Simulation-1-3 Business Law Simulation Exercise for Managers 1: Restrictive Covenants in Contracts – The Legal Environment of Business: A Managerial Approach: Theory to Practice : Book Guide

This Document Contains Simulation 1 to 3 Business Law Simulation Exercise for Managers #1: Restrictive Covenants in Contracts Note to the Instructor: This material is featured in the Instructor’s Manual and in online content for instructors. Students do not have access to this material. Instructor’s Overview Since at least 1970, instructors in a variety of business disciplines have been using simulations (sometimes called simulation gaming) in their courses. Business law instructors use a wide variety of simulations each with the objective of having students engage in a sequential decision-making exercise involving a legal issue that is typically covered in Legal Environment of Business/Business Law courses . Several journals, notably the Journal of Legal Studies Education, regularly feature models for use in the classroom in the form of mock hearings, moot court exercises, and negotiation exercises. However, these simulations can also be impractical for three reasons. First, the exercises are necessarily of the one-size-fits-all genre and cannot be used in settings where large numbers of students are involved. Second, the exercises sometimes tend to be too cut towards education of law students instead of business students. Finally, the simulations are sometimes taught in a vacuum because they are not tied to the textbook. The simulations in this text are specifically crafted to be: 1) flexible enough to use in a variety of classroom settings; 2) geared towards business students who are working towards a tenable solution to a legal problem as an alternative to relying on a judicial forum to resolve the dispute; 3) directly related to one or more topics covered in the textbook. Each textbook Unit has a separate simulation covering one or more topics in the Unit. Each simulation contains three parts. After an overview of the simulation process and learning objectives for the student, Part 1 presents a hypothetical fact pattern describing events leading up to a legal dispute. Part 2 is a set of two hypothetical case summaries that give students brief facts, legal points, and short excerpts from the opinion. While these cases are hypothetical, they are based on actual cases from appellate courts in various states and represent a majority view. Part 3 is featured only in the Instructor’s Manual (and online for instructor use) and contains templates for a wide selection of exercises, including teaching tips and sample answers, for using the simulation in a broad range of classroom settings. The actual assignment sheets are located on the textbook’s website in Word format. The website may be used to generate assignment sheets (in hard copy or electronically) for students. The templates are designed to be used ‘as is’ or may be modified by the instructor to tailor to the particular needs of the course. INSTRUCTOR’S RESOURCES Table of Alternative Options for Assignments Class Characteristic Suggested Alternative Option Format Mid-sized (25-35) Format A: Arbitration Simulation Format B: Mediation Format C: Short Writing Exercise- Issue spotting Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Small or seminar (20) Format A: Arbitration Simulation Format B: Mediation Format C: Short Writing Exercise- Issue spotting Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Format F: Comparative Research Grid Fourth Credit Hour Format A: Arbitration Simulation Format B: Mediation Large lecture section Format C: Short Writing Exercise- Issue spotting Format E: Discussion Questions Graduate Format A: Arbitration Simulation Format B: Mediation Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Format F: Comparative Research Grid Instructor’s Overview of Alternative Assignment Formats Below is a short description for each alternative assignment format listed in the Alternatives Table (above). Assignment sheet templates for each of these formats are located on the textbook’s website in Word format and are fully capable of being distributed electronically, in hard copy format as written, or they may be revised by the instructor to modify for individual course needs. Format A: Arbitration Simulation In this format, students are assigned to review Chapters 6, 7, and 8 of the text, study the stipulated facts and cases, and then participate in a mock arbitration. Students are informed that the cases should be read with any eye towards understanding the differences and similarities between the court cases and the stipulated facts in the Neurological Associates v. Blackwell case. Each student (or groups of students depending on class size) is assigned the role of Cohn as manager of Neurological Associates or as Blackwell. The parties then prepare to participate in a private arbitration narrowed down to the enforceability of the restrictive covenant. The instructor (or teaching assistant) acts as the arbitrator that runs the simulation by asking the parties questions about their theories of the case and testing their knowledge of the application of Longville case law and the ability to cite specific points of law and excerpts in explaining how the cases support their arguments or are distinguishable from their case’s facts. Students are evaluated on: a) grasp of the legal issues; b) ability to articulate an argument and respond to questions in arbitration; c) engagement in the simulation; d) ability to work as a team (if applicable). The time of arbitration is set at a maximum of 20 minutes total. Format B: Mediation In this format, students are assigned to review Chapters 6, 7, and 8 study the Stipulated Facts and Longville cases, and then participate in a mock mediation. Students are informed that the cases should be read with any eye towards understanding the differences and similarities between the court cases and the stipulated facts in the Neurological Associates v. Blackwell case. Each student (or groups of students depending on class size) is assigned the role of Cohn as manager of Neurological Associates or as Blackwell, or as a mediator assigned to the case. The instructor assumes the role of Chief Mediator and serves as a resource for the parties. The parties then prepare to participate in a private mediation narrowed down to the single issue of enforceability of the restrictive covenant. Mediators negotiate a variety of alternatives that will help the parties work towards a non-judicial solution. Initially, students work outside of the classroom to begin working on proposals. They are then assigned a final attempt session at mediation where the Chief Mediator is privy to the negotiations and final resolution or deadlock. Format C: Short Writing Exercise – Issue Spotting Students are assigned first to review Chapters 6, 7, and 8 and then to study the Stipulated Facts and Longville cases. Based on their knowledge of contracts law as a whole, they are then assigned to compose 3-4 page neutral memorandum that outlines each legal issue present with a short explanation of the applicable legal rules or doctrine. The sources of law for this memorandum are the textbook’s chapters on contract formation and performance (Chaps 6,7, and 8) as well as Longville case law. In this version of the simulation, students are not functioning as an advocate. Rather, they are being as objective as possible in spotting any and all potential issues that could arise in the case and give the analysis as to the likelihood of success on each point. Format D: Longer Writing Exercise – Advocate Memorandum Students are assigned first to review Chapters 6,7, and 8 and then to study the Stipulated Facts and the Longville cases. They are assigned to compose 5-7 page memorandum that advocates a particular party’s view (as assigned by instructor) on the issue of the enforceability of the restrictive covenant. Students outline each legal issue applicable to enforceability of the covenant and support their arguments using citations to legal points and excerpts of the Longville case law. Students are assigned to conclude the document by suggesting any potential non-judicial solution that may mutually benefit the parties. Format E: Discussion Questions Students are assigned to review Chapters 6,7, and 8, then read the Stipulated Facts and Longville cases and to prepare for a Q & A discussion of the issues presented. Students may be assigned to either advocate one side or the other, or to provide a neutral analysis. Discussion questions include potential uses in formation, performance, enforceability of the restriction, and any potential non-judicial, tenable solution that may mutually benefit the parties. Format F: Comparative Research Grid Students are assigned to review Chapters 6,7, and 8, then read the facts and cases in the simulation. After the instructor has given students are given a brief orientation on the use of various databases for looking up statutes and cases (ideally academic version of Lexis and/or Westlaw, but FindLaw.com, the Legal Information Institute (LII) and other free services will suffices), students prepare a grid that compares the restrictive covenant law in Longville with the state law in their own state. For more advanced or internationally focused programs, the instructor may also assign a comparative analysis of a foreign country’s law regarding restrictive covenants. ***Important Note to Instructors: The following Assignment Sheet templates are included for your purposes only. The Assignments are not featured in the student’s textbook. Typically, the student text’s Business Law Simulation Exercise would end after Part 2. Teaching tips, sample answers, sample grading guidelines and other helpful features are also included in the Instructor’s Manual only. Business Law Simulation Exercise for Managers: Contracts Assignment Sheet (Format A) Arbitration Simulation Introduction: In this simulation, students take on the role of advocates in a mock arbitration. Each individual student will be assigned to [a team of two that will] assume the role of one of the parties in the case. Additional Facts: In addition to the Stipulated Facts in Part 1, assume that NA and Blackwell agreed that they would submit to a private arbitration. Assume further that the parties have agreed to avoid any contract formation or defense issues and narrowed the dispute to one single issue: Is the restrictive covenant in the Blackwell Employment Agreement enforceable? They further agreed upon the arbitrator (your instructor) and to limit the total time of the arbitration hearing to 20 minutes. Assignment: Using the Longville case law in Part 2 as the reference to analyze the enforceability of the covenant, each party [team] should gain a full understanding of the Stipulated Facts, research the case law and prepare for an arbitration hearing. Students are strongly encouraged to use notes cards or other mediums to prepare their arguments and must be prepared to cite specific points of law and/or excerpts from the cases to support arguments or defenses. Each student must be sufficiently familiar with the facts and cases during the arbitration such that each student should be able to answer any questions the arbitrator will have and to justify their positions on the basis of case law. Criteria for grading: Students are evaluated on:  Grasp of the stipulated facts, legal issues and case law;  Ability to articulate an argument and respond to questions in arbitration;  Engagement in the simulation [and ability to work as a team]. Teaching Tips:  The Stipulated Facts are designed to have some facts that favor Blackwell’s position and some that cut towards NA’s position. It is often a good idea to inform students that they should not only articulate their own arguments, but also to anticipate alternative arguments and questions from the arbitrator.  Instructors may wish to take special care to help students understand that this arbitration is focused only on enforceability of the covenant and not on the issues in the fact pattern that could arise regarding proper formation and performance.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks.  In preparing for arbitrations, students sometimes are confused how to use points and facts in their arguments. Students should be encouraged to come prepared to cite to specific points of law and excerpts and to have these points prepared on note cards for the actual arbitration. Students should also be encouraged to factually distinguish any cases that do not support their arguments. That is, tell the arbitrator why one case or the other can’t be applied because it is factually different from the NA v. Blackwell case.  Students benefit greatly from a separate sheet or e-mail that lists the arbitration dates, times, locations and names of who represents which party;  If students assume a fact that is not stipulated, they should be presented with the question: Where is that in the stipulated facts?  