legal considerations of this scenario?
Be specific and detailed, and be sure to base recommendations on relevant
legal and ethical principles.
-In addition to
Instructions: In light of these
facts, please respond to the following questions using course material and
credible outside research to support your findings. Please submit findings in a
3- page paper using APA format (introduction,
conclusion, references, citations).
Course book:Bagley, C. (2012). Managers and the Legal Environment: Strategies for the 21st Century
(7th ed). Cengage Learning.