Would a court be likely to rule that The Big Noodle had good cause to terminate John Paul’s franchise in this situation?

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Take Test: Final ExamLegal Envir Business (40749) LEGL-2064-001-40749-SU-2020 Tests

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Multiple Attempts Not allowed. This test can only be taken once.

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This exam is CLOSED BOOK and

CLOSED NOTES.

Final Exam Information

This multiple-choice, 50 question exam

covers Chapters 16 – 24

QUESTION 1

John Paul decided to open a fast-food pasta restaurant and signed a franchise contract with a national chain called The Big Noodle. The contract required the franchisee to strictly follow the franchisorâ s operating manual and stated that failure to do

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so would be grounds for terminating the franchise contract. The manual set forth detailed operating procedures and safety standards, and provided that a Big Noodle representative would inspect the restaurant monthly to ensure compliance. Nine months after John Paul began operating his restaurant, a spark from the grill ignited an oily towel in the kitchen. No one was injured, but by the time firefighters were able to put out the fire, the kitchen had sustained extensive damage. The cook told the fire department that the towel was â about a foot and a half from the grillâ when it caught fire. This was in compliance with the franchisorâ s manual that required towels be placed at least one foot from the grills. The next day, The Big Noodle gave John Paul notice that the franchise would be terminated in thirty days for failure to follow the prescribed safety procedures. What type of franchise was John Paul’s Big Noodle restaurant?

Distributorship

Chain-style business operation

Manufacturing/Processing

None of the above

QUESTION 2

John Paul decided to open a fast-food pasta restaurant and signed a franchise contract with a national chain called The Big Noodle. The contract required the franchisee to strictly follow the franchisorâ s operating manual and stated that failure to do so would be grounds for terminating the franchise contract. The manual set forth detailed operating procedures and safety standards, and provided that a Big Noodle representative would inspect the restaurant monthly to ensure compliance. Nine months after John Paul began operating his restaurant, a spark from the grill ignited an oily towel in the kitchen. No one was injured, but by the time firefighters were able to put out the fire, the kitchen had sustained extensive damage. The cook told the fire department that the towel was â about a foot and a half from the grillâ when it caught fire. This was in compliance with the franchisorâ s manual that required towels be placed at least one foot from the grills. The next day, The Big Noodle gave John Paul notice that the franchise would be terminated in thirty days for failure to follow the prescribed safety procedures. If John Paul operates the restaurant as a sole proprietorship, who bears the loss for the damaged kitchen?

The customers

The business only

John Paul

The government

2 points Save Answer

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QUESTION 3

John Paul decided to open a fast-food pasta restaurant and signed a franchise contract with a national chain called The Big Noodle. The contract required the franchisee to strictly follow the franchisorâ s operating manual and stated that failure to do so would be grounds for terminating the franchise contract. The manual set forth detailed operating procedures and safety standards, and provided that a Big Noodle representative would inspect the restaurant monthly to ensure compliance. Nine months after John Paul began operating his restaurant, a spark from the grill ignited an oily towel in the kitchen. No one was injured, but by the time firefighters were able to put out the fire, the kitchen had sustained extensive damage. The cook told the fire department that the towel was â about a foot and a half from the grillâ when it caught fire. This was in compliance with the franchisorâ s manual that required towels be placed at least one foot from the grills. The next day, The Big Noodle gave John Paul notice that the franchise would be terminated in thirty days for failure to follow the prescribed safety procedures. If John Paul files a lawsuit against The Big Noodle claiming that his franchise was wrongfully terminated, what is the main factor the court would consider in determining whether the franchisee was wrongfully terminated?

The profit earned by John Paul’s restaurant

Whether there was reasonable notice of the termination

Whether the fire department recommended termination of the contract The franchisorâ s good faith and fair dealing in terminating the franchise

2 points Save Answer

QUESTION 4

John Paul decided to open a fast-food pasta restaurant and signed a franchise contract with a national chain called The Big Noodle. The contract required the franchisee to strictly follow the franchisorâ s operating manual and stated that failure to do so would be grounds for terminating the franchise contract. The manual set forth detailed operating procedures and safety standards, and provided that a Big Noodle representative would inspect the restaurant monthly to ensure compliance. Nine months after John Paul began operating his restaurant, a spark from the grill ignited an oily towel in the kitchen. No one was injured, but by the time firefighters were able to put out the fire, the kitchen had sustained extensive damage. The cook told the fire department that the towel was â about a foot and a half from the grillâ when it caught fire. This was in compliance with the franchisorâ s manual that required towels be placed at least one foot from the grills. The next day, The Big Noodle gave John Paul notice that the franchise would be terminated in thirty days for failure to follow the prescribed safety procedures. Would a court be likely to rule that The Big Noodle had good cause to terminate John Paul’s franchise in this situation?

2 points Save Answer

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No, because John Paul was following the safety procedures

No, because John Paul did his best to put out the fire

Yes, because John Paul should have known that 1.5 feet was too close for a towel to be near a grill despite the franchise contract Yes, because a franchisor can terminate a franchise contract at any time for any reason

QUESTION 5

An association of two or more persons to carry on, as co- owners, a business for profit is

A corporation

A business association

A franchise

A partnership

2 points Save Answer

QUESTION 6

With regard to liability in a partnership, which of the following is FALSE?