The suggested format of the arbitration is to begin with a question to Blackwell: What is the legal dispute that we are arbitrating today? Arbitrators may then ask questions that are designed to promote a step-by-step process giving equal time to each party. Issue Sample questions Legitimate business interest To NA: What specific legitimate business interests are you alleging? o How can medical practices have trade secrets? o Can a small practice actually generate enough goodwill to qualify as a legitimate business interest? o What kind of investment did you make in Blackwell that is similar to the one in the Wellspan case? To Blackwell: Why isn’t NA’s patient referral base protectible? Balancing Tests To Blackwell: Doesn’t the balancing test weigh favor of NA since they are merely attempting to protect their patient base and referral base? Since the practice is specialized, isn’t it even more important to enforce the covenant given the devastating impact that your relocation could have on their revenue from patients? To NA: Given the lack of neurologists in the region, doesn’t public policy demand that Dr. Blackwell be released from the agreement despite your protectible interests? Are you asking me to rule that patients cannot choose their own physician? Competition To NA: Could it reasonable be said that NA is really not a “competitor” of Galway Hospital? Does a small practice really compete with a large city hospital for patients? To Blackwell: If your current patients find out that you left, isn’t it reasonable to assume they would be willing to drive 30-40 minutes extra in order to continue care under you? If so, isn’t that competition? Reasonably necessary in scope and duration To Blackwell: Given that the neurology is practiced throughout Longville, why can’t NA protect their interests in their patient base and referral base in entire the 50-mile radius? Couldn’t you simply locate your practice outside the restricted area? To NA: The case law does not give an exact number of years, but there are no cases that provide for a three-year covenant such as the one Blackwell signed. Why is three years necessary to protect your interest? Business Law Simulation Exercise for Managers: Contracts Assignment Sheet (Format B) Mediation Simulation Introduction: In this simulation, students analyze the Stipulated Facts and Longville case law and then work towards mediating a tenable solution to the dispute using a mock mediation process. Assignment:  In addition to the Stipulated Facts in Part 1, assume that NA and Blackwell agreed that they would submit to a private mediation. Assume further that the parties have agreed to avoid any contract formation or defense issues and narrow the dispute to one single issue, namely the enforceability of the restrictive non-compete covenant in the Blackwell Employment Agreement.  Review the Concept Summaries and your notes from Chapters 6,7, and 8 in the textbook.  Study the Stipulated Facts and Longville case law in the Simulation Exercise.  The facts and cases should be read with the goal of understanding the differences and similarities between the court cases and the stipulated facts in the Neurological Associates v. Blackwell case so that groups can work towards a resolution that achieves the primary objectives of both parties.  Each student (or groups of students depending on class size) is assigned the role of Cohn, as manager of Neurological Associates, or as Blackwell, or as a mediator assigned to the case. The instructor is the Chief Mediator and will serve as a resource for the parties during the mediation process.  Participants then prepare to participate in a process designed to settle issues related to the enforceability of the restrictive covenant. Note that no other legal issues are in dispute.  Initially, participants work outside of the classroom to begin working on proposals. The mediator initiates meetings with each party separately (no more than two 30-minute meetings with each side) and then prepares a variety of alternative tenable solutions crafted to help the parties work towards a mutually agreeable solution.  After meeting separately, students will be assigned a 20-minute time slot for a “final attempt” session at mediation where all parties and the instructor are present. The Chief Mediator is present to facilitate a solution and to evaluate your negotiations and progress. A deadlock, in and of itself, does not affect your grade, so long as the parties used reasonable efforts to compromise.  The parties should attempt to re-draft a more detailed and enforceable restrictive covenant that achieves, as best as possible, the objectives of each party: For NA, the protection of their legitimately protectible interests (trade secrets, goodwill and investments); for Blackwell, the ability to work within a reasonably defined area.  The mediator should provide a copy of the alternative proposals for a more detailed restrictive covenant for each of the parties just prior to the final attempt session. The parties may amend the proposal by hand at the session and turn in the final product (whether agreed to by the parties or deadlock) to the instructor. Criteria for grading: Students are evaluated on their final mediation session. Specifically:  Grasp of the stipulated facts and case law;  Legal issues and ability to articulate their position in the context of achieving mutually agreeable objectives;  Negotiation skills, engagement in the simulation, and ability to work as a team. Teaching Tips:  The Stipulated Facts are designed to have some facts that favor Blackwell’s position and some that cut towards NA’s position. It is often a good idea to inform students that neither side has a distinct advantage and thus a deadlock would result in a significant risk of legal liability for the business and expense of litigation.  Instructors may wish to take special care to help students understand that this arbitration is focused only on enforceability of the covenant and not on the issues in the fact pattern that could arise regarding proper formation and performance.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks.  Instructors may wish to emphasize that a deadlock is not necessarily equated to poor performance in the simulation so long as there is evidence that the mediation took place in good faith and at arms length. On the other extreme, students should be cautioned that if the parties have concluded a one-sided deal quickly, that would have a negative impact on their grade as it indicates that no arms-length transaction took place.  Students benefit greatly from a separate sheet or e-mail that lists the mediation dates, times, locations and names of who represents what role.  At the instructor’s discretion, the mediator may be presented with the following issue/question list for use in the initial separate meeting in order to facilitate the mediation. Issue Sample questions Legitimate business interest To NA: What specific legitimate business interests are you alleging? o How can medical practices have trade secrets? o Can a small practice actually generate enough goodwill to qualify as a legitimate business interest? o What kind of investment did you make in Blackwell that is similar to the one in the Wellspan case? To Blackwell: Why isn’t NA’s patient referral base protectible? Balancing Tests To Blackwell: Doesn’t the balancing test weigh favor of NA since they are merely attempting to protect their patient base and referral base? Since the practice is specialized, isn’t it even more important to enforce the covenant given the devastating impact that your relocation could have on their revenue from patients? To NA: Given the lack of neurologists in the region, doesn’t public policy demand that Dr. Blackwell be released from the agreement despite your protectible interests? Doesn’t the restriction result in a situation whereby patients cannot choose their own physician? Competition To NA: Could it reasonable be said that NA is really not a “competitor” of Galway Hospital? Does a small practice really compete with a large city hospital for patients? To Blackwell: If your current patients find out that you left, isn’t it reasonable to assume they would be willing to drive 30-40 minutes extra in order to continue care under you? If so, isn’t that competition? Reasonably necessary in scope and duration To Blackwell: Given that the neurology is practiced throughout Longville, why can’t NA protect their interests in their patient base and referral base in entire the 50-mile radius? Couldn’t you simply locate your practice outside the restricted area? To NA: The case law does not give an exact number of years, but there are no cases that provide for a three-year covenant such as the one Blackwell signed. Why is three years necessary to protect your interest? Business Law Simulation Exercise for Managers: Contracts Assignment Sheet (Format C) Short Writing Exercise- Issue Spotting Introduction: In this simulation, students analyze the Stipulated Facts and Longville case law and spot as many contract law issues as possible. The analysis is articulated in a 3-4 page neutral (i.e., not advocating a particular side) memorandum. Assignment:  Review the Concept Summaries and your notes from Chapters 6,7, and 8 in the textbook.  Study the Stipulated Facts and Longville case law in the Simulation Exercise.  Compose 3-4 page neutral memorandum that outlines each legal issue present with a short explanation of the applicable legal rules or doctrine. The sources of law for this memorandum are the textbook’s chapters on contract formation and performance (Chaps 6,7, and 8) and the Longville case law.  Note that you should not write as an advocate on one side or the other. Rather, you should be as objective as possible in spotting any and all potential issues that could arise in the case relating to contract formation, performance or enforcement of the restrictive covenant and give the analysis as to the likelihood of success of all theories. Criteria for grading:  Clarity of writing, grammar, document appearance;  Articulation of all potential issues presented;  Quality and depth of analysis. Due Date: [Instructor] Policy on Late Work: [Instructor] Teaching Tip: Students should identify and give a brief explanation of the following issues: Issue Stipulated Fact Reference (Paragraph #) Additional consideration to support a new obligation (non-compete) 4,5 Modification of existing contract/ genuine assent 4,5,6 Duress in entering into the contract 4,5 Undue influence in entering into the contract 6 Good faith performance by Blackwell and NA 7,8,9,10,11 Anticipatory repudiation and breach 11 Remedies available N/A Business Law Simulation Exercise for Managers: Contracts Assignment Sheet (Format D) (Longer) Writing Exercise: Advocate Memorandum Introduction: In this simulation, students are asked to analyze the Stipulated Facts and Longville case law, spot as many contract law issues as possible, and then write a 5-7-page memorandum that advocates a particular side of the dispute. Assignment:  Review the Concept Summaries and your notes from chapters 6,7, and 8 in the textbook.  Study the Stipulated Facts and Longville case law in the Simulation Exercise.  Your instructor will assign you to advocate for either NA or Blackwell.  Compose a 5-7-page memorandum that focuses on the enforceability of the restrictive covenant. Your memorandum should contain: 1) a brief summary of relevant facts of the dispute; 2) an explanation of each legal issue in the analysis with an application of legal rules or doctrines governing the dispute; 3) a list of all remedies that your side is entitled to; 4) a tenable solution to resolve the dispute in a non-judicial forum. Your memorandum should articulate arguments that support your side of the case by citing directly from the Longville cases points of law and opinion excerpts (use a simple parenthetical citation format with the first name of case and point/excerpt number such as Wellspan at Point 2, or Regional at Excerpt b1”).  Be sure to explain why you cited a particular point. Start with your strongest argument and give an analysis as to the likelihood of success of each theory.  In determining a tenable solution, carefully consider the objectives of each party (e.g., NA’s desire to protect their legitimate business interest; Blackwell’s desire to practice medicine in southwestern Longville).  