Legal Environment of Business, Codes Compliance and Discrimination

Question 1: Compliance

The company is a midsized software company that publicly trades stock.  The company’s primary business is selling inventory software to major retailers.  However, the company has started producing software for the military.  Buyers from the military have asked for gifts in order to sway procurement decisions.  There is little difference between vendors, so the buyers are hinting that sales perks may make the difference in the selection process.  This environment opens up the company to several different legal liabilities, and the compliance department is tasked with producing a plan to avoid major issues.  

The first issue is that the sales team are considered agents of the company, and “Under the doctrine of respondent superior, a corporation may be held criminally liable for the illegal acts of its directors, officers, employees, and agents” (Corporate Criminal 2).  However, the law requires these agents to be acting within the purview of their job.  Therefore, the company will send out a memo clearly detailing the job tasks of the sales team.  In this memo, the company will clearly state all salespeople are to follow all state and federal laws, and that the company forbids the processing of bribes, kickbacks or payoffs in exchange for business.  The law also requires that the company directly benefited from the acts in order to be charged.  We in the compliance department believe that this official memo, which will come from human resources, require an employee receive and read receipt with signature, and which will be placed in each employees’ human resources file.

These acts will demonstrate that salespeople are not acting on the company’s behalf or according to their job description.  Likewise, it will show that the company is not seeking to profit from these unethical and illegal practices.  By requiring employees to follow the law, we will protect the company from legal action in this case. 

However, other interpretations of the law and the idea of corporate benefit may lead to problems for the company.   The Department of Justice is actively cracking down on corporate crime and crime in the procurement process.  The Department of Justice is tasked with “protecting the integrity of our free economic and capital markets; (2) protecting consumers, investors, and business entities that compete only through lawful means” (Corporate Criminal 4).  In order to show the Justice Department, we are in compliance with their actions, we will report each of the requests for bribes and perks from the procurement official to the appropriate section of the Justice Department.  Sales people will be required to pass on the requests to their managers, who will pass on the report to the compliance division.  From that moment, the compliance division will report the briber request to the Justice Department.  This will demonstrate the company is not engaged in soliciting these bribes, and that we support the Justice Department and the legal actions of the market.  

The company will also run a full audit of its compliance programs and will make the compliance audit report, and any changes that are made to it because of the audit part of the public record.  The compliance program will be sent to all stakeholders, as well as to the Department of Justice.  Legal practice reveals that “the existence and effectiveness of the corporation's pre-existing compliance program (Corporate Criminal 4) is a key when the Justice Department deliberates actions against corporations.  The compliance audit and the public sharing of the audit and changes with all stakeholders will ensure that the company has demonstrated its commitment to legal compliance. 

Question 2: Illegal Immigration Employment

Another area of the law that all companies must follow is in the area of hiring and employment processes and practices.  Not only must the company demonstrate an equal opportunity to all applicants (including LGBTQ members in corporations), but it must also demonstrate that it is following all immigration laws and immigration paperwork requests.  Many companies hire illegal immigrants because of the cost savings in terms of wages and benefits; however, these hires are against the law.   

The first set of federal laws that can resolve the illegal alien situation that the company must adhere to deal with the Fair Labor Standards Act which “regulates minimum wages, overtime hours, and child labor” (Issues 3).  Very often, when companies hire illegal immigrants, they pay them less that the legal wage, or deny them legal overtime.  Companies hiring employees must review all hires to ensure they are legal immigrants or legal residents of the United States.  Second, all companies must ensure that every employee’s paperwork is correct and on the record.  Another way to deal with illegal immigrants working at below minimum wage levels is to make sure that each employee is receiving the correct minimum wage, and gets all overtime pay they have earned.  These reports will be shared with the Department of Labor. 

In addition to following all applicable federal employment law, every company will ensure that all state laws are complied with.  Reports will also be shared with state employment regulators.  Title VII of the Civil Rights Act remains one of the key federal laws that has supremacy over state laws and which the company must comply with (Issues).  Title VII makes sure that the company does not discriminate in its hiring or employment decisions.

Works Cited

Corporate Criminal.  “Corporate Compliance Programs”, 2018. (Course Handout).

Issues.  “Issues in Employment Law”, 2018. (Course Handout).