Dracca Became Aware That One Of Its Competitors

MBA05-W4-A3

Dracca
became aware that one of its competitors, TrendBaby, Inc., was soliciting
information from one of Dracca’s employees, Bob Shumaster. Shumaster was
apparently detailing product assembly information that was unique to Dracca and
explaining to TrendBaby how this assembly strategy saved Dracca thousands of
dollars each month. Dracca discovered that TrendBaby actually hired Shumaster
to provide this information, and that Shumaster was using Dracca company
computers to relay the proprietary information to TrendBaby via email.

Meanwhile,
Sally May, a sales representative for Dracca ran into her neighbor who is a
sales representative from one of Dracca’s competitors. May is friendly with her
neighbor, and drives her children to school each morning. The families get
along well, and often have barbeques and other social events together in the
neighborhood. As part of the small talk, May mentioned to her neighbor the new
sales promotion Dracca was offering retailers on its full line of products. Although
the promotion had been mentioned in trade publications, May’s neighbor had not
yet heard about it and was curious about its details.

May
worked closely with the marketing department. Her colleague in marketing, Rick
Martin, developed the new slogan for Dracca’s crib products: “A Full Night’s
Sleep.” In the Internet advertisement for this campaign, Dracca claimed that
babies using its crib products slept two hours longer than other infants. This
was an unverified statistic. Dracca’s crib sales increased 50 percent because
of this advertisement, but they received many complaints from unsatisfied
parents.

Dracca
sold the cribs to eight different retailers across the United States. Dracca
charged six of the retailers $75 per unit, but they only charged the other two
retailers $50 per unit because they were Dracca’s best retail customers. Due to
the price differential, the two retailers with the $50 per unit price were
responsible for 96 percent of Dracca’s sales, even though each of the eight
retailers purchased the same quantity of inventory.

These
cribs were manufactured in a plant in Philadelphia. Carbon dioxide was part of
the plant’s emissions. The Philadelphia plant met local guidelines for carbon
dioxide emissions, but it exceeded recommendations set forth by the federal
government for carbon dioxide output in a calendar year.

Questions:

·
Did Shumaster commit any criminal acts?
Does TrendBaby have any liability related to Shumaster’s action? Why or why
not? Rely on legal principles to support your conclusion.

·
Would the Computer Fraud and Abuse Act
apply to Shumaster’s use of Dracca’s computer to email misappropriated trade
secrets to a competitor? Rely on legal principles and case law to support your
conclusion.

·
Is it ethical for May to have a conversation
with her neighbor about Dracca’s new sales promotion? What factors should May
consider in making her decision?

·
Can consumers of Dracca’s new cribs sue
for false advertising? What factors would the court consider in evaluating a
case for deceit under the circumstances?

·
Has Dracca committed secondary line
discrimination in its varied pricing of the cribs? What factors would a court
consider in this type of analysis under the Robinson-Patman Act?

·
Is Dracca in violation of any
environmental laws with its Philadelphia plant? Be sure to give a legal premise
for your conclusion. What are the ramifications for Dracca if it continues to
exceed federal recommendations for carbon dioxide output? What are the
ramifications for the Philadelphia area?

·
What actions (internal and external) do
you recommend to Dracca to remedy the ethical and legal considerations of this
scenario? Be specific and detailed, and be sure to base recommendations on
relevant legal and ethical principles.

Instructions: In light of these
facts, please respond to the following questions using course material and credible
outside research to support your findings.Supported research and
findings with at least 2-scholarly sources, which may include cases, laws,
articles and similar materials. Please submit findings
in a3- page paper using APA format (introduction,
conclusion, recommendations, at least 2-references, and citations).

You can use this book:Bagley, C. (2012). Managers and the Legal Environment: Strategies for the 21st Century
(7th ed). Cengage Learning.