Grading Criteria: See Memorandum Evaluation form (Attachment A) for specific factors used in evaluating your memorandum. Due Date: [Instructor] Policy on Late Work: [Instructor] Attachment “A” ______________________________________________________________________________ Memorandum Evaluation Student: ________________________ Possible Score Facts 5 Relevant summary of facts used throughout analysis Analysis 10 Demonstrated understanding of legitimate business interests 5 Demonstrated understanding of balancing tests 5 Demonstrated understanding of reasonable scope and duration 5 Used case law to support points 5 Offered a tenable non-judicial solution Writing style 10 Sentences were direct, clear and concise with appropriate syntax and legal expression 5 Paper format and appearance Comments: Total Instructor’s Memorandum Evaluation Guidelines: Issue Student’s should cover: Legitimate business interest What specific legitimate business interests is NA alleging? o How can medical practices have trade secrets? o Can a small practice actually generate enough goodwill to qualify as a legitimate business interest? o What kind of investment did NA make in Blackwell that is similar to the one in the Wellspan case? Balancing Tests How should the balancing test be applied? Does it weigh in favor of NA since they are merely attempting to protect their patient base and referral base? Since the practice is specialized, isn’t it even more important to enforce the covenant given the devastating impact that your relocation could have on their revenue from patients? Given the lack of neurologists in the region, what public policy issues apply? Shouldn’t patients choose their own physician? Reasonably necessary in scope and duration Can NA legitimately protect their interests in their patient base and referral base in entire the 50-mile radius? Couldn’t Blackwell simply locate her practice outside the restricted area? The case law does not give an exact number of years, but there are no cases that provide for a three-year covenant such as the one Blackwell signed. Why are three years necessary to protect NA’s interest? Business Law Simulation Exercise for Managers: Contracts Assignment Sheet (Format E) Discussion Questions Introduction: In this simulation, students prepare for a question and answer session based on issues presented by the Stipulated Facts in the NA v. Blackwell case. Assignment:  Review the Concept Summaries and your notes from Chapters 6,7, and 8 in this textbook.  Study the Stipulated Facts and Longville case law in the Simulation Exercise.  Be prepared to discuss the following questions: Teaching Tip: Students sometimes benefit from being assigned to either advocate one side or the other, or to provide a neutral analysis. Depending on time constraints, instructors may wish to assign only questions dealing with the enforceability of the covenant [8-10]. Questions 1. Consideration: Blackwell had already negotiated and signed a contract with NA when she was presented with an additional part of the contract dealing with restrictive covenant. Does the new contract need additional consideration to support a new obligation (non-compete)? If so, was the consideration present here sufficient? Answer: Yes, the new contract (non-compete) typically requires additional consideration to support the new obligation. If Blackwell had already agreed to the original terms, the non-compete would need new consideration, such as a promotion or additional benefits, to be enforceable. 2. Modification: Is the second contract (the non-compete restrictive covenant) considered a separate agreement or a modification to the first agreement? Discuss any potential problems related to the restrictive covenant in terms of the modification of existing contract by the subsequent contract. Answer: The restrictive covenant could be seen as either a modification or a separate agreement. Problems may arise if it's deemed a modification without adequate consideration or if it creates unfair conditions compared to the original agreement. 3. Duress: Could Blackwell reasonably claim that she was under duress when signing the restrictive covenant? What factors would suggest that she could/couldn’t? Is the fact that she subjectively feared for her job relevant? Why? Answer: Blackwell might claim duress if she was pressured into signing the restrictive covenant under threat of losing her job. Subjective fear of job loss is relevant, particularly if it significantly influenced her decision under pressure. 4. Undue influence: What is the primary factor in deciding whether a party may avoid a contract for undue influence? Could it apply to the Blackwell case? Answer: The primary factor for undue influence is whether one party was unfairly coerced or influenced by another party with more power. It could apply if Blackwell was unduly pressured into agreeing to the restrictive covenant. 5. Good faith: Apply the good faith standard that underlies all contract law in terms of how the parties acted in this case. Could either party have breached the covenant of good faith? What actions specifically support you conclusion? Answer: The good faith standard requires parties to act honestly and fairly. If either party acted in bad faith—such as NA failing to uphold agreements or Blackwell acting deceitfully—it could constitute a breach of the covenant of good faith. 6. Breach: Did any of the parties’ actions on either side amount to a breach of contract? Does the doctrine of anticipatory repudiation apply? Why? When, if ever, did one party anticipatorily repudiate the Employment Agreement? Answer: A breach of contract could occur if either party fails to meet their obligations. The doctrine of anticipatory repudiation applies if one party indicates they will not perform their contractual duties before the performance is due. 7. Remedies: Assuming Blackwell prevails, what remedies are available to her? Assuming NA prevails, what remedies are available to them? Answer: If Blackwell prevails, remedies might include damages for lost income or enforcement of contract terms. If NA prevails, remedies could include enforcement of the non-compete clause and possibly damages for loss of business. 8. Enforceability: Assuming that the non-compete covenant was properly formed, is it enforceable against Blackwell? What specific legitimate business interests is NA alleging? How can medical practices have trade secrets? Can a small practice actually generate enough goodwill to qualify as a legitimate business interest? What kind of investment did NA make in Blackwell that is similar to the one in the Wellspan case? Answer: The enforceability of the non-compete clause depends on its reasonableness and NA’s legitimate business interests, such as protecting trade secrets and goodwill. NA’s investment in Blackwell, such as training or marketing costs, can also support enforceability. 9. Balancing tests: How should the balancing test be applied? Does it weigh in favor of NA since they are merely attempting to protect their patient base and referral base? Since the practice is specialized, isn’t it even more important to enforce the covenant given the devastating impact that your relocation could have on their revenue from patients? Given the lack of neurologists in the region, what public policy issues apply? Shouldn’t patients choose their own physician? Answer: The balancing test considers NA’s need to protect its business interests against the impact on Blackwell’s ability to practice. Given the specialized nature of the practice and regional shortages, NA’s interest might weigh more heavily, but public policy supports patient choice. 10. Scope and Duration of Restriction: Can NA legitimately protect their interests in their patient base and referral base in entire the 50-mile radius? Couldn’t Blackwell simply locate her practice outside the restricted area? The case law does not give an exact number of years, but there are no cases that provide for a three-year covenant such as the one Blackwell signed. Is three years necessary to protect NA’s interest? Answer: NA’s restriction of a 50-mile radius should be reasonable to protect legitimate interests without being overly broad. Blackwell might relocate outside this radius, and the necessity of a three-year term should be evaluated for its proportionality to NA’s interests. 11. Non-Judicial Solution: Given the objectives of each party (e.g., NA’s desire to protect their legitimate business interest; Blackwell’s desire to practice medicine in southwestern Longville), could the parties agree to a tenable, non-judicial solution that is mutually beneficial? What terms would you propose? Answer: A non-judicial solution could involve negotiating a more limited non-compete area or duration. Terms could include reduced geographic or temporal restrictions, allowing Blackwell to practice in a way that minimally impacts NA’s business interests. Business Law Simulation Exercise for Managers: Contracts Assignment Sheet (Format F) Comparative Research Grid Introduction: In this simulation, students learn the fundamentals of legal research and then apply those skills to develop a grid/chart that compares the enforceability tests, legal standards and requirements for non-compete restrictive covenants of other jurisdictions to that of the State of Longville. Assignment:  Review Chapters 6,7, and 8, then read the Stipulated Facts and Longville cases in the simulation.  Your instructor will provide you with a brief tutorial on the use of various databases (some paid such as Lexis/Nexus® or Westlaw® if available at your institution, or free databases such as FindLaw® or the Legal Information Institute at Cornell Law School) for looking up statutory and case law.  Prepare a grid that compares the laws governing restrictive covenants in medical practices in the State of Longville with the law in your own state. Be sure to name the cases or statutes that you use as a reference to complete the grid.  The grid should be prepared as follows: Longville Your State (Name) Legitimate business interests in medical practices; (Give examples) Balancing Tests: Employer vs. Employee interests; and Employer/Employee interest verses Public interest Reasonably necessary in scope and duration (Give examples from cases) Due Date: [Instructor] Policy on late work: [Instructor] Teaching Tips:  For Graduate students or courses that have a more international law focus, the assignment may be modified to include a comparative law grid with a foreign country. Germany, Great Britain, Japan, and the United Arab Emirates all have a solid body of law covering non-compete clauses and each has a distinct cultural flavor to their rules. One of the best sources for International Law is the LII from Cornell Law found at www.cornell.edu.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks. Business Law Simulation Exercise for Managers #2: Employment Discrimination Note to the Instructor: This material is featured in the Instructor’s Manual and in online content for instructors. Students do not have access to this material. Instructor’s Overview Since at least 1970, instructors in a variety of business disciplines have been using simulations (sometimes called simulation gaming) in their courses. Business law instructors use a wide variety of simulations each with the objective of having students engage in a sequential decision-making exercise involving a legal issue that is typically covered in Legal Environment of Business/Business Law courses . Several journals, notably the Journal of Legal Studies Education, regularly feature models for use in the classroom in the form of mock hearings, moot court exercises, and negotiation exercises. However, these simulations can also be impractical for three reasons. First, the exercises are necessarily of the one-size-fits-all genre and cannot be used in settings where large numbers of students are involved. Second, the exercises sometimes tend to be too cut towards education of law students instead of business students. Finally, the simulations are sometimes taught in a vacuum because they are not tied closely enough to the textbook. The simulations in this text are specifically crafted to be: 1) flexible enough to use in a variety of classroom settings; 2) geared towards business students who are working towards a tenable solution to a legal problem as an alternative to relying on a judicial forum to resolve the dispute; 3) directly related to one or more topics covered in the textbook. Each simulation contains three parts. Part 1 provides an overview of the simulation process, offers learning objectives for the student and gives a hypothetical fact pattern describing events leading up to a legal dispute. Part 2 is a statutory excerpt and two hypothetical case summaries that give students brief facts, legal points, and short excerpts from the opinion. While these cases are hypothetical, they are based on actual cases from appellate courts in various circuits and represent a majority view. Part 3 is an assignment sheet that is featured only in the Instructor’s Manual. It contains templates for a wide selection of exercises, including teaching notes and alternative formats for using the simulation in a broad range of classroom settings. The assignment sheets are also located on the textbook’s Web site in Word format. The website may be used to generate assignment sheets (in hard copy or electronically) for students. The templates are designed to be used ‘as is’ or may be modified by the instructor to tailor to the particular needs of the course. John Falstaff v. Revere Furniture Company Business Law Simulation Exercise for Managers: Employment Discrimination INSTRUCTOR RESOURCES Table of Alternative Options for Assignments Class Characteristic Suggested Alternative Option Format Mid-sized (25-35) Format A: Arbitration Simulation Format B: Mediation Format C: Short Writing Exercise- Issue spotting Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Small or seminar (20) Format A: Arbitration Simulation Format B: Mediation Format C: Short Writing Exercise- Issue spotting Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Format F: Comparative Research Grid Fourth Credit Hour Format A: Arbitration Simulation Format B: Mediation Large lecture section Format C: Short