Roll and Function of Law

Role and Function of Law

Dwayne Brinson

University of Phoenix

LAW/421

Instructor Mark Addington

In today’s world the laws may seem unfair and unjust to some. Something as simple as wearing a seatbelt and there are people that believe that it should be a choice and not a law. The laws are put into place to protect people not just to correct criminal or dishonest behavior. In today’s world some people are quick to want to sue someone for anything as a means of getting what they often times feel is monetarily due to them for any type of discomfort or injustice. In the business world decisions regarding employee compliance regulations, even interoffice regulations are being decided on every day.

The Law in Business

The law in the business world can sometimes have priority on how companies can operate. Take a paint company for example, according to the law, they cannot dispose of toxic chemicals into the environment and if they were caught doing so they could face federal penalties. For most business owners, they generally have a lot of knowledge for the business they are focused on, with that being said, there can be legal issues that they are not aware of. In business, there are laws that prevent companies from doing unethical or unlawful things such as working to many hours at less than unfair wages, or reduplication of a product. Labor laws and employment make sure that businesses treat employees good, as well as making sure they are paid at a fair wage. Trademark and patent laws prevent a company from reduplication of a product unless they receive permission first.

Knowledge of the Law

Business owners need to make sure they are informed of the legal aspects of business, especially with the advantages that can come from understanding the law. Melvin (2011) stated “having legal awareness may present opportunities for proactive business planning and empowering business owners and managers to limit liability, gain a competitive edge, and add value to the business.” (p.6). For a more thorough knowledge and understanding of the law, business owners will oftentimes seek the assistance of a practicing attorney, often referred to as council in the business world. Attorneys advise business owners on issues related to labor and employment law, agency compliance, legal transactions, and intellectual property. (Melvin, 2011) Council are often most helpful in preventing law suits against the business by applying not only the knowledge of the law in general, but also provide the tools of research that the business can use when issues arise. In the event that a situation with a labor dispute or contract resolution occurs, council can more effectively provide the business with results from previous cases that may have had similar ramifications that will assist in the resolution of its current issues.

Role and Functions of Law in Business

Every business faces areas where the law must be met and complied with. In 2002, the world of inventory control changed. The Sarbanes-Oxley Act became law after several mismanagement and accounting scandals. “Sarbanes-Oxley (SOX) was passed to combat corruption at big public companies like Enron, WorldCom, Tyco, Adelphia, Global TelLink, HealthSouth, and Arthur Andersen. But small and not-for-profit companies are finding they have no choice but to adopt many of the same standards if they want to get insurance, attract investors and donors, and repel lawsuits. SOX compliance is becoming a portfolio building block that no company can ignore” (John Willey and Sons INC., 2013). SOX creates accountability for businesses. Inventory within the company must be audited within SOX compliance. The law plays a large role in the life of an inventory control manager. Every decision made requiring the removal, placement, or replacement of inventory must comply with SOX regulations. Managers and supervisors obtain SOX training to ensure compliance. Not all positions require intimate knowledge of regulations, but each position in every company does have their own legal regulations.

Cipollone v. Liggett Group, Inc.

Businesses must work with their legal teams to decide the best course of action in every move they make. In the case of Cipollone v. Liggett Group, Inc. the company was sued for failure to disclose the dangers of cigarettes in advertising. Cipollone lost the case in the United States Supreme Court. The Supreme Court ruled previous federal law preempted any state regulations on tobacco labeling. The Supreme Court demonstrated in this case they have a broad preemptive power. The Supreme Court used the Federal Cigarette Labeling and Advertising Act of 1965, and the Public Health Cigarette Smoking Act of 1969 to negate claims of false advertising and not disclosing important medical information (Melvin, 2011). This decision used Acts meant to increase public awareness of the dangers of cigarettes and used them to excuse the manufacturer of wrongdoing if they complied with the act. The Supreme Court ruled that, “because Congress chose specifically to regulate a certain type of advertising (tobacco), federal law is supreme to any state law that attempts to regulate that same category of advertising” (Melvin, 2011, P. 33). This ruling means states cannot rule on this issue unless federal regulations are not followed. Congress would want to preempt state law in the case where advertising and promotion of tobacco products to prevent a large number of frivolous lawsuits flooding the court system, and to prevent different states from interpreting the law differently. This action makes sense from a business standpoint, but limits the ability of consumers to express a grievance with the tobacco industry. This decision also prevents the tobacco industry from the requirement to inform the public of new information discovered regarding health and tobacco use.