If a third party sues an individual partner, that partner has the right to insist that the other partners be joined as defendants and share the burden of any judgment A third party may sue one or more individual partners, without suing all partners, and hold any partners sued fully liable for any judgment Each partner is liable for all other partner’s personal and business debts Newly admitted partners are liable for debts and obligations incurred before they joined the partnership only to the extent of their capital contribution

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QUESTION 7

Which of the following is an advantage of a limited liability company?

members enjoy limited personal liability

limited liability companies with two or more members may elect to be taxed as a corporation or a partnership limited liability companies enjoy flexibility in management and operations

2 points Save Answer

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all of the above are advantages

QUESTION 8

A bridge on a prominent public roadway in the city of Springfield, Ohio, was deteriorating and in need of repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Bridges by Madison LLC, owned and managed by Madison Mason and his wife, May Mason, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Pablo Hand, a local sculptor who specialized in large-scale metal designs, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Bridges by Madison and Hand then entered into an agreement to work together on the bridge project. Bridges by Madison agreed to install and pay for concrete and structural work, and Hand agreed to install the metalwork at his expense. They agreed that overall profits would be split, with 25 percent to Hand and 75 percent going to Bridges by Madison. Hand designed numerous metal pig sculptures that were incorporated into colorful decorative concrete forms designed by May Mason, while Madison Mason performed the structural engineering. The group worked together successfully until the completion of the project. Would Bridges by Madison LLC automatically be taxed as a partnership or a corporation?

Yes

No

It depends on whether or not they opted to be taxed as a corporation

2 points Save Answer

QUESTION 9

A bridge on a prominent public roadway in the city of Springfield, Ohio, was deteriorating and in need of repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Bridges by Madison LLC, owned and managed by Madison Mason and his wife, May Mason, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Pablo Hand, a local sculptor who specialized in large-scale metal designs, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Bridges by Madison and Hand then entered into an agreement to work together on the bridge project. Bridges by Madison agreed to install and pay for concrete and structural work, and Hand agreed to install the metalwork at his expense. They agreed that overall profits would be split, with 25 percent to Hand and 75 percent going to Bridges by Madison. Hand designed numerous metal pig sculptures that were incorporated into colorful decorative concrete forms designed

2 points Save Answer

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by May Mason, while Madison Mason performed the structural engineering. The group worked together successfully until the completion of the project. Is Bridges by Madison LLC member managed or manager managed?

Member managed

Manager managed

Neither

Both

QUESTION 10

A bridge on a prominent public roadway in the city of Springfield, Ohio, was deteriorating and in need of repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Bridges by Madison LLC, owned and managed by Madison Mason and his wife, May Mason, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Pablo Hand, a local sculptor who specialized in large-scale metal designs, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Bridges by Madison and Hand then entered into an agreement to work together on the bridge project. Bridges by Madison agreed to install and pay for concrete and structural work, and Hand agreed to install the metalwork at his expense. They agreed that overall profits would be split, with 25 percent to Hand and 75 percent going to Bridges by Madison. Hand designed numerous metal pig sculptures that were incorporated into colorful decorative concrete forms designed by May Mason, while Madison Mason performed the structural engineering. The group worked together successfully until the completion of the project. Suppose Hand had entered into an agreement to rent space in a warehouse that was close to the bridge so that he could work on his sculptures near the location at which they would eventually be installed. He entered into the contract without the knowledge or consent of Bridges by Madison. In this situation, would a court be likely to hold that Bridges by Madison was bound by the contract that Hand entered?

Yes – when they agreed to work together, this implied that they would agree to be liable for each other’s contracts. Yes – they were all working together for the same project goal No – because joint ventures have less implied and apparent authority to bind their venture than partners do to bind their partnership No – because Bridges by Madison did not know of the contract

2 points Save Answer

QUESTION 11

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QUESTION 11

A bridge on a prominent public roadway in the city of Springfield, Ohio, was deteriorating and in need of repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Bridges by Madison LLC, owned and managed by Madison Mason and his wife, May Mason, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Pablo Hand, a local sculptor who specialized in large-scale metal designs, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Bridges by Madison and Hand then entered into an agreement to work together on the bridge project. Bridges by Madison agreed to install and pay for concrete and structural work, and Hand agreed to install the metalwork at his expense. They agreed that overall profits would be split, with 25 percent to Hand and 75 percent going to Bridges by Madison. Hand designed numerous metal pig sculptures that were incorporated into colorful decorative concrete forms designed by May Mason, while Madison Mason performed the structural engineering. The group worked together successfully until the completion of the project. Suppose that May Mason has an argument with her husband and wants to withdraw from being a member of Bridges by Madison. What is the term for such a withdrawal?

withdrawal

dissociation

dissolution

winding up

2 points Save Answer

True

False

QUESTION 12

Because risk is associated with the potential for higher profits, businesspersons are motivated to choose organizational forms that limit their liability while allowing them to take risks that may lead to greater profits.

2 points Save Answer

QUESTION 13

A corporation formed by a government to serve some public purpose is a

private corporation

public corporation

non-profit corporation

socialist corporation

2 points Save Answer

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QUESTION 14

In order to qualify as an S Corporation, a closely held corporation must meet which of the following criteria?

Must be incorporated in the U.S.

Must be have fewer than 100 shareholders

Must have only one class of stock

Must not have any resident alien shareholders

All of the above

2 points Save Answer

QUESTION 15

Paul wants to start a business selling homemade dog treats. Paul’s top priority is that he alone has complete control over management decisions at all times. Paul should most likely form a:

corporation.

partnership.

limited liability company.

sole proprietorship.