Writing Exercise- Issue spotting Format E: Discussion Questions Graduate Format A: Arbitration Simulation Format B: Mediation Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Format F: Comparative Research Grid Instructor’s Overview: Alternative Assignment Formats Below is a short description for each alternative assignment format listed in the Alternatives Table (above). Assignment sheet templates for each of these formats are located on the textbook’s website in Word format and are fully capable of being distributed electronically, in hard copy format as written, or they may be revised by the instructor to modify for individual course needs. Format A: Arbitration Simulation In this format, students are assigned to review Chapter 13 of the text, study the stipulated facts, statutory excerpt and cases, and then participate in a mock arbitration. Students are informed that the cases should be read with an eye towards understanding the differences and similarities between the court cases and the stipulated facts in the Falstaff v. Revere Furniture Company case. Each student (or groups of students depending on class size) is assigned the role of Howe manager of Revere or as Falstaff. The parties then prepare to participate in a private arbitration narrowed down to whether Falstaff’s condition is protected by the ADA and ADAAA). The instructor (or teaching assistant) acts as the arbitrator that runs the simulation by asking the parties questions about their theories of the case and testing their knowledge of the application of statutory and case law and the ability to cite specific points of law and excerpts in explaining how the cases support their arguments or are distinguishable from their case’s facts. Students are evaluated on: a) grasp of the legal issues; b) ability to articulate an argument and respond to questions in arbitration; c) engagement in the simulation; d) ability to work as a team (if applicable). The time of arbitration is set at a maximum of 20 minutes total. Format B: Mediation In this format, students are assigned to review Chapter 13, study the Stipulated Facts, statutory excerpt and the case law, and then participate in a mock mediation. Students are informed that the cases should be read with an eye towards understanding the differences and similarities between the court cases and the stipulated facts in the Falstaff v. Revere Furniture Company case. Each student (or groups of students depending on class size) is assigned the role of Howe as manager of Revere or as Falstaff, or as a mediator assigned to the case. The instructor assumes the role of Chief Mediator and serves as a resource for the parties. The parties then prepare to participate in a private mediation narrowed down to whether Falstaff’s condition is protected by the ADA and ADAAA). Mediators negotiate a variety of alternatives that will help the parties work towards a non-judicial solution. Initially, students work outside of the classroom to begin working on proposals. They are then assigned a final attempt session at mediation where the Chief Mediator is privy to the negotiations and final resolution or deadlock. Format C: Short Writing Exercise – Issue Spotting Students are assigned first to review Chapter 13, study the Stipulated Facts, statutory excerpt and the case law. Based on their knowledge of employment discrimination law as a whole, they are then assigned to compose 3-4 page neutral memorandum that outlines each legal issue present with a short explanation of the applicable legal rules or doctrine. The sources of law for this memorandum are the textbook’s chapter on employment discrimination (Chap 13) as well as the statutory excerpt and the case law in the simulation materials. In this version of the simulation, students are not functioning as an advocate. Rather, they are being as objective as possible in spotting any and all potential issues that could arise in the case and give the analysis as to the likelihood of success on each point. Format D: Longer Writing Exercise: Advocate Memorandum Students are assigned first to review Chapter 13 and then to study the Stipulated Facts, statutory excerpt and the case law in the simulation materials. They are assigned to compose 5-7 page memorandum that advocates a particular party’s view (as assigned by instructor) on the issue of the Revere’s potential liability under the ADA and ADAAA. Students outline each legal issue applicable to a discrimination claim and support their arguments using citations to legal points and excerpts of the statutory excerpt and the case law. Students are assigned to conclude the document by suggesting any potential non-judicial solution that may mutually benefit the parties. Format E: Discussion Questions Students are assigned to review Chapter 13, then study the Stipulated Facts and the case law and to prepare for a Q & A discussion of the issues presented. Students may be assigned to either advocate one side or the other, or to provide a neutral analysis. Discussion questions include theories of liability, defenses, pretext and the regarded as standard under the ADA and ADAAA and any potential non-judicial, tenable solution that may mutually benefit the parties. Format F: Comparative Research Grid Students are assigned to review Chapter 13, then read the facts and cases in the simulation. After the instructor has given students are given a brief orientation on the use of various databases for looking up statutes and cases. Ideally, the academic universe version of Lexis and/or Westlaw should be used, but free legal research Web site services will suffice. NOTE: A listing of high-quality Web sites that provide free access to legal research and guidelines for research on the web may be found in Appendix A of the textbook: A Business Student’s Guide to Understanding Cases and Finding the Law. Students prepare a grid that compares the federal anti-discrimination statutes with the state anti-discrimination laws in their own (or pre-selected by the instructor) state. For more advanced or internationally focused programs, the instructor may also assign a comparative analysis of a foreign country’s law regarding disability protection in the workplace. ***Important Note to Instructors: The following Assignment Sheet templates are included for your purposes only. The Assignments are not featured in the student’s textbook. Typically, the student text’s Business Law Simulation Exercise would end after Part 2. Teaching tips, sample answers, sample grading guidelines and other helpful features are also included in the Instructor’s Manual only. Business Law Simulation Exercise for Managers: Employment Discrimination Assignment Sheet (Format A) Arbitration Simulation Introduction: In this simulation, students take on the role of advocates in a mock arbitration. Each individual student will be assigned to [a team of two that will] assume the role of one of the parties in the case. Additional Facts: In addition to the Stipulated Facts in Part 1, assume that Falstaff and Revere agreed that they would submit to a private arbitration. Assume further that the parties have agreed to narrow the dispute to one single issue: Is Falstqff’s condition considered a disability under the ADA? They further agreed upon the arbitrator (your instructor) and to limit the total time of the arbitration hearing to 20 minutes. Assignment: Using the statutory and case law featured in Part 2 as the reference to analyze this question, each party [team] should gain a full understanding of the Stipulated Facts, research the case law and statutes provided and prepare for an arbitration hearing. Students are strongly encouraged to use note cards or other mediums to prepare their arguments and must be prepared to cite specific points of law and/or excerpts from the cases to support arguments or defenses. Each student must be sufficiently familiar with the facts and cases during the arbitration such that each student is able to answer any questions the arbitrator will have and to justify their positions on the basis of case law and/or statutes. Criteria for grading: Students are evaluated on:  Grasp of the stipulated facts, legal issues and case law;  Ability to articulate an argument and respond to questions in arbitration;  Engagement in the simulation [and ability to work as a team]. Teaching Tips:  The Stipulated Facts are designed to have some facts that favor Falstaff’s position and some that cut towards Revere’s position. It is often a good idea to inform students that they should not only articulate their own arguments, but also to anticipate alternative arguments and questions from the arbitrator.  Instructors may wish to take special care to help students understand that this arbitration is focused Falstaff’s claim that his impairment qualifies for protection under the ADA and not on the issues in the fact pattern that could arise regarding issues that are unrelated such as pretext.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks.  In preparing for arbitrations, students sometimes are confused how to use points and facts in their arguments. Students should be encouraged to come prepared to cite to specific points of law and excerpts and to have these points prepared on note cards for the actual arbitration. Students should also be encouraged to factually distinguish any cases that do not support their arguments. That is, tell the arbitrator why one case or the other can’t be applied because it is factually different from the Falstaff v. Revere Furniture Company case.  Students benefit greatly from a separate sheet or e-mail that lists the arbitration dates, times, locations and names of who represents which party.  If students assume a fact that is not stipulated, they should be presented with the question: Where is that in the stipulated facts?  The suggested format of the arbitration is to begin with a question to Falstaff: What is the legal dispute that we are arbitrating today? Arbitrators may then ask questions that are designed to promote a step-by-step process giving equal time to each party. Issue Sample questions Disparate treatment under the McDonnell Douglass standard To Falstaff: o What theory of discrimination are you alleging under the ADA? o What is the applicable test used in this circuit for an ADA disparate treatment case? o Prong 1: Why is Revere covered by the ADA? o Prong 2: Is Falstaff’s condition a qualified disability? (See below) o Prong 3: Assuming that Falstaff meets prong 2, in what way could Revere have performed the job (what accommodations could Revere have possibly made? o Prong 4: Isn’t there a record of poor performance that led to the discharge? Isn’t that the actual reason why he was terminated? To Revere: o Assuming that the McDonnell Douglass prongs are met. What is your legitimate and non-discriminatory reason for the termination? o Could you have accommodated Falstaff by providing breaks and having another employee designated to lift heavy items? Qualified disability To Falstaff: o The 14th circuit court has specifically held that obesity is not a qualified disability. Why is this case different? o In what way does the Adams case support your position? o In what way does the impairment substantially limit a major life activity? To Revere: o Doesn’t the ADAAA cover Falstaff’s disability because his obesity interferes with the life activity described in the Act? o How does the fact that Falstaff’s obesity may be related to an actual injury (lower back sprain) impact Revere’s liability under the ADA? Regarded as test To Falstaff: o If it is determined that you are not covered as disabled under the Act, do you have an alternative theory for coverage? To Revere: o Isn’t there some indication in the Stipulated Facts that Revere supervisors believed that Falstaff could not perform his job tasks even with accommodation? Business Law Simulation Exercise for Managers: Employment Discrimination Assignment Sheet (Format B) Mediation Simulation Introduction: In this simulation, students analyze the Stipulated Facts, case law and statutes, then work towards mediating a tenable solution to the dispute using a mock mediation process. Assignment:  In addition to the Stipulated Facts in Part 1, assume that Falstaff and Revere agreed that they would submit to a private mediation. Assume further that the parties have agreed to avoid any pretext issues and narrowed the dispute to the issue of Falstaff’s claim that his impairment qualifies for protection under the ADA and that Revere failed to accommodate him.  Review the Concept Summaries and your notes from chapter 13 in the textbook.  Study the Stipulated Facts, case law and statutes in the Simulation Exercise materials.  The facts and cases should be read with the goal of understanding the differences and similarities between the court cases and the stipulated facts in the Falstaff v. Revere Furniture Company case so that groups can work towards a resolution that achieves the primary objectives of both parties.  Each student (or groups of students depending on class size) is assigned the role of Howe, as a manager of Revere, or as Falstaff, or as a mediator assigned to the case. The instructor is the Chief Mediator and will serve as a resource for the parties during the mediation process.  