UofP - MBA560 - DQs - Week One - 06-05-06

UofP - MBA560 - DQs - Week One - 06-05-06 - DQ 1 Week 1 How...

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DQ 1 Week 1 How does an organization identify risks in the areas of contract law, employment law, and regulatory law to which it is exposed in operations? Identifying Risks Contract Law First, an organization needs to look for basic contract structure including form of the contract, authority and signatures, and registration, if applicable. Next, the performance of the contract needs to be identified to mitigate risk of the acceptance of work or deliverables, payments, delays, and strict terms. Importantly, organizations need to be aware about nonperformance breach of contracts, which includes significance of conditions and warranties, the assessment of compensatory damages, and penalties (or liquidated) damages. However, certain defenses exist to an “alleged” breach of contract including justification, non-adherence to specification, misrepresentation, economic duress, and mistake. Employment Law Organizations must apply risk management techniques to the employment relationship. Some of the major employment law risks include employee claims, unfair competition, and regulatory compliance. Employee claims can arise from a disgruntled employee deciding that he or she has been wronged. However, emphasizing the avoidance of claims through various techniques including carefully constructed employee manuals and employment policies, adoption and application of firm but fair disciplinary procedures, and training management to deal with sexual harassment and other forms of illegal discrimination can mitigate associated risks. Unfair competition relates to when a former sales person or other employee becomes a competitor. Subsequently, the employer is at risk to lose business. Bottom line: an employer’s most valuable assets are relationships with customers and its database of customer information. In order to mitigate this risk, an employer can significantly deter employees from pirating customers and information through the use of Non Compete and Confidentiality Agreements. These restrict employees from doing business with the employer’s customers for a reasonable period of time after the employment terminates and preclude the misuse of the employer’s proprietary information. Regulatory compliance relates to COBRA, HIPAA (Health Insurance), FLSA (Wage and Hour Laws), ERISA (Employee Benefits), and FMLA (Leaves of Absence) to name a few. Claims by employees and audits by the Department of Labor and other agencies can be expensive in staff time and legal costs and, if found negligent, can carry significant assessments and penalties. A good way to mitigate risk is through a systematic approach called an Employment Practices Audit. Simply, it is an audit tailored to the employer’s need and budget, which can uncover exposure to employee claims and/or government audits. Regulatory Law
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This note was uploaded on 06/12/2011 for the course ETHICS mba taught by Professor Wilkes during the Spring '05 term at University of Phoenix.

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UofP - MBA560 - DQs - Week One - 06-05-06 - DQ 1 Week 1 How...

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