2 points Save Answer

QUESTION 16

Summer Moon is on the board of directors of Do Be Yoga, Inc., which owns a string of yoga studios in Ohio. Moon owns 15 percent of the Do Be Yoga stock and she is also employed as a day care teacher at one of the studios. After the July financial report showed that Do Be Yoga’s day care division was operating at a substantial net loss, the board of directors, led by Marty McBoss, discussed the possibility of terminating the day care operations. Moon successfully convinced a majority of the board that the day care division was necessary to market to the studio’s mostly female clientele. By October, the day care divisionâ s financial losses had risen. The board hired a business analyst, who conducted surveys and determined that the day care operations did not significantly increase membership. A shareholder, John James, discovered that Moon owned stock in KiddieStuffs, Inc., the company from which Do Be Yoga purchased its day care equipment. James notified McBoss, who privately reprimanded Moon. Shortly thereafter Moon and Sunny Sun, who owned 37 percent of Do Be Yoga stock and also held shares of KiddieStuffs, voted to replace McBoss on the board of directors. What duties did Moon, as a director, owe to Do Be Yoga?

Duty of care

Duty of loyalty

2 points Save Answer

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Both of the above

None of the above

QUESTION 17

Summer Moon is on the board of directors of Do Be Yoga, Inc., which owns a string of yoga studios in Ohio. Moon owns 15 percent of the Do Be Yoga stock and she is also employed as a day care teacher at one of the studios. After the July financial report showed that Do Be Yoga’s day care division was operating at a substantial net loss, the board of directors, led by Marty McBoss, discussed the possibility of terminating the day care operations. Moon successfully convinced a majority of the board that the day care division was necessary to market to the studio’s mostly female clientele. By October, the day care divisionâ s financial losses had risen. The board hired a business analyst, who conducted surveys and determined that the day care operations did not significantly increase membership. A shareholder, John James, discovered that Moon owned stock in KiddieStuffs, Inc., the company from which Do Be Yoga purchased its day care equipment. James notified McBoss, who privately reprimanded Moon. Shortly thereafter Moon and Sunny Sun, who owned 37 percent of Do Be Yoga stock and also held shares of KiddieStuffs, voted to replace McBoss on the board of directors. Does the fact that Moon owned shares in Kiddiestuffs establish a conflict of interest?

Yes – directors have a duty to not engage in “self-dealing”

Yes – directors are not allowed to own stock in other companies No – directors can own stock in any company they want

No – directors have no responsibility to act in the best interest of the corporation

2 points Save Answer

QUESTION 18

Summer Moon is on the board of directors of Do Be Yoga, Inc., which owns a string of yoga studios in Ohio. Moon owns 15 percent of the Do Be Yoga stock and she is also employed as a day care teacher at one of the studios. After the July financial report showed that Do Be Yoga’s day care division was operating at a substantial net loss, the board of directors, led by Marty McBoss, discussed the possibility of terminating the day care operations. Moon successfully convinced a majority of the board that the day care division was necessary to market to the studio’s mostly female clientele. By October, the day care divisionâ s financial losses had risen. The board hired a business analyst, who conducted surveys and determined that the day care operations did not significantly increase membership. A shareholder, John James, discovered that Moon owned stock in KiddieStuffs, Inc., the company from which Do

2 points Save Answer

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Be Yoga purchased its day care equipment. James notified McBoss, who privately reprimanded Moon. Shortly thereafter Moon and Sunny Sun, who owned 37 percent of Do Be Yoga stock and also held shares of KiddieStuffs, voted to replace McBoss on the board of directors. Suppose that Do Be Yoga brought an action against Moon claiming that she had breached the duty of loyalty by not disclosing her interest in Kiddiestuffs to the other directors. What theory might Moon try to use in her defense (although it probably wouldn’t work)?

Preemptive right

Stock warrant

The business judgment rule

The oversight rule

QUESTION 19

Summer Moon is on the board of directors of Do Be Yoga, Inc., which owns a string of yoga studios in Ohio. Moon owns 15 percent of the Do Be Yoga stock and she is also employed as a day care teacher at one of the studios. After the July financial report showed that Do Be Yoga’s day care division was operating at a substantial net loss, the board of directors, led by Marty McBoss, discussed the possibility of terminating the day care operations. Moon successfully convinced a majority of the board that the day care division was necessary to market to the studio’s mostly female clientele. By October, the day care divisionâ s financial losses had risen. The board hired a business analyst, who conducted surveys and determined that the day care operations did not significantly increase membership. A shareholder, John James, discovered that Moon owned stock in KiddieStuffs, Inc., the company from which Do Be Yoga purchased its day care equipment. James notified McBoss, who privately reprimanded Moon. Shortly thereafter Moon and Sunny Sun, who owned 37 percent of Do Be Yoga stock and also held shares of KiddieStuffs, voted to replace McBoss on the board of directors. Now suppose, based on the above example, that Do Be Yoga did not bring an action against Moon. What type of lawsuit might shareholder James be able to bring based on these facts

Shareholder’s derivative suit

Breach of duty suit

Inspection rights suit

Compensation suit

2 points Save Answer

QUESTION 20

Which of the following is a type of fundamental corporate change that must be approved by shareholders?

amendments to the articles of incorporation or by-laws

2 points Save Answer

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a merger or dissolution of the corporation

an increase in the number of shares of stock that the corporation is authorized to issue a sale of all or substantially all of the corporation’s assets

All of the above must be approved by shareholders

QUESTION 21

An agency relationship formed when a third person believes that another person is the principal’s agent and the third person acts to his detriment in reasonable reliance on that belief is known as

agency by agreement

agency by ratification

agency by estoppel

agency by operation of law

2 points Save Answer

QUESTION 22

Which of the following defines whether or not someone is an employee?