Participants then prepare to participate in a process designed to settle issues related to Falstaff’s claim that his impairment qualifies for protection under the ADA and that requires accommodation. Note that no other legal issues are in dispute.  Initially, participants work outside of the classroom to begin working on proposals. The mediator initiates meetings with each party separately (no more than two 30-minute meetings with each side) and then prepares a variety of alternative tenable solutions crafted to help the parties work towards a mutually agreeable solution.  After meeting separately, students will be assigned a 20-minute time slot for a “final attempt” session at mediation where all parties and the instructor are present. The Chief Mediator is present to facilitate a solution and to evaluate your negotiations and progress. A deadlock, in and of itself, does not affect your grade, so long as the parties used reasonable efforts to compromise.  The parties should attempt to draft a detailed agreement that achieves, as best as possible, the objectives of each party: For Revere compliance with the ADA and a productive employee; for Falstaff, his former position as a floor manager with reasonable accommodations.  The mediator should provide a copy of the alternative proposals for a more detailed resolution for each of the parties just prior to the final attempt session. The parties may amend the proposal by hand at the session and turn in the final product (whether agreed to by the parties or deadlock) to the instructor. Criteria for grading: Students are evaluated on their final mediation session. Specifically:  Grasp of the stipulated facts and case law;  Legal issues and ability to articulate their position in the context of achieving mutually agreeable objectives;  Negotiation skills, engagement in the simulation, and ability to work as a team.  Teaching Tips:  The Stipulated Facts are designed to have some facts that favor Revere’s position and some that cut towards Falstaff’s position. It is often a good idea to inform students that neither side has a distinct advantage and thus a deadlock would result in a significant risk of legal liability for the business and expense of litigation.  Instructors may wish to take special care to help students understand that this arbitration is focused only on Falstaff’s claim that his impairment qualifies for protection under the ADA and that Revere failed to accommodate him and not on the issues in the fact pattern that could arise regarding pretext.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks.  Instructors may wish to emphasize that a deadlock is not necessarily equated to poor performance in the simulation so long as there is evidence that the mediation took place in good faith and at arms length. On the other extreme, students should be cautioned that if the parties have concluded a one-sided deal quickly, that would have a negative impact on their grade as it indicates that no arms-length transaction took place.  Students benefit greatly from a separate sheet or e-mail that lists the mediation dates, times, locations and names of who represents what role.  At the instructor’s discretion, the mediator may be presented with the following issue/question list for use in the initial separate meeting in order to facilitate the mediation. Issue Sample questions Disparate treatment under the McDonnell Douglass standard To Falstaff: o What theory of discrimination are you alleging under the ADA? o What is the applicable test used in this circuit for an ADA disparate treatment case? o Prong 1: Why is Revere covered by the ADA? o Prong 2: Is Falstaff’s condition a qualified disability? (See below) o Prong 3: Assuming that Falstaff meets prong 2, in what way could Revere have performed the job (what accommodations could Revere have possibly made? o Prong 4: Isn’t there a record of poor performance that led to the discharge? Isn’t that the actual reason why he was terminated? To Revere: o Assuming that the McDonnell Douglass prongs are met. What is your legitimate and non-discriminatory reason for the termination? o Could you have accommodated Falstaff by providing breaks and having another employee designated to lift heavy items? Qualified disability To Falstaff: o The 14th circuit court has specifically held that obesity is not a qualified disability. Why is this case different? o In what way does the Adams case support your position? o In what way does the impairment substantially limit a major life activity? To Revere o Doesn’t the ADAAA cover Falstaff’s disability because his obesity interferes with the life activity described in the Act? o How does the fact that Falstaff’s obesity may be related to an actual injury (lower back sprain) impact Revere’s liability under the ADA? Regarded as test To Falstaff o If it is determined that you are not covered as disabled under the Act, do you have an alternative theory for coverage? To Revere o Isn’t there some indication in the Stipulated Facts that Revere supervisors believed that Falstaff could not perform his job tasks even with accommodation? Business Law Simulation Exercise for Managers: Employment Discrimination Assignment Sheet (Format C) Short Writing Exercise- Issue Spotting Introduction: In this simulation, students analyze the Stipulated Facts and Longville case law and spot as many legal issues as possible. The analysis is articulated in a 3-4 page neutral (i.e., not advocating a particular side) memorandum. Assignment:  Review the Concept Summaries and your notes from chapter 13 in the textbook.  Study the Stipulated Facts, statutory excerpt and the case law featured in Section 2 of the Simulation Exercise.  Compose 3-4 page neutral memorandum that outlines each legal issue present with a short explanation of the applicable legal rules or doctrine. The sources of law for this memorandum are the textbook’s chapter 13 as well as the case law and statutory excerpt  Note that you should not write as an advocate on one side or the other. Rather, you should be as objective as possible in spotting any and all potential issues that could arise in the case and give the analysis as to the likelihood of success of all theories. Criteria for grading:  Clarity of writing, grammar, document appearance;  Articulation of all potential issues presented;  Quality and depth of analysis. Due Date: [Instructor] Policy on Late Work: [Instructor] Teaching Tip: Students should identify and give a brief explanation of the following issues: Issue Stipulated Fact Reference (Paragraph #) Revere’s as a covered employer under the ADA 1, Falstaff’s condition as a permanent disability 7,8,9 Treatment of obesity as covered under the ADA and case law 10,11,13 Impact of ADAAA 11,15 Regarded as standard 13,13,14 Pretext 15 Reasonable accommodation 8 Remedies available N/A Business Law Simulation Exercise for Managers: Employment Discrimination Assignment Sheet (Format D) (Longer) Writing Exercise: Advocate Memorandum Introduction: In this simulation, students are asked to analyze the Stipulated Facts, a statutory excerpt and case law, then spot as many employment discrimination issues as possible, and then write a 5-7-page memorandum that advocates a particular side of the dispute. Assignment:  Review the Concept Summaries and your notes from chapter 13 in the textbook.  Study the Stipulated Facts, the statutory excerpt and the case law included in Section 2 of the Simulation Exercise.  Your instructor will assign you to advocate for either Falstaff or Revere.  Compose a 5-7-page memorandum that focuses on issue of Revere’s potential liability under the ADA and ADAAA. Your memorandum should contain: 1) a brief summary of relevant facts of the dispute; 2) an explanation of each legal issue in the analysis with an application of legal rules or doctrines governing the dispute; 3) a list of all remedies that your side is entitled to; 4) a tenable solution to resolve the dispute in a non-judicial forum. Your memorandum should articulate arguments that support your side of the case by citing directly from the statute, case points of law and opinion excerpts (use a simple parenthetical citation format with the first name of case and point/excerpt number such as Grindle at Point 2, or Adams at Excerpt b1 or ADAAA Section 2-2).  Be sure to explain why you cited a particular point. Start with your strongest argument and give an analysis as to the likelihood of success of each theory.  In determining a tenable solution, carefully consider the objectives of each party (e.g., For Revere, compliance with the ADA and a productive employee; for Falstaff, his former position as a floor manager with reasonable accommodations).  Grading Criteria: See Memorandum Evaluation form (Attachment A) for specific factors used in evaluating your memorandum. Due Date: [Instructor] Policy on Late Work: [Instructor] Attachment “A” ________________________________________________________________________ Memorandum Evaluation Student: ________________________ Possible Score Facts 5 Relevant summary of facts used throughout analysis Analysis 10 Demonstrated understanding of McDonnell Douglass application 5 Demonstrated understanding of Regarded as Test and pretext 5 Demonstrated understanding of the impact of the ADAAA on the dispute 5 Used case law to support points 5 Offered a tenable non-judicial solution Writing style 10 Sentences were direct, clear and concise with appropriate syntax and legal expression 5 Paper format and appearance Comments: Total 50 Business Law Simulation Exercise for Managers: Employment Discrimination Assignment Sheet (Format E) Discussion Questions Introduction: In this simulation, students prepare for a question and answer session based on issues presented by the Stipulated Facts in the Falstaff v. Revere case. Assignment:  Review the Concept Summaries and your notes from chapter 13 in this textbook.  Study the Stipulated Facts, statutory excerpt and the case law in Parts 1 and 2 of the Simulation Exercise.  Be prepared to discuss the following questions: Questions: 1) Coverage: Is Revere within the jurisdiction of the ADA? Why? Answer: Revere is within ADA jurisdiction if it meets the threshold criteria of having a sufficient number of employees and engaging in interstate commerce. 2) Theory of discrimination: What theory of discrimination under the ADA is Falstaff alleging? Answer: Falstaff alleges discrimination based on a disability under the ADA, which requires proving that the disability substantially limits a major life activity. 3) McDonnell-Douglass test: What is necessary to make out an ADA claim under McDonnell-Douglass? Does Falstaff meet all four prongs of the test? Answer: To establish an ADA claim under McDonnell-Douglas, Falstaff must show he has a disability, was qualified for the job, faced an adverse employment action, and was treated differently from similarly situated employees. Falstaff's case must meet these prongs to proceed. 4) Qualified disability: Under the current case law in the 14th circuit, is Falstaff’s condition a qualified disability? How does the Adams case support Falstaff’s claims? How is the Adams case different from Falstaff’s? How does the fact that Falstaff’s obesity may be related to his lower back injury impact your analysis? In what way does Falstaff’s disability interfere with the life activity requirements as described in the ADA? Answer: Under current case law, Falstaff's condition might qualify as a disability if it substantially limits a major life activity. The Adams case supports Falstaff by recognizing certain conditions as disabilities, though Adams involved different circumstances. Falstaff’s obesity and its connection to his back injury complicate the analysis of substantial limitation. 5) ADAAA: How does the passage of the ADAAA impact Revere’s liability under the ADA for Falstaff’s disability? What parts of the statute are applicable to the Falstaff v. Revere matter? Answer: The ADAAA broadens the definition of disability, potentially increasing Revere’s liability by requiring greater accommodation and broader interpretations of what constitutes a disability. Key statutory changes affecting Falstaff’s case include expanded definitions and protections. 6) Reasonable accommodations. Did Revere take steps to accommodate Falstaff? If not, what accommodations would be reasonable? Answer: Revere must demonstrate whether it took reasonable steps to accommodate Falstaff’s disability, such as modified duties or work conditions. If not, accommodations might include job restructuring or additional support. 7) “Regarded as” test: Is there some indication in the Stipulated Facts that Revere supervisors believed that Falstaff could not perform his job tasks even with accommodation? How does the ADAAA impact the “regarded as” analysis. Answer: If Revere supervisors believed Falstaff could not perform his job even with accommodations, it suggests a "regarded as" discrimination claim. The ADAAA broadens the scope of “regarded as” to include more conditions and misconceptions. 