Question Description
The CEO of Steadfast, Inc. learns that financially, the New Hampshire company is in trouble. Steadfast produces many crafts and furniture, made of wood and other natural components such as stone. The company has recently opened a smaller operation with only 50 employees in Illinois. That operation is known as Gifted (trade name) but it is part of Steadfast. The Illinois employees who create the crafts in Gifted were all trained in New Hampshire by the Steadfast employees. A good number of the Steadfast employees have designed the crafts and furniture. There are 3,000 employees, all local, who work in manufacturing, assembly and operations and most have done so for decades.

However, the company is losing money. It has to triple sales in two years to remain competitive. Some of the costs could be saved if the New Hampshire company base were permanently closed and all operations and company presence shifted to Illinois. There is a larger workforce available for future growth there and there are many suppliers who do a lot of business in Midwestern Cities and would cut costs of materials. Since the New Hampshire company is in a rural area, there are not many job opportunities for the employees. If the New Hampshire business closes its doors, nearly all would be unemployed for the long term and the local economy, which also benefits from taxes paid by Steadfast Inc (for schools and so forth), would also suffer. Professional financial analysts have predicted the company would do very well if it shut down the New Hampshire business and shifted everything to Illinois. The financial analysts have also advised, however, that there is not enough money to ‘move’ even one-third of the employees to Illinois because the company is now losing money. The CEO is not personally wealthy and knows that most employees, with strong ties to the community, would probably not even want to go. The financial analysts have dismal predictions for the ability of Steadfast to keep doing business if their recommendation is not followed and the New Hampshire company continues. But the CEO, who has headed the company for 25 years, looks at the employees like family. The CEO could also keep the Steadfast business running and hope that in two years, sales are tripled. The employees are aware of the need to increase profits dramatically. All the employees are anxious to put in extra work and do what it takes. Assume the CEO decides to keep the business running but after one year, the company (included the Gifted branch business) has to file for bankruptcy, meaning many creditors are not paid and the shareholders do not collect anything. Did the CEO make the right decision?

Your task: Provide an ethical analysis as follows:. Would utilitarianism have led the CEO to the same decision (keep the company running)? Would Kant have done what the CEO did (kept the company running)?.

Be sure to review and use the ethics notes document on the module for Law and Ethics and in using the relevant ethical principles and concepts, incorporate relevant facts in your analysis. You may briefly add your own view as CEO (using any other approach) at the end but you will only receive credit for application of the above two approaches. There is a sample problem analysis on Canvas that offers samples of legal analysis and ethical analysis. Recommended Page limit: One page, single-spaced. Estimated length for concise writers: two paragraphs, 7 sentences per paragraph, still probably over half a page. IF you write more, I will read it (ie 2 pages) but make sure your work is organized, not repetitive and so forth.

This is a sample answer for problem analysis. The first part shows an answer addressing a legal analysis request. The second part shows an answer addressing a request for ethical analysis. Be sure to note when you are doing the problem analysis whether the request is for a legal analysis or an ethical analysis or both. Later in the course, you might be asked to do both. Marie joins Ace Gym and signs a contract for membership with an exculpatory clause that states she waives (gives up) any right to sue Ace for any injury resulting from negligence by assuming the risk that injuries may occur due to a member’s personal health, misuse of equipment by the member or misuse of equipment by other members. One day, Marie trips over a barbell left on the floor, which should have been replaced in the barbell stack/display. The gym manager does an internal investigation and concludes, honestly, that the barbell was not left on the floor by the staff, nor was it brought to the attention of the staff, which had checked the area and found nothing on the floor an hour before the accident. 1. Does Marie have a strong legal case? The case is probably weak. An exculpatory clause is used in contracts to release one party from being sued for an injury by the other party (pp.304-305). Such clauses are usually enforceable. There are four exceptions to enforceability, 1gross negligence/intentional tort/ 2public interest activity/3 unequal bargaining,4 not clearly written/visible. The main issues here would be the absence of gross negligence, such as staff seeing the barbell on the floor and doing nothing because they didn’t want to bother. Gym membership is not in the public interest. A school would be. Assuming the clause was clear, Marie’s case is weak. [NOTE: legal definitions, legal concepts used, textbook pages identified, explanation includes concrete examples, both of gross negligence and of public interest]. Further note: an answer that stated: Marie has a right to sue since the legal system is open to everybody (see chapter 3) and businesses have a lot of insurance. Besides, the lawsuit will make Ace Gym give its employees better training. So she has a strong case. [This answer shows no reflection on the legal issues, no use of the relevant section of the textbook and receives zero (0) credit. 2. Is Ace Gym ethical in using an exculpatory clause? Use utilitarianism and Kant/deontology. A. For utilitarianism, there must be social utility that offers happiness and the goal is to maximize happiness in use of the social utility while minimizing harm. Gyms have great social utility because they keep people healthy and happy and this makes for happier employees and lower healthcare costs. An exculpatory clauses maximizes happiness by freeing the gyms from endless lawsuits. There are bound to be lots of injuries in gyms, but many would not be the result of gross negligence (staff being reckless) but rather the inability to follow every member and make sure no one is dropping a towel, not cleaning up spilled water from a bottle, leaving a treadmill running. But gyms should minimize harm by having staff check on safe premises, maybe every hour, to make sure nothing is on the floor that could be a hazard and so forth. B. For Kant, the universal rule has to be found by first considering empathy (who are the stakeholders) and then applying reason. Injured members will not be at fault, and their dependents may suffer because they might even be out of work if the injury is serious. But people are also better off if they develop a sense of risk avoidance and personal responsibility so that they are more careful. The gym, of course, employs people and if everyone could sue, the gyms might go out of business. Caring for others shows empathy, but the use of reason recognizes that a universal rule requiring all property owners to be responsible for all injuries is not reasonable if the owner did not cause the harm. Another universal rule, though, is keeping promises if they are made freely and if the promises are fair. The gym members sign a contract agreeing not to sue for negligence. The universal rule might also be to assume responsibility for accidents that they might be avoided by heightened awareness in situations where oversight of all hazards is challenging. NOTE: Both responses use both the handout on ethics on Canvas and may make some use of Chapter 2. Chapter 2, however, is very general, so the notes on ethics document on Canvas module for law and ethics is essential since it provides the full framework for ethical analysis. What is also good in the sample answers for ethical analysis is that both (the one on utilitarianism and the one on Kant) set out the ethical framework, formula in full and then apply it by using specific facts from the problem and showing why or how those facts matter. Additional Note to students: In contrast, an answer that said, The clause is ethical under utilitarianism because it maximizes happiness of the members and the gym owners by avoiding lawsuits, which also minimizes harm because the price of gym membership stays low. That answer does not use the full utilitarianism formula. The social utility is not identified. How happiness is maximized is not really clear (fewer lawsuits saves costs, what else?). Finally, minimizing harm is not addressed. Instead, the idea of maximizing happiness is confused with minimizing harm. Who is harmed by the inclusion of this kind of clause? So there is no evidence that the ethical theory/framework for utilitarianism was used and therefore no evidence that approach is understood or that there was any reflection on its implementation. Be sure to make use of the notes on ethics document on the Canvas module for law and ethics.