An employee is a person who works for, and receives payment from, an employer An employee is a person whose working conditions and methods are controlled by the employer An employee is a person for whose acts and omissions occurring in the scope of employment the employer is liable All of the above are required for someone to be considered an employee

2 points Save Answer

QUESTION 23

Dwight hired Pam to sell vacuum cleaners for the Spiffy Clean Vacuum Company. Their contract stated, â Nothing in this contract shall be construed as creating the relationship of employer and employee.â The contract was terminable at will by either party. Pam financed her own office and staff, was paid according to performance, had no taxes withheld from her checks, and could legally sell products Spiffyâ s competitors. Dwight learned that Pam was simultaneously selling vacuums for the Nothing Sucks like Russ Vacuums, one of Spiffyâ s fiercest competitors. Dwight therefore withheld client contact information from Pam. Pam complained to Dwight that he was inhibiting her ability to sell vacuums for Spiffy. Dwight subsequently terminated their contract. Pam filed a suit in a

2 points Save Answer

Question Completion Status:

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New York state court against Dwight and Spiffy. Pam claimed that she had lost sales for Spiffyâ “and commissionsâ “as a result of Dwightâ s withholding contact information from her. Who is the principal and who is the agent in this scenario?

Dwight is the principal and Pam is the agent

Pam is the principal and Dwight is the agent

Spiffy is the principal and Nothing Sucks is the agent

Spiffy is the principal and Dwight is the agent

QUESTION 24

Dwight hired Pam to sell vacuum cleaners for the Spiffy Clean Vacuum Company. Their contract stated, â Nothing in this contract shall be construed as creating the relationship of employer and employee.â The contract was terminable at will by either party. Pam financed her own office and staff, was paid according to performance, had no taxes withheld from her checks, and could legally sell products Spiffyâ s competitors. Dwight learned that Pam was simultaneously selling vacuums for the Nothing Sucks like Russ Vacuums, one of Spiffyâ s fiercest competitors. Dwight therefore withheld client contact information from Pam. Pam complained to Dwight that he was inhibiting her ability to sell vacuums for Spiffy. Dwight subsequently terminated their contract. Pam filed a suit in a New York state court against Dwight and Spiffy. Pam claimed that she had lost sales for Spiffyâ “and commissionsâ “as a result of Dwightâ s withholding contact information from her. What facts would the court consider most important in determining whether Scott was an employee or an independent contractor?

Whether Pam is â controlled byâ Dwight

The degree of control Dwight has over Pam

Both of the above

None of the above

2 points Save Answer

QUESTION 25

Dwight hired Pam to sell vacuum cleaners for the Spiffy Clean Vacuum Company. Their contract stated, â Nothing in this contract shall be construed as creating the relationship of employer and employee.â The contract was terminable at will by either party. Pam financed her own office and staff, was paid according to performance, had no taxes withheld from her checks, and could legally sell products Spiffyâ s competitors. Dwight learned that Pam was simultaneously selling vacuums for the Nothing Sucks like Russ Vacuums, one of Spiffyâ s fiercest competitors. Dwight therefore withheld client contact information from Pam. Pam complained to Dwight that he was inhibiting her ability to sell vacuums for Spiffy. Dwight subsequently terminated their contract. Pam filed a suit in a

2 points Save Answer

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New York state court against Dwight and Spiffy. Pam claimed that she had lost sales for Spiffyâ “and commissionsâ “as a result of Dwightâ s withholding contact information from her. How would the court most likely rule on Pamâ s employee status?

Pam is an employee of Dwight/Spiffy

Pam is an independent contractor for Dwight/Spiffy

There is no employee status/relationship between Dwight/Spiffy and Pam Dwight is not an employee of Spiffy and therefore couldnâ t hire Pam

QUESTION 26

Dwight hired Pam to sell vacuum cleaners for the Spiffy Clean Vacuum Company. Their contract stated, â Nothing in this contract shall be construed as creating the relationship of employer and employee.â The contract was terminable at will by either party. Pam financed her own office and staff, was paid according to performance, had no taxes withheld from her checks, and could legally sell products Spiffyâ s competitors. Dwight learned that Pam was simultaneously selling vacuums for the Nothing Sucks like Russ Vacuums, one of Spiffyâ s fiercest competitors. Dwight therefore withheld client contact information from Pam. Pam complained to Dwight that he was inhibiting her ability to sell vacuums for Spiffy. Dwight subsequently terminated their contract. Pam filed a suit in a New York state court against Dwight and Spiffy. Pam claimed that she had lost sales for Spiffyâ “and commissionsâ “as a result of Dwightâ s withholding contact information from her. Which duty that Dwight owed Pam in their agency relationship has probably been breached?

Duty to cooperate with an agent

Duty to assist the agent in performing duties

Duty to not take actions that prevent performance

All of the above

2 points Save Answer

QUESTION 27

You work for a really horrible employer and decide you no longer want to be employed by them. In order to terminate the employer/employee relationship, what must you do?

Mutually agree to terminate the relationship

Inform the employer you wish to terminate the relationship either through your words or your actions Get permission from the employer in order to terminate the relationship None of the above

2 points Save Answer

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QUESTION 28

Mike began working as sales representative for Amyâ s Arts in 2018. Sales constituted 90 percent of Mikeâ s work time. Mike worked an average of fifty hours per week but received no overtime pay. In June 2019, Mikeâ s new supervisor, Cliff, claimed that Mike had been inflating his reported sales calls and required Mike to submit to a polygraph test. Mike reported Cliff to the U.S. Department of Labor, which prohibited Amyâ s Arts from requiring Mike to take a polygraph test for this purpose. In August 2019, Mikeâ s wife, Grace, fell from a ladder and sustained a head injury while employed as a full-time Roofer. Mike presented Amyâ s Artâ s Human Resources Department with a letter from his wifeâ s physician indicating that she would need daily care for several months, and Mike took leave until December 2019. Amyâ s Arts had sixty-four employees at that time. When Mike returned to Amyâ s Arts, he was informed that his position had been eliminated because his sales territory had been combined with an adjacent territory. Would Mike have been legally entitled to receive overtime pay at a higher rate?