8) Pretext: Is there any indication that Revere’s reasons for terminating Falstaff were pre-textual? Is Falstaff’s misconduct at issue? Answer: There must be evidence that Revere’s reasons for terminating Falstaff were pretextual, meaning not genuinely related to performance or conduct. Falstaff’s misconduct, if relevant, must be evaluated against the alleged discriminatory motives. 9) Business necessity: What business necessity defense could Revere articulate for requirements related to Falstaff’s position? Answer: Revere could argue that job requirements are essential for operational efficiency or safety, providing a business necessity defense. They must prove that the requirements are crucial for the position’s performance. Teaching Tip: Students sometimes benefit from being assigned to either advocate one side or the other, or to provide a neutral analysis. Depending on time constraints, instructors may wish to assign only questions dealing with the ADA Disparate Treatment factors [3-5]. SAMPLE ANSWERS AND REFERENCES FOR DISCUSSION QUESTIONS (Format E) Question 1: Revere, the employer, is covered by the ADA because the Act requires employers with 15 or more employees to make reasonable accommodations for a disabled employee. Revere has 800 employees [Stip. Fact 1]. Question 2: Falstaff is alleging that he was terminated due to his disability (overt discrimination), so the theory of discrimination is disparate treatment. Falstaff could also allege that his termination were a combination of legitimate motives (cutting costs) with illegitimate motives (disability) under a mixed motives theory. Question 3: According to Grindle v. Watkins, courts use the McDonnell Douglas test to analyze an ADA claim. The four prongs are:  Employer covered by ADA  Plaintiff is disabled within the meaning of the ADA  Plaintiff could have performed the job with reasonable accommodations  Plaintiff was subject to adverse employment action due to the disability While the first prong is easily met, the second is more problematic. In Grindle, the 14th Circuit specifically held that obesity was not a covered disability. However, after the passage of the ADAAA, the Act’s focus is not on specific conditions, but rather on whether or not the disability “substantially limits a major life activity.” Questions 4 and 5: In Grindle, the 14th Circuit specifically held that obesity was not a covered disability. However, after the passage of the ADAAA, the Act’s focus is not on specific conditions, but rather on whether or not the disability “substantially limits a major life activity.” The ADAAA covers certain disabilities that substantially limit one or more major life activities (impairment). The Adams case supports Falstaff’s claim by expanding the definitional framework of the ADA. The ADAAA specifically adds the several activities that had not been previously recognized [Adams, Point b]. On the other hand, Adams involves a diabetes patient that required insulin and meals on a set schedule. No such burden is placed on Falstaff. Falstaff’s condition, though, clearly affect his life activities such as sitting or standing for extended periods [Stip. Fact 5 and 6]. Although some may point to the “exclusion” in Section 5 of the ADAAA, it is important to realize that this only applies to ADA claims related to the “regarded as” test. There is also a causation issue: Did the back injury cause the obesity or did the obesity cause the back injury? Further, Section 6 makes clear the legislative intent to favor broad coverage of the Act. This favors Falstaff’s claim. Question 6 Falstaff’s position would be that they did not reasonably accommodate his disability. In Stip. Fact #13, he makes clear that his management duties could be carried out so long as he is not required to do any heavy lifting. Stip. Fact 7 indicates that Revere did give Falstaff light duty, but this was temporary and they made no further effort to accommodate him (e.g., arranging lighter duties and administrative tasks). Question 7 The ADA covers an employee even in cases where the employer regards the employee as disabled (“Regarded as” test). Stip. Fact 13 indicates that Falstaff’s manager, after reviewing Dr. King’s report, expressed concern that the employee may “not be able to fully perform the duties required.” This is evidence that, even if Falstaff was not classified as “disabled,” his employer regarded him as disabled. This fact strengthens Falstaff’s position under the “regarded as” theory. According to Adams, the regarded as standards were expanded by the ADAAA and the evidence of the employer’s actions are similar to the Falstaff/Revere case [Point c]. Question 8 Stip. Fact 9 provides evidence that the employer’s reasons were not pre-textual because they began to document his unsatisfactory performance at least 3 months ahead of the termination and that poor performance was a primary motive in terminating Falstaff. However, Falstaff would argue that this poor performance stemmed from his disability and that Revere’s failure to accommodate him caused his performance to deteriorate to the point of termination. The timeline from the stipulated facts is important: July 2008 to May 2009 June 2009 July 2009 July, Aug. 2009 Sept. 1, 2009 October 2009 December 2009 Favorable reviews Back injury- six consecutive sick days Diagnosed with mild sprain and given temporary accommodation of “light duty.” Arriving late for work. Complains of back pain. Unable to arrange displays etc. Falstaff give Correction Action letter documenting poor performance. Second doctor: Obesity is significant factor in Falstaff’s health. Falstaff terminated by Revere citing poor performance and cost cutting. Question 9 Business necessity is used by an employer as a defense to discrimination on the basis that it is legitimately necessary to the business operations of the company. It is typically used as a defense in a disparate impact claim, but in this context Revere would likely argue that certain physical requirement were a business necessity. The physical requirements of the position were set out in the job posting [Stip. Facts: Exhibit A]. The posting makes clear that long periods of standing and lifting were a requirement for the job. Business Law Simulation Exercise for Managers: Employment Discrimination Assignment Sheet (Format F) Comparative Research Grid Introduction: In this simulation, students learn the fundamentals of legal research and then apply those skills to develop a grid/chart that compares the enforceability tests, legal standards and requirements under federal anti-discrimination statutes and case law to the state anti-discrimination protections in a particular jurisdiction. Assignment:  Review chapter 13, then read the Stipulated Facts, statutory excerpt, and case law in Parts 1 and 2 in this Simulation Exercise.  Read Appendix A of your textbook: “A Business Student’s Guide to Understanding Cases and Finding the Law.” [alternative: Your instructor may also provide you with a brief tutorial on the use of various databases such as Lexis/Nexus® or Westlaw® available at your institution] for performing basic legal research.  Prepare a grid that compares the federal antidiscrimination laws with the law in your own state. Be sure to name the cases or statutes that you use as a reference to complete the grid.  The grid should be prepared as follows: Federal Anti-discrimination Law Your State (Name) Similarities Distinctions Title VII: Protected classes: Race, Color National Origin, Gender, Religion and Pregnancy) Age Discrimination in Employment Act (ADEA) American with Disabilities Act (as amended by the ADAAA of 2008) Business necessity defense BFOQ defense Due Date: [Instructor] Policy on late work: [Instructor] Teaching Tips:  For Graduate students or courses that have a more international law focus, the assignment may be modified to include a comparative law grid with a foreign country. Germany, Great Britain, Japan, and the United Arab Emirates all have a solid body of law covering discrimination in the workplace and each has a distinct cultural flavor to their rules. Appendix A in Chapter 1 of the textbook: “A Business Student’s Guide to Understanding Cases and Finding the Law” provides several high-quality, free Web sites for legal research.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks. Business Law Simulation Exercise for Managers #3: Trademarks in Cyberspace Note to the Instructor: This material is featured in the Instructor’s Manual and in online content for instructors. Students do not have access to this material. Instructor’s Overview Since at least 1970, instructors in a variety of business disciplines have been using simulations (sometimes called simulation gaming) in their courses. Business law instructors use a wide variety of simulations each with the objective of having students engage in a sequential decision-making exercise involving a legal issue that is typically covered in Legal Environment of Business/Business Law courses . Several journals, notably the Journal of Legal Studies Education, regularly feature models for use in the classroom in the form of mock hearings, moot court exercises, and negotiation exercises. However, these simulations can also be impractical for three reasons. First, the exercises are necessarily of the one-size-fits-all genre and cannot be used in settings where large numbers of students are involved. Second, the exercises sometimes tend to be too cut towards education of law students instead of business students. Finally, the simulations are sometimes taught in a vacuum because they are not tied closely enough to the textbook. The simulations in this text are specifically crafted to be: 1) flexible enough to use in a variety of classroom settings; 2) geared towards business students who are working towards a tenable solution to a legal problem as an alternative to relying on a judicial forum to resolve the dispute; 3) directly related to one or more topics covered in the textbook. Each simulation contains three parts. Part 1 provides an overview of the simulation process, offers learning objectives for the student and gives a hypothetical fact pattern describing events leading up to a legal dispute. Part 2 is composed of two hypothetical case summaries that give students brief facts, legal points, and short excerpts from the opinion. While these cases are hypothetical, they are based on actual cases from appellate courts in various circuits and represent a majority view. Part 3 is an assignment sheet that is featured only in the Instructor’s Manual. It contains templates for a wide selection of exercises, including teaching notes and alternative formats for using the simulation in a broad range of classroom settings. The assignment sheets are also located on the textbook’s Web site in Word format. The website may be used to generate assignment sheets (in hard copy or electronically) for students. The templates are designed to be used ‘as is’ or may be modified by the instructor to tailor to the particular needs of the course. Cool Runnings v. BigBuy.com Business Law Simulation Exercise for Managers: Trademarks in Cyberspace IINSTRUCTOR RESOURCES Table of Alternative Options for Assignments Class Characteristic Suggested Alternative Option Format Mid-sized (25-35) Format A: Arbitration Simulation Format B: Mediation Format C: Short Writing Exercise- Issue spotting Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Small or seminar (20) Format A: Arbitration Simulation Format B: Mediation Format C: Short Writing Exercise- Issue spotting Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Format F: Comparative Research Grid Fourth Credit Hour Format A: Arbitration Simulation Format B: Mediation Large lecture section Format C: Short Writing Exercise- Issue spotting Format E: Discussion Questions Graduate Format A: Arbitration Simulation Format B: Mediation Format D: Longer Writing Exercise- Advocate Memorandum Format E: Discussion Questions Format F: Comparative Research Grid Instructor’s Overview: Alternative Assignment Formats Below is a short description for each alternative assignment format listed in the Alternatives Table (above). Assignment sheet templates for each of these formats are located on the textbook’s Web site in Word format and are fully capable of being distributed electronically, in hard copy format as written, or they may be revised by the instructor to modify for individual course needs. Format A: Arbitration Simulation In this format, students are assigned to review Chapter 25 of the text, study the stipulated facts and case law, and then participate in a mock arbitration. Students are informed that the cases should be read with an eye towards understanding the differences and similarities between the court cases and the stipulated facts in the Cool Runnings v. BigBuy.com case. Each student (or groups of students depending on class size) is assigned the role of manager at BigBuy.com or as a manager at Cool Runnings. The parties then prepare to participate in a private arbitration to resolve the dispute. The instructor (or teaching assistant) acts as the arbitrator that runs the simulation by asking the parties questions about their theories of the case and testing their knowledge of the application of the case law and the ability to cite specific points of law and excerpts in explaining how the cases support their arguments or are distinguishable