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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.
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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.
In light of these facts, please respond to the following questions using course material and credible outside research to support your findings. Please submit findings in a three- to five-paper, following APA guidelines.
- Did Shumaster commit any criminal acts? Does TrendBaby have any liability related to Shumaster’s action? Why or why not? Rely on legal principles from this week’s reading 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 from this week’s reading 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.
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