Yes, Mike should be eligible to earn time and a half for any time worked above 40 hours a week Yes, Mike should be eligible for overtime pay for any hours worked above 8 hours a day No, since Mike is an outside sales representative, he is exempt from the overtime rules established by the Fair Labor Standards Act No, since Mike only worked 50 hours a week

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QUESTION 29

Mike began working as sales representative for Amyâ s Arts in 2018. Sales constituted 90 percent of Mikeâ s work time. Mike worked an average of fifty hours per week but received no overtime pay. In June 2019, Mikeâ s new supervisor, Cliff, claimed that Mike had been inflating his reported sales calls and required Mike to submit to a polygraph test. Mike reported Cliff to the U.S. Department of Labor, which prohibited Amyâ s Arts from requiring Mike to take a polygraph test for this purpose. In August 2019, Mikeâ s wife, Grace, fell from a ladder and sustained a head injury while employed as a full-time Roofer. Mike presented Amyâ s Artâ s Human Resources Department with a letter from his wifeâ s physician indicating that she would need daily care for several months, and Mike took leave until December 2019. Amyâ s Arts had sixty-four employees at that time. When Mike returned to Amyâ s Arts, he was informed that his position had been eliminated because his sales territory had been combined with an adjacent territory.

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What is the maximum length of time Mike would have been allowed to take leave to care for his injured spouse?

Mike is not eligible for any time to take care of his spouse

Under the Family and Medical Leave Act, since Amyâ s Arts have over 50 employees, Mike is eligible for 12 weeks of unpaid leave to care for his injured wife Under the Family and Medical Leave Act, Mike is eligible for two years of paid leave Under the Family and Medical Leave Act, Mike is ineligible for leave since he only worked there for a year

QUESTION 30

Mike began working as sales representative for Amyâ s Arts in 2018. Sales constituted 90 percent of Mikeâ s work time. Mike worked an average of fifty hours per week but received no overtime pay. In June 2019, Mikeâ s new supervisor, Cliff, claimed that Mike had been inflating his reported sales calls and required Mike to submit to a polygraph test. Mike reported Cliff to the U.S. Department of Labor, which prohibited Amyâ s Arts from requiring Mike to take a polygraph test for this purpose. In August 2019, Mikeâ s wife, Grace, fell from a ladder and sustained a head injury while employed as a full-time Roofer. Mike presented Amyâ s Artâ s Human Resources Department with a letter from his wifeâ s physician indicating that she would need daily care for several months, and Mike took leave until December 2019. Amyâ s Arts had sixty-four employees at that time. When Mike returned to Amyâ s Arts, he was informed that his position had been eliminated because his sales territory had been combined with an adjacent territory. Under what circumstances would Amyâ s Arts have been allowed to require an employee to take a polygraph test according to the Employee Polygraph Protection Act?

Only if Amyâ s Arts was investigating theft, embezzlement or theft of trade secrets They can use a polygraph test in any circumstances

They can only use a polygraph test in hiring decisions

They can never use a polygraph test

2 points Save Answer

QUESTION 31

Mike began working as sales representative for Amyâ s Arts in 2018. Sales constituted 90 percent of Mikeâ s work time. Mike worked an average of fifty hours per week but received no overtime pay. In June 2019, Mikeâ s new supervisor, Cliff, claimed that Mike had been inflating his reported sales calls and required Mike to submit to a polygraph test. Mike reported Cliff to the U.S. Department of Labor, which prohibited Amyâ s Arts from requiring Mike to take a polygraph test for this

2 points Save Answer

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purpose. In August 2019, Mikeâ s wife, Grace, fell from a ladder and sustained a head injury while employed as a full-time Roofer. Mike presented Amyâ s Artâ s Human Resources Department with a letter from his wifeâ s physician indicating that she would need daily care for several months, and Mike took leave until December 2019. Amyâ s Arts had sixty-four employees at that time. When Mike returned to Amyâ s Arts, he was informed that his position had been eliminated because his sales territory had been combined with an adjacent territory. Would Amyâ s Arts likely be able to avoid reinstating Mike under the key employee exception?

Yes, since he was a sales representative

Yes, since he worked 50 hours a week

No, since he was unlikely to be in the top ten percent of the organization â ” he had a sales territory and reported to a supervisor No, since refused to take a polygraph

QUESTION 32

Neena, an African American woman, was hired by 10tv News to be a costumerâ s assistant for the evening news. One of her essential job duties was to shop for specific styles for the newscasters so that they would look professional. She had to take detailed measurements and purchase and alter clothing for each episode of the news. The newscasters then tried on different outfit combinations in order to find the best look. During these try-on sessions, the three male newscasters told lewd and vulgar jokes and made sexually explicit comments and gestures. They often talked about their personal sexual experiences and fantasies during various stages of undress as Neena tried to ensure clothing fit. During the fittings, Neena never complained that she found the newscastersâ conduct offensive. After five months, Neena was fired because she could not alter the clothing fast enough to keep up with the demands of the evening newscasters. She filed a suit against 10tv, alleging sexual harassment and claiming that her termination was based on racial discrimination. Would Neenaâ s claim of racial discrimination be for intentional (disparate-treatment) or unintentional (disparate- impact) discrimination?