from their case’s facts. Students are evaluated on: a) grasp of the legal issues; b) ability to articulate an argument and respond to questions in arbitration; c) engagement in the simulation; d) ability to work as a team (if applicable). The time of arbitration is set at a maximum of 20 minutes total. Format B: Mediation In this format, students are assigned to review Chapter 25, study the Stipulated Facts, and the Case Law sections of the simulation materials in the textbook, and then participate in a mock mediation. Students are informed that the cases should be read with an eye towards understanding the differences and similarities between the court cases and the stipulated facts in the Cool Runnings v. BigBuy.com case. Each student (or groups of students depending on class size) is assigned the role of manager for Cool Runnings, or as manager at BigBuy.com, or as a mediator assigned to the case. The instructor assumes the role of Chief Mediator and serves as a resource for the parties. The parties then prepare to participate in a private mediation narrowed down to whether Cool Runnings’ business model infringes on the trademark of Cool Runnings. Mediators negotiate a variety of alternatives that will help the parties work towards a non-judicial solution. Initially, students work outside of the classroom to begin working on proposals. They are then assigned a final attempt session at mediation where the Chief Mediator is privy to the negotiations and final resolution or deadlock. Format C: Short Writing Exercise – Issue Spotting Students are assigned first to review Chapter 25, and then to study the Stipulated Facts and case law. Based on their knowledge of trademark law as a whole, they are then assigned to compose 3-4 page neutral memorandum that outlines each legal issue present with a short explanation of the applicable legal rules or doctrine. The sources of law for this memorandum are the textbook’s chapter on intellectual property (Chap 25) as well as the case law in the simulation materials. In this version of the simulation, students are not functioning as an advocate. Rather, they are being as objective as possible in spotting any and all potential issues that could arise in the case and give the analysis as to the likelihood of success on each point. Format D: Longer Writing Exercise: Advocate Memorandum Students are assigned first to review Chapter 25 and then to study the Stipulated Facts and the case law in the simulation materials. They are assigned to compose 5-7 page memorandum that advocates a particular party’s view (as assigned by instructor) on the issue of the potential trademark infringement in the Cool Runnings v. BigBuy.com case. Students outline each legal issue applicable to a trademark infringement claim and support their arguments using citations to legal points and excerpts of the case law. Students are assigned to conclude the document by suggesting any potential non-judicial solution that may mutually benefit the parties. Format E: Discussion Questions Students are assigned to review Chapter 25, then study the Stipulated Facts and the case law and to prepare for a Q & A discussion of the issues presented. Students may be assigned to either advocate one side or the other, or to provide a neutral analysis. Discussion questions include definition of “used in commerce”, confusion, initial interest confusion, comparative advertising, machine-linking functions, defenses to infringement, and any potential non-judicial, tenable solution that may mutually benefit the parties. Format F: Comparative Research Grid Students are assigned to review Chapter 25, then read the facts and cases in the simulation. After the instructor has given students are given a brief orientation on the use of various databases for looking up statutes and cases. Ideally, the academic universe version of Lexis and/or Westlaw should be used, but free legal research Web site services will suffice. NOTE: A listing of high-quality Web sites that provide free access to legal research and guidelines for research on the web may be found in Appendix to Chapter 1 of the textbook: A Business Student’s Guide to Understanding Cases and Finding the Law. Students prepare a grid that compares the federal trademark laws with any foreign country’s law that protects trademarks. In what ways are the standards for protection the same and in what ways are the different? How do infringement standards compare? ***Important Note to Instructors: The following Assignment Sheet templates are included for your purposes only. The Assignments are not featured in the student’s textbook. Typically, the student text’s Business Law Simulation Exercise would end after Part 2. Teaching tips, sample answers, sample grading guidelines and other helpful features are also included in the Instructor’s Manual only. Business Law Simulation Exercise for Managers: Trademarks in Cyberspace Assignment Sheet (Format A) Arbitration Simulation Introduction: In this simulation, students take on the role of advocates in a mock arbitration. Each individual student will be assigned to [a team of two that will] assume the role of one of the parties in the case. Additional Facts: In addition to the Stipulated Facts in Part 1, assume that Cool Runnings and BigBuy.com agreed that they would submit to a private arbitration. Assume further that the parties have agreed to narrow the dispute to one issue: Does BigBuy.com’s business model infringe on the trademark of Cool Runnings? They further agreed upon the arbitrator (your instructor) and to limit the total time of the arbitration hearing to 20 minutes. Assignment: Using the case law featured in Part 2 as the reference to analyze this question, each party [team] should gain a full understanding of the Stipulated Facts, research the case law provided and prepare for an arbitration hearing. Students are strongly encouraged to use note cards or other mediums to prepare their arguments and must be prepared to cite specific points of law and/or excerpts from the cases to support arguments or defenses. Each student must be sufficiently familiar with the facts and cases during the arbitration such that each student is able to answer any questions the arbitrator will have and to justify their positions on the basis of case law and/or statutes. Criteria for grading: Students are evaluated on:  Grasp of the stipulated facts, legal issues, and case law;  Ability to articulate an argument and respond to questions in arbitration;  Engagement in the simulation [and ability to work as a team]. Teaching Tips:  The Stipulated Facts are designed to have some facts that favor Cool Runnings’ position and some that cut towards BigBuy.com’s position. It is often a good idea to inform students that they should not only articulate their own arguments, but also to anticipate alternative arguments and questions from the arbitrator.  Instructors may wish to take special care to help students understand that this arbitration is focused on the trademark use and infringement issues and not on the issues in the fact pattern that could arise regarding issues that are unrelated.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks.  In preparing for arbitrations, students sometimes are confused how to use points and facts in their arguments. Students should be encouraged to come prepared to cite to specific points of law and excerpts and to have these points prepared on note cards for the actual arbitration. Students should also be encouraged to factually distinguish any cases that do not support their arguments. That is, tell the arbitrator why one case or the other can’t be applied because it is factually different from the Cool Runnings v. BigBuy.com case.  Students benefit greatly from a separate sheet or e-mail that lists the arbitration dates, times, locations and names of who represents which party.  If students assume a fact that is not stipulated, they should be presented with the question: Where is that in the stipulated facts?  The suggested format of the arbitration is to begin with a question to Cool Runnings: What is the legal dispute that we are arbitrating today? Arbitrators may then ask questions that are designed to promote a step-by-step process giving equal time to each party. Issue Sample questions Used in commerce To Cool Runnings: o In order to violate the Lanham Act, Big Buy has to have used the mark “in commerce.” How did they do that here? o What is the applicable test for “used in commerce” under the case law? o Isn’t this case the same as the Truck Rental case decided by the Western District? If so, shouldn’t we adopt their interpretation as compelling? o Isn’t BigBuy’s use of the mark a “pure machine linking function” which does not constitute use? To BigBuy.com: o Is your use of the mark the same or factually different than The 1-800 lenses case? Why is it different? o If a computer user types in www.CoolRunnings.com, it generates a pop-up window that I used to sell products. That sounds like commerce to me—how could that fall outside the Lanham Act? o The bottom line is that you are using their mark to generate profits for you and your clients—isn’t that “use in commerce?” Confusion To: Cool Runnings: o Is there any evidence that any consumers were actually confused as to the source of goods in question? o What type of confusion are you alleging took place here? o In order to support your claim of infringement, you must show the probability, not merely the possibility, of confusion. What facts weigh in your favor? To BigBuy.com o While actual confusion may be difficult to prove, isn’t there a strong showing of initial interest confusion here? o Isn’t the whole idea behind your business model to actually generate confusion by diverting computer users to your paying clients? To both parties: o Pick out two of seven factors that courts use to assess the likelihood of consumer confusion. Which two factors favor your theory of the case (likelihood of confusion versus non-likelihood)? Comparative advertising To Cool Runnings o Just because your mark is used simultaneously with other marks is not sufficient to constitute infringement. Isn’t this just comparative advertising? Isn’t that good for competition? o Does BigBuy’s program hinder or impede the users from accessing Cool Runnings Website. o Isn’t this just BigBuy’s attempt to place a product on the virtual shelf next to your just as bricks and mortar stores do on their own shelves? To Big Buy o Aren’t you really using Cool Runnings to give your clients an advantage over Cool Runnings? o Comparative advertising require that you not “engender confusion about the origin or quality” –but that is precisely what are trying to do isn’t it (i.e., ender confusion about origin)? Business Law Simulation Exercise for Managers: Trademarks in Cyberspace Assignment Sheet (Format B) Mediation Simulation Introduction: In this simulation, students analyze the Stipulated Facts, case law and statutes, then work towards mediating a tenable solution to the dispute using a mock mediation process. Assignment:  In addition to the Stipulated Facts in Part 1, assume that Cool Runnings and BigBuy.com agreed that they would submit to a private mediation. Assume further that the parties have agreed to narrowed the dispute to the issue of Cool Runnings’ claim that BigBuy.com’s business model infringes upon their trademark.  Review the Concept Summaries and your notes from chapter 25 in the textbook.  Study the Stipulated Facts, case law and statutes in the Simulation Exercise materials.  The facts and cases should be read with the goal of understanding the differences and similarities between the court cases and the stipulated facts in the Cool Runnings v. BigBuy.com case so that groups can work towards a resolution that achieves the primary objectives of both parties.  Each student (or groups of students depending on class size) is assigned the role of manager of BigBuy.com, or as manager of Cool Runnings, or as a mediator assigned to the case. The instructor is the Chief Mediator and will serve as a resource for the parties during the mediation process.  Participants then prepare to participate in a process designed to settle issues related to Cool Runnings’ claim that BigBuy.com’s business model infringes on the Cool Runnings trademark. Note that no other legal issues are in dispute.  Initially, participants work outside of the classroom to begin working on proposals. The mediator initiates meetings with each party separately (no more than two 30-minute meetings with each side) and then prepares a variety of alternative tenable solutions crafted to help the parties work towards a mutually agreeable solution.  After meeting separately, students will be assigned a 20-minute time slot for a “final attempt” session at mediation where all parties and the instructor are present. The Chief Mediator is present to facilitate a solution and to evaluate your negotiations and progress. A deadlock, in and of itself, does not affect your grade, so long as the parties used reasonable efforts to compromise.  The parties should attempt to draft a detailed agreement that achieves, as best as possible, the objectives of each party: For BigBuy.com a business model that achieves their objectives without infringement; for Cool Runnings, protection of the trademark with reasonable accommodation for non-commercial use of the mark.  