Recognizing_and_Minimizing_Tort_and_Regulatory_Risk_Plan

Recognizing and Minimizing Tort and Regulatory Risk Plan Running a company is not as easy as some may think. Companies have to contend with many different issues. The goal of a company may be to create a product that the public needs and also hopefully brings wealth and prosperity to the local community. To accomplish these goals, company executives must find ways of minimizing company liability. Minimizing company liability can cover many areas from environmental regulations to tort violations. For this plan, Alumina, Inc. will be used as an example. Alumina is a company on the fringe of Lake Dira, in the state of Erehwon. Alumina is an industry that manufacturers automotive components. The company operates in eight countries with 70% of sales coming from the United States. The company handles bauxite mining, alumina refining, and smelting. Industrial companies such as Alumina must be aware of the industrial waste that they are producing in the creating of a product. The EPA is a regulatory agency designed to regulate what are safe levels of pollutants and how much it can be put into the environment without causing damage to the health of the public. Five years ago, the Environmental Protection Agency, or EPA, found that the PAH concentration was too high. Alumina complied with the EPA to keep PAH levels down to acceptable levels. Since then, Alumina’s executive staff, Roger Lloyd, Chairman; Chris Blake, Chief Operating Officer; Diane Richards, Head of Public Relations; and Arthur Todd, Legal Council have worked diligently to make sure there are no more occurrences of excessive industrial waste polluting Lake Dira. Kelly Bates, a 38-year-old mother is considering suing Alumina for causing her 10-year-old daughter’s leukemia. Ms. Bates believes that Alumina is still dumping carcinogenic effluents into Lake Dira. The question for the executives of Alumina is if preventive measures could have avoided this problem. To find out if Alumina is the cause of Kelly Bates’ daughter illness because laws and regulations were not followed, it is best for Alumina to follow-up with some detective work. No matter what the outcome, the question is what can the company do in the future to avoid possible lawsuits' Not only must Alumina review its industrial processes, but it must also review its employee guidelines. To avoid any EPA problems in the future, Alumina must make sure that hydrocarbon levels fall below the limit of five milligrams per liter. To keep the carcinogenic effluents low, Alumina must use preventive measures such as studying EPA guidelines and regulations. To make sure that Alumina is following the strict guidelines set by the EPA, it must first review EPA laws such as the Clean Air Act (CAA), the Clean Water Act (CWA), and the Toxic Substances Control Act (TSCA). After reviewing the EPA laws that correspond to work done by Alumina, the company must review industrial business practices to make sure the company has the correct permits to discharge any pollutants into any navigable waters or into the air. If Alumina believes the company may be violating certain laws, it is in the company’s best interest to conduct an investigation or independent site study to review the company’s procedures. If Alumina reveals in a study that they are in violation of a law or regulation, the company should take immediate measures to correct the condition. For if at a later date it is discovered that the company knowing continued to operate the same after finding errors, Alumina may have to deal with punitive damages as well as fines for their lack of action. Because 70% of Alumina business originates in the United States and the company buys and sells products across state lines, they participate in interstate commerce. When a company participates in interstate commerce, they can be regulated by Congress on how the conduct business. When a company such as Alumina conducts business across state lines it must follow the laws set by congress such as avoiding federal civil rights violations. To protect the company from tort liability, the company needs to have an in-depth employee manual. The employee manual must be given to each employee to read as he or she is hired. The employee manual should contain a page for employee’s to sign verifying that he or she has read the manual and understand the contents. The form should be kept in the employee’s personnel file. The manual should contain the company’s guidelines and what will and will not be tolerated. It is very important that the employee manual contain information on what is expected of the employee by way of behavior, how to avoid discrimination, the attendance policy, company confidentiality, and safety to name a few. Alumina should offer diversity classes to employees. Diversity classes will help the company avoid discrimination law suits. The more information an employee receives from the employer, the less confusion there will be on both sides if a legal problem arises such as wrongful termination, discrimination, and harassment claims. If Alumina wishes to have disputes settled by arbitration instead of costly court cases, it needs to be listed in the employee manual. Arbitration is a faster and cheaper way to settle an issue. The costs and time associated with using an attorney and the court system may be astronomical. Alumina must try to avoid intentional torts. For example, employer and employees must take special care not to make untrue statements about other people or other companies or be liable for defamation. If the company is accused of causing damages to another person or business because of malice or negligence, it may cost the company large sums of money or even disdain in the public eye which may cause customers to go elsewhere to fill orders. Other torts Alumina must avoid are employer/employee disputes. Some examples of torts that can be avoided are using an employee’s likeness in advertising without expressed written consent of the employee. Alumina should also be careful in keeping detailed records when an employee is developing behavioral issues such as harassing another employee, theft, or poor work product etc. before terminating that employee so that if the former employee decides to file a lawsuit, the company will be prepared to defend it decision. Specific measures that may be used to avoid or manage regulatory risks or business torts are to hire employees who are experts in the field of business that Alumina is in. This is true for all types of business. For Alumina, it would be wise to employ someone who is well versed in environmental issues related to industrial waste. Many times, business tort issues are handled by the human resource department and the legal department. If the company is not big enough to house a legal department, the company should have legal council on retainer to represent their interests. In closing, a company such as Alumina must use preventive measures to avoid lawsuits. The best way to achieve success is to employ knowledgeable people who are experts in the industry and understand the rules and regulations that go along with it. Appendix Relevant Issues | Principles | Alumina was being accused of not regulating their waste levels causing a child to become terminally ill. | Conducting an independent site study | The local paper as well as the mother believed that years earlier, Alumina was dumping unsafe levels of chemicals in the water. | Allowing a partial release of the previous environmental audit report conducted by the EPA. | The Mother was considering suing Alumina. | Alumina seeking arbitration through AAA to resolve dispute. | The child is still ill. | Alumina setting up a trust fund for the child for a future education if she goes into remission as well as assisting the mother with medical bills. | References Jennings, M.M. (2006). Business: Its legal, ethical, and global environment. (7th ed.) Mason, OH: Thomson "Arbitration." Issues & Controversies On File: n. pag. Issues & Controversies. Facts On File News Services, 11 Sept. 2006. Web. 15 Feb. 2010. . United States Environmental Protection Agency. (n.d.) Laws and regulations. Retrieved from: http://www.epa.gov Hrywna, Mark. "FTC founder files wrongful termination suit." The Non-profit Times 23.23 (2009): 13+. Academic OneFile. Web. 16 Feb. 2010.