Intentional (disparate treatment)

Unintentional (disparate impact)

Both of the above

None of the above

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QUESTION 33

Neena, an African American woman, was hired by The Scandal

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Show to be a costumerâ s assistant for their evening broadcast. One of her essential job duties was to shop for specific styles for the hosts so that they would look professional. She had to take detailed measurements and purchase and alter clothing for each episode of the news. The hosts then tried on different outfit combinations in order to find the best look. During these try-on sessions, the three male hosts told lewd and vulgar jokes and made sexually explicit comments and gestures. They often talked about their personal sexual experiences and fantasies during various stages of undress as Neena tried to ensure clothing fit. During the fittings, Neena never complained that she found the hostsâ conduct offensive. After five months, Neena was fired because she could not alter the clothing fast enough to keep up with the demands of the evening hosts. She filed a suit against The Scandal Show, alleging sexual harassment and claiming that her termination was based on racial discrimination. Can Neena establish a prima facie case of racial discrimination?

No â ” she would have to prove that The Scandal Showâ s alteration speed requirement had a discriminatory effect which excluded members of a protected class at a higher rate than non-members No â ” she would have to show that the selection (or retention) rate for members of a protected class was less than half, or 50%, of the selection rate for non-members Yes, there is clear evidence of racial discrimination

Yes, all Neena has to do is prove that she is a member of a protected class and that she was fired.

QUESTION 34

Neena, an African American woman, was hired by The Scandal Show to be a costumerâ s assistant for their evening broadcast. One of her essential job duties was to shop for specific styles for the hosts so that they would look professional. She had to take detailed measurements and purchase and alter clothing for each episode of the news. The hosts then tried on different outfit combinations in order to find the best look. During these try-on sessions, the three male hosts told lewd and vulgar jokes and made sexually explicit comments and gestures. They often talked about their personal sexual experiences and fantasies during various stages of undress as Neena tried to ensure clothing fit. During the fittings, Neena never complained that she found the hostsâ conduct offensive. After five months, Neena was fired because she could not alter the clothing fast enough to keep up with the demands of the evening hosts. She filed a suit against The Scandal Show, alleging sexual harassment and claiming that her termination was based on racial discrimination. When Neena was hired, she was told that alteration speed was extremely important to the position. At the time, she maintained that she was an experienced and extremely fast seamstress, so her alteration speed was not tested. It later turned out that Neena had never worked with the type of

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sewing machine at the TV station and didnâ t know how to use it and that she was much slower at sewing than the other costumers. What impact might alteration speed have on Neenaâ s lawsuit?

It wouldnâ t shield The Scandal Show from liability for discrimination but could limit damages. It wouldnâ t have any impact on the lawsuit at all

It would bar Neena from suing completely

It would allow The Scandal Show to sue Neena for discrimination

QUESTION 35

Neena, an African American woman, was hired by The Scandal Show to be a costumerâ s assistant for their evening broadcast. One of her essential job duties was to shop for specific styles for the hosts so that they would look professional. She had to take detailed measurements and purchase and alter clothing for each episode of the news. The hosts then tried on different outfit combinations in order to find the best look. During these try-on sessions, the three male hosts told lewd and vulgar jokes and made sexually explicit comments and gestures. They often talked about their personal sexual experiences and fantasies during various stages of undress as Neena tried to ensure clothing fit. During the fittings, Neena never complained that she found the hostsâ conduct offensive. After five months, Neena was fired because she could not alter the clothing fast enough to keep up with the demands of the evening hosts. She filed a suit against The Scandal Show, alleging sexual harassment and claiming that her termination was based on racial discrimination. Neenaâ s sexual-harassment claim is based on the hostile working environment created by the hostsâ sexually offensive conduct at the fittings that she was required to attend. The hosts, however, argue that their behavior was essential to the â creative processâ of preparing for the evening show which routinely covered sexually charged topics associated with celebrity scandals. Which defense discussed in the chapter might The Scandal Show assert using this argument?

There is no defense they could assert

They could claim that they treated male and female employees the same They could assert that the explicit language was a business necessity in preparing for the evening show They could assert that such behavior is common and expected in working in TV

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QUESTION 36

In order to hire someone, according to the Immigration Reform

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and Control Act, you must ask the employee whether they are allowed to work in the US require that the employee show you a current rental agreement and a utility bill file a Form I-9 for each employee verifying that each employee is either a U.S. citizen or is entitled to work in the U.S. file an Alien Registration Receipt for all non-citizens, but nothing special needs to be done for U.S. citizens

QUESTION 37

Which of the following is NOT something that unions and employers typically bargain over

wages and hours of work

health and safety rules

insurance and pension plans

plant closings

2 points Save Answer

QUESTION 38

In May 2018, several employees of Sofa Queen, Inc., a furniture manufacturer with 250 employees, formed the Sofa Queen Employees Union (SQEU). In June, the National Labor Relations Board (NLRB) conducted an election that showed that a majority of Sofa Queen employees supported the union. SQEU began bargaining with management over wages and benefits. In January 2019, Sofa Queen management offered SQEU a 1 percent annual wage increase to all employees with no other changes in employment benefits. SQEU countered by requesting a 3 percent wage increase and an employee health- insurance package. Sofa Queen management responded that the 1 percent wage increase was the companyâ s only offer. SQEU petitioned the NLRB for an order requesting good faith bargaining. After meeting with an NLRB representative, Sofa Queen management still refused to consider modifying its position. SQEU leaders then became embroiled in a dispute about whether SQEU should accept this offer or go on strike. New union leaders were elected in July 2019, and the employer refused to meet with the new SQEU representative, claiming that the union no longer had majority support from employees. In August 2019, a group of seven Sofa Queen carpenters began feeling ill while working with a new adhesive used in creating coffee tables. The seven carpenters discussed going on strike without union support. Before reaching agreement, one of the carpenters, Faith Faintly, became dizzy while working with the adhesive and walked out of the workplace. How many of Sofa Queen’s 250 employees must have signed authorization cards to allow SQEU to petition the NLRB for an

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election? None. It’s not necessary to petition the NLRB