The mediator should provide a copy of the alternative proposals for each of the parties just prior to the final attempt session. The parties may amend the proposal by hand at the session and turn in the final product (whether agreed to by the parties or deadlock) to the instructor. Criteria for grading: Students are evaluated on their final mediation session. Specifically:  Grasp of the stipulated facts and case law;  Legal issues and ability to articulate their position in the context of achieving mutually agreeable objectives;  Negotiation skills, engagement in the simulation, and ability to work as a team. Teaching Tips:  The Stipulated Facts are designed to have some facts that favor BigBuy.com’s position and some that cut towards Cool Runnings’ position. It is often a good idea to inform students that neither side has a distinct advantage and thus a deadlock would result in a significant risk of legal liability for the business and expense of litigation.  Instructors may wish to take special care to help students understand that this arbitration is focused only on Cool Runnings’ infringement claim and not on the issues in the fact pattern that could arise.  Instructors in certain classroom settings may wish to consider combining this format with one of the writing formats over a period of several weeks.  Instructors may wish to emphasize that a deadlock is not necessarily equated to poor performance in the simulation so long as there is evidence that the mediation took place in good faith and at arm’s length. On the other extreme, students should be cautioned that if the parties have concluded a one-sided deal quickly, that would have a negative impact on their grade as it indicates that no arms-length transaction took place.  Students benefit greatly from a separate sheet or e-mail that lists the mediation dates, times, locations and names of who represents what role.  At the instructor’s discretion, the mediator may be presented with the following issue/question list for use in the initial separate meeting in order to facilitate the mediation. Issue Sample questions Used in commerce To Cool Runnings: o In order to violate the Lanham Act, BigBuy has to have used the mark “in commerce.” How did they do that here? o What is the applicable test for “used in commerce” under the case law? o Isn’t this case the same as the Truck Rental case decided by the Western District? If so, shouldn’t we adopt their interpretation as compelling? o Isn’t BigBuy’s use of the mark a “pure machine linking function” which does not constitute use? To BigBuy.com: o Is your use of the mark the same or factually different than The 1-800 lenses case? Why is it different? o If a computer user types in www.CoolRunnings.com, it generates a pop-up window that I used to sell products. That sounds like commerce to me—how could that fall outside the Lanham Act? o The bottom line is that you are using their mark to generate profits for you and your clients—isn’t that “use in commerce?” Confusion To: Cool Runnings: o Is there any evidence that any consumers were actually confused as to the source of goods in question? o What type of confusion are you alleging took place here? o In order to support your claim of infringement, you must show the probability, not merely the possibility, of confusion. What facts weigh in your favor? To BigBuy.com o While actual confusion may be difficult to prove, isn’t there a strong showing of initial interest confusion here? o Isn’t the whole idea behind your business model to actually generate confusion by diverting computer users to your paying clients? To both parties: o Pick out two of seven factors that courts use to assess the likelihood of consumer confusion. Which two factors favor your theory of the case (likelihood of confusion versus non-likelihood)? Comparative advertising To Cool Runnings o Just because your mark is used simultaneously with other marks is not sufficient to constitute infringement. Isn’t this just comparative advertising? Isn’t that good for competition? o Does BigBuy’s program hinder or impede the users from accessing Cool Runnings Website. o Isn’t this just BigBuy’s attempt to place a product on the virtual shelf next to your just as bricks and mortar stores do on their own shelves? To Big Buy o Aren’t you really using Cool Runnings to give your clients an advantage over Cool Runnings? o Comparative advertising require that you not “engender confusion about the origin or quality” –but that is precisely what are trying to do isn’t it (i.e., ender confusion about origin)? Business Law Simulation Exercise for Managers: Trademarks in Cyberspace Assignment Sheet (Format C) Short Writing Exercise- Issue Spotting Introduction: In this simulation, students analyze the Stipulated Facts and Longville case law and spot as many legal issues as possible. The analysis is articulated in a 3-4 page neutral (i.e., not advocating a particular side) memorandum. Assignment:  Review the Concept Summaries and your notes from chapter 25 in the textbook.  Study the Stipulated Facts and the case law featured in Section 2 of the Simulation Exercise.  Compose 3-4 page neutral memorandum that outlines each legal issue present with a short explanation of the applicable legal rules or doctrine. The sources of law for this memorandum are the textbook’s chapter 25 as well as the case law in the Part 2 of the simulation material.  Note that you should not write as an advocate on one side or the other. Rather, you should be as objective as possible in spotting any and all potential issues that could arise in the case and give the analysis as to the likelihood of success of all theories. Criteria for grading:  Clarity of writing, grammar, document appearance;  Articulation of all potential issues presented;  Quality and depth of analysis. Due Date: [Instructor] Policy on Late Work: [Instructor] Business Law Simulation Exercise for Managers: Trademarks in Cyberspace Assignment Sheet (Format D) (Longer) Writing Exercise: Advocate Memorandum Introduction: In this simulation, students are asked to analyze the Stipulated Facts and case law, then spot as many trademark related issues as possible, and then write a 5-7-page memorandum that advocates a particular side of the dispute. Assignment:  Review the Concept Summaries and your notes from chapter 25 in the textbook.  Study the Stipulated Facts and the case law include in Section 2 of the Simulation Exercise.  Your instructor will assign you to advocate for either Cool Runnings or BigBuy.com.  Compose a 5-7-page memorandum that focuses on issue of BigBuy.com’s potential liability under the Lanham Act. Your memorandum should contain: 1) a brief summary of relevant facts of the dispute; 2) an explanation of each legal issue in the analysis with an application of legal rules or doctrines governing the dispute; 3) a list of all remedies that your side is entitled to; 4) a tenable solution to resolve the dispute in a non-judicial forum. Your memorandum should articulate arguments that support your side of the case by citing directly from the case points of law and opinion excerpts (use a simple parenthetical citation format with the first name of case and point/excerpt number such as Truck Rental International at Point b, or 1-800 Lenses at Excerpt (a2)).  Be sure to explain why you cited a particular point. Start with your strongest argument and give an analysis as to the likelihood of success of each theory.  In determining a tenable solution, carefully consider the objectives of each party.  Grading Criteria: See Memorandum Evaluation form (Attachment A) for specific factors used in evaluating your memorandum. Due Date: [Instructor] Policy on Late Work: [Instructor] Attachment “A” ________________________________________________________________________ Memorandum Evaluation Student: ________________________ Possible Score Facts 5 Relevant summary of facts used throughout analysis Analysis 5 Demonstrated understanding of “use in commerce” issues 10 Demonstrated understanding of likelihood of confusion standards 5 Demonstrated understanding of comparative advertising defense 5 Used case law to support points 5 Offered a tenable non-judicial solution Writing style 10 Sentences were direct, clear and concise with appropriate syntax and legal expression 5 Paper format and appearance Comments: Total 50 Business Law Simulation Exercise for Managers: Trademarks in Cyberspace Assignment Sheet (Format E) Discussion Questions Introduction: In this simulation, students prepare for a question and answer session based on issues presented by the Stipulated Facts in the Cool Runnings v. BigBuy.com case. Assignment:  Review the Concept Summaries and your notes from chapter 25 in this textbook.  Study the Stipulated Facts and the case law in Parts 1 and 2 of the Simulation Exercise.  Be prepared to discuss the following questions: A. Use in Commerce 1) In order to violate the Lanham Act, they have to have used the mark “in commerce.” How did BigBuy.com use the mark? 2) What is the applicable test for “used in commerce” under the case law? 3) Isn’t this case the same as the Truck Rental case decided by the Western District? If so, shouldn’t we adopt their interpretation as use? Why or why not? 4) Isn’t BigBuy’s use of the mark a “pure machine linking function” which does not constitute use? 5) Is the use of the mark the same or factually different than The 1-800 lenses case? Why is it different or similar? 6) If a computer user types in www.CoolRunnings.com, it generates a pop-up window that I used to sell products. How could that fall outside the Lanham Act? 7) The bottom line is that BigBuy is using Cool Runnings’ mark to generate profits—isn’t that “use in commerce?” B. Consumer Confusion 1) Is there any evidence that any consumers were actually confused as to the source of goods in question? 2) What type of confusion took place here? 3) In order to support a claim of infringement, the probability, not merely the possibility, of confusion must be shown. What facts weigh in each party’s favor? 4) While actual confusion may be difficult to prove, isn’t there a strong showing of initial interest confusion here? Why or why not? 5) Isn’t the whole idea behind BigBuy’s business model to actually generate confusion by diverting computer users to their paying clients? 6) Pick out two of seven factors that courts use to assess the likelihood of consumer confusion. Which two factors favor each side’s theory of the case (likelihood of confusion versus non-likelihood)? C. Comparative advertising 1) Just because the Cool Runnings mark is used simultaneously with other marks is not sufficient to constitute infringement. Isn’t BigBuy’s business model just comparative advertising? Isn’t that good for competition? 2) Does BigBuy’s program hinder or impede the users from accessing Cool Runnings Web site. 3) Isn’t this just BigBuy’s attempt to place a product on the virtual shelf next to your just as bricks and mortar stores do on their own shelves? 4) Does BigBuy’s business model give an unfair advantage to their clients over Cool Runnings by actually using the Cool Runnings trademark? 5) Doesn’t comparative advertising require that BigBuy not “engender confusion about the origin or quality” –but that is precisely what they are trying to do isn’t it (i.e., ender confusion about origin)? Teaching Tip: Students sometimes benefit from being assigned to either advocate one side or the other, or to provide a neutral analysis. Depending on time constraints, instructors may wish to assign only questions dealing with the “likelihood of confusion” factors. Business Law Simulation Exercise for Managers: Trademarks in Cyberspace Assignment Sheet (Format F) Comparative Research Grid Introduction: In this simulation, students learn the fundamentals of legal research and then apply those skills to develop a global comparison grid/chart that compares the enforceability tests, legal standards, and requirements under U.S. trademark laws to similar protections in foreign countries. Assignment:  Review chapter 25, then read the Stipulated Facts and case law in Parts 1 and 2 in this Simulation Exercise.  Read Appendix A of your textbook: “A Business Student’s Guide to Understanding Cases and Finding the Law.” [alternative: Your instructor may also provide you with a brief tutorial on the use of various databases such as Lexis/Nexus® or Westlaw® available at your institution] for performing basic legal research.  Prepare a grid that compares U.S. trademark laws with the law in Japan, the European Union, and one country of your own choosing. Be sure to name the cases or statutes that you use as a reference to complete the grid.  The grid should be prepared as follows: Trademark issue U.S Japan E.U. Chosen country Standards for obtaining protection Strength and duration of protection Infringement standards Trademarks in cyberspace International Treaty Members Due Date: [Instructor] Policy on late work: [Instructor] Solution Manual for The Legal Environment of Business: A Managerial Approach: Theory to Practice Sean P. Melvin, Michael A. Katz 9780078023804