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Legal, Ethical, Social Obligations of a business Chapter 14 Regulations that promote competition • Sherman Act – Makes it illegal for competitors to get together and set prices on the products or services for sell • Gas prices • Clayton Act – It is illegal for business to require a customer to purchase one good in order to be able to purchase another good • Purchase computer to get software Regulations that promote competition (cont.) • Robinson-Patman Act – makes it illegal to charge different pries to different groups of non-retail consumers • Modern Vending selling to stores • Wheeler-Lea Act – bans unfair or deceptive actions or practices by businesses • Drug companies and side effects Government Agencies that protect Competition • Justice Department – Antitrust Division of the U.S. Justice Department – takes legal action against businesses it believes are trying to have a monopoly • Federal Trade Commission – administers most of the laws dealing with fair competition Better Business Bureau • Report information on business reliability • Alert the public to fraud against consumers and businesses • Act as intermediary between businesses and consumers when there is a complaint Laws that protect businesses • Patent – gives inventor sole right to produce, use, and sell an invention. • Good for 20 years • Copyright – legal right to exclusive publication, production, sale, or distribution of a literary or artistic work • Good for 70 years • Trademark – name, symbol, or special market that can only be used by certain businesses • Band-Aid ™ Laws that Protect Consumers • Federal Food, Drug, and Cosmetic Act – bans sale of unsafe food, drugs, cosmetics, improper labels, etc. • The Federal Food and Drug Administration enforces this law Consumer Product Safety Act – safety for products other than food and drugs (recalls) Laws that Protect Consumers • Licenses – varies by state and local governments to operate a business • Beauty salon • Restaurant • Health and fitness center • May have regular inspections Laws that protect consumers (cont.) • Zoning laws – local governments establish zoning laws that control what type of buildings can be built • Commercial • Residential Regulations that protect employees • Workplace Discrimination – Bans against discrimination against race, age, color, national origin, religion, or gender (Equal Employment Opportunity Commission regulates this) Workplace discrimination(cont.) • Americans with Disabilities Act – bans discrimination against people with disabilities • Businesses with more than 15 employees to accomodate the needs of employees with disabilities • All businesses open to public must accommodate to allow access to all people Safe working conditions • Occupational Safety and Health Act – requires employers to maintain safe working environment for employees. • Enforced by Occupational Safety and Health Administration (OSHA) Workplace laws • Family Medical Leave Act – requires businesses with more than 50 employees to provide up to 3 months of unpaid leave if serious health condition o f immediate family member • Maternity or paternal leave • Must be employed for 1 year Wages • Fair Labor Standards Act – maximum number of hours an employee can work • Hours for children under 16 • National minimum wage Ethics in business • Ethics is the study of right and wrong •Code of ethics – is the level of ethical behavior Why have an ethical workplace? • You should want to do the right thing. • You want to serve as a role model • It gains the trust of customers • Employees are more likely to act ethically • Acting ethically reduces the risk of getting sued Ethics (cont.) • As a business you should have a written code of ethics • Also you should have established company policies and procedures Responsibilities to customers • Treat all customers with respect • Be honest • Avoid exaggerating the merits of your products or services • Inform customers of potential dangers of products • Handle all disputes fairly Responsibilities to customers • Treat all customers with respect • Be honest • Avoid exaggerating the merits of your products or services • Inform customers of possible dangers of products you sell • Handle all disputes fairly Responsibilities to suppliers • Treat all suppliers with respect