A majority of workers, but if the employer refuses to voluntarily recognize the union, at least 30% of the workers must support a union or an election. All of the employees must sign their authorization cards

There is no such thing as a petition to the NLRB

QUESTION 39

In May 2018, several employees of Sofa Queen, Inc., a furniture manufacturer with 250 employees, formed the Sofa Queen Employees Union (SQEU). In June, the National Labor Relations Board (NLRB) conducted an election that showed that a majority of Sofa Queen employees supported the union. SQEU began bargaining with management over wages and benefits. In January 2019, Sofa Queen management offered SQEU a 1 percent annual wage increase to all employees with no other changes in employment benefits. SQEU countered by requesting a 3 percent wage increase and an employee health- insurance package. Sofa Queen management responded that the 1 percent wage increase was the companyâ s only offer. SQEU petitioned the NLRB for an order requesting good faith bargaining. After meeting with an NLRB representative, Sofa Queen management still refused to consider modifying its position. SQEU leaders then became embroiled in a dispute about whether SQEU should accept this offer or go on strike. New union leaders were elected in July 2019, and the employer refused to meet with the new SQEU representative, claiming that the union no longer had majority support from employees. In August 2019, a group of seven Sofa Queen carpenters began feeling ill while working with a new adhesive used in creating coffee tables. The seven carpenters discussed going on strike without union support. Before reaching agreement, one of the carpenters, Faith Faintly, became dizzy while working with the adhesive and walked out of the workplace. Based on the example above, which of the following indications of bad faith bargaining did Sofa Queen engage in?

excessive delaying tactics

insisting on obviously unreasonable terms

refusing to discuss or bargain the terms of their original offer appointing bargainers who lack the authority to make agreements

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QUESTION 40

In May 2018, several employees of Sofa Queen, Inc., a furniture manufacturer with 250 employees, formed the Sofa Queen Employees Union (SQEU). In June, the National Labor Relations

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Board (NLRB) conducted an election that showed that a majority of Sofa Queen employees supported the union. SQEU began bargaining with management over wages and benefits. In January 2019, Sofa Queen management offered SQEU a 1 percent annual wage increase to all employees with no other changes in employment benefits. SQEU countered by requesting a 3 percent wage increase and an employee health- insurance package. Sofa Queen management responded that the 1 percent wage increase was the companyâ s only offer. SQEU petitioned the NLRB for an order requesting good faith bargaining. After meeting with an NLRB representative, Sofa Queen management still refused to consider modifying its position. SQEU leaders then became embroiled in a dispute about whether SQEU should accept this offer or go on strike. New union leaders were elected in July 2019, and the employer refused to meet with the new SQEU representative, claiming that the union no longer had majority support from employees. In August 2019, a group of seven Sofa Queen carpenters began feeling ill while working with a new adhesive used in creating coffee tables. The seven carpenters discussed going on strike without union support. Before reaching agreement, one of the carpenters, Faith Faintly, became dizzy while working with the adhesive and walked out of the workplace. Could the seven carpenters legally call a strike?

No – there must be a cooling off period first

No – it would be a “wildcat” strike because only unions can authorize strikes Yes – any individual within the union can call a strike

Yes – any group of workers within a union can call a strike

QUESTION 41

In May 2018, several employees of Sofa Queen, Inc., a furniture manufacturer with 250 employees, formed the Sofa Queen Employees Union (SQEU). In June, the National Labor Relations Board (NLRB) conducted an election that showed that a majority of Sofa Queen employees supported the union. SQEU began bargaining with management over wages and benefits. In January 2019, Sofa Queen management offered SQEU a 1 percent annual wage increase to all employees with no other changes in employment benefits. SQEU countered by requesting a 3 percent wage increase and an employee health- insurance package. Sofa Queen management responded that the 1 percent wage increase was the companyâ s only offer. SQEU petitioned the NLRB for an order requesting good faith bargaining. After meeting with an NLRB representative, Sofa Queen management still refused to consider modifying its position. SQEU leaders then became embroiled in a dispute about whether SQEU should accept this offer or go on strike. New union leaders were elected in July 2019, and the employer refused to meet with the new SQEU representative, claiming that the union no longer had majority support from employees. In August 2019, a group of seven Sofa Queen carpenters began feeling ill while working with a new adhesive used in creating coffee tables. The seven carpenters discussed going on strike

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without union support. Before reaching agreement, one of the carpenters, Faith Faintly, became dizzy while working with the adhesive and walked out of the workplace. Based on the example above, would Faintly’s safety walkout be protected under the Labor-Management Relations Act?

No – because she was the only one who walked out

No – because workers are not allowed to walk out for safety issues Yes – because the safety issue affected other workers

Yes – because any worker can walk out for any reason and is protected from being fired by the LMRA

QUESTION 42

Assume that the Federal Communications Commission (FCC) has a rule that it will enforce net neutrality and ensure an open internet by prohibiting blocking, throttling, and paid prioritization. Then the FCC makes a new rule, declaring that it will no longer enforce open internet regulations and roll back internet regulations. In making the new rule, the FCC does not conduct a rulemaking procedure but simply announces its decision. A media firm objects that the new rule was unlawfully developed without opportunity for public comment. The media firm challenges the rule in an action that ultimately is reviewed by a federal appellate court. Since the president does not have the power to appoint and remove officers, what type of agency is the FCC?

Independent agency

Executive agency

Congressional agency

Judicial agency

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QUESTION 43

Assume that the Federal Communications Commission (FCC) has a rule that it will enforce net neutrality and ensure an open internet by prohibiting blocking, throttling, and paid prioritization. Then the FCC makes a new rule, declaring that it will no longer enforce open internet regulations and roll back internet regulations. In making the new rule, the FCC does not conduct a rulemaking procedure but simply announces its decision. A media firm objects that the new rule was unlawfully developed without opportunity for public comment. The media firm challenges the rule in an action that ultimately is reviewed by a federal appellate court. Suppose that the FCC asserts that it has always had the statutory authority to regulate the internet. This is the only argument the FCC makes to justify changing its enforcement rules. Would a court be likely to find that the FCCâ s action was arbitrary and capricious under the Administrative Procedure

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Act (APA)? No because they can regulate as they see fit

No because they clearly have the power to regulate the internet as a common carrier Yes because they did not allow for a notice and comment proceeding Yes because they did not consult with the president

QUESTION 44

Assume that the Federal Communications Commission (FCC) has a rule that it will enforce net neutrality and ensure an open internet by prohibiting blocking, throttling, and paid prioritization. Then the FCC makes a new rule, declaring that it will no longer enforce open internet regulations and roll back internet regulations. In making the new rule, the FCC does not conduct a rulemaking procedure but simply announces its decision. A media firm objects that the new rule was unlawfully developed without opportunity for public comment. The media firm challenges the rule in an action that ultimately is reviewed by a federal appellate court. Would a court be likely to give Chevron deference to the FCCâ s interpretation of the law on net neutrality?

No because when the FCC was created, there was no internet No because it is not clear what the intent of Congress was in the FCCâ s regulation of the internet Both of the above

None of the above

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QUESTION 45

Wrigley chewing gum advertised that their gum was “scientifically proven to help kill the germs that cause bad breath” but actually, there was no scientific proof to substantiate the ad. This is an example of

Bait and switch advertising

Deceptive advertising

Puffery

None of the above

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QUESTION 46

Which organization has the authority to ban the sales of a

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product based on safety concerns? The National Labor Relations Board

The Truth in Lending Commission

The Safe Product Enforcement Division

The Consumer Product Safety Commission

QUESTION 47

Under federal law, product labels must identify the product

the net quantity of the contents

the manufacturer

all of the above

2 points Save Answer

QUESTION 48

Jon Snow saw a local TV dealerâ s magazine advertisement offering a Sony 77â Smart 4k Ultra High Definition TV for $3,399. When she went to the shop, however, she learned that the Sony model had been sold out. The salesperson told Jon that he still had the higher-end LG TV in stock for $4,199 and would sell her one for $3,899. Jon was disappointed but decided to purchase the LG model. When Jon said that he wished to purchase the TV on credit, he was directed to the dealerâ s credit department. As he filled out the credit forms, the clerk told Jon, who is an Asian American, that he would need a cosigner to obtain a loan. Jon could not understand why he would need a cosigner and asked to speak to the store manager. The manager apologized, told him that the clerk was mistaken, and said that he would â speak toâ the clerk. The manager completed Jonâ s credit application, and Jon then took the TV home. Seven months later, Jon received a letter from the manufacturer informing him that a flaw had been discovered in the TVs wifi system and that the model had been recalled. Did the dealer engage in deceptive advertising?

Yes, a reasonable customer would show up at the store expecting the advertised item to be available Yes, this is bait and switch

Yes, the TV dealer advertised an extremely low price for a 77â TV likely with no intention of selling it at that price. All of the above

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QUESTION 49

Jon Snow saw a local TV dealerâ s magazine advertisement

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offering a Sony 77â Smart 4k Ultra High Definition TV for $3,399. When she went to the shop, however, she learned that the Sony model had been sold out. The salesperson told Jon that he still had the higher-end LG TV in stock for $4,199 and would sell her one for $3,899. Jon was disappointed but decided to purchase the LG model. When Jon said that he wished to purchase the TV on credit, he was directed to the dealerâ s credit department. As he filled out the credit forms, the clerk told Jon, who is an Asian American, that he would need a cosigner to obtain a loan. Jon could not understand why he would need a cosigner and asked to speak to the store manager. The manager apologized, told him that the clerk was mistaken, and said that he would â speak toâ the clerk. The manager completed Jonâ s credit application, and Jon then took the TV home. Seven months later, Jon received a letter from the manufacturer informing him that a flaw had been discovered in the TVs wifi system and that the model had been recalled. Suppose that Jon had ordered the TV through the dealerâ s Web site but the dealer was unable to deliver it by the date promised. What would the FTC have required the merchant to do in that situation?

The dealer would have to cancel the order and refund the money The dealer would have to notify Jon and allow him to choose whether or not to cancel the order The dealer would not have any duty to act in this situation

The dealer would have to offer another TV of equal or greater value

QUESTION 50

Jon Snow saw a local TV dealerâ s magazine advertisement offering a Sony 77â Smart 4k Ultra High Definition TV for $3,399. When she went to the shop, however, she learned that the Sony model had been sold out. The salesperson told Jon that he still had the higher-end LG TV in stock for $4,199 and would sell her one for $3,899. Jon was disappointed but decided to purchase the LG model. When Jon said that he wished to purchase the TV on credit, he was directed to the dealerâ s credit department. As he filled out the credit forms, the clerk told Jon, who is an Asian American, that he would need a cosigner to obtain a loan. Jon could not understand why he would need a cosigner and asked to speak to the store manager. The manager apologized, told him that the clerk was mistaken, and said that he would â speak toâ the clerk. The manager completed Jonâ s credit application, and Jon then took the TV home. Seven months later, Jon received a letter from the manufacturer informing him that a flaw had been discovered in the TVs wifi system and that the model had been recalled. Assuming that the clerk required a co-signer based on Jonâ s race or ethnicity, what act prohibits such credit discrimination?

The Consumer Product Safety Act

The Equal Credit Opportunity Act

The Truth in Lending Act

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Fair Debt Collection Practices Act