Homework Help

Your company just developed a chemical for sterilizing killer bees which are a...

user profile pic

barbiedot | Student, Undergraduate | (Level 1) Valedictorian

Posted March 27, 2013 at 2:24 AM via web

dislike 1 like

Your company just developed a chemical for sterilizing killer bees which are a nuisance. However U.S laws and regulations are strict regarding this sort of practice due to lack of testing and the potential side effects. In order to reduce corporate risk and exposure from the use of the new potentially hazardous chemical, the company president suggests establishing a separate wholly owned company. The new dummy corporation will take ownership of the patent covering for the chemical, to shield the primary organization from liability in the event of future harm.

What would you do if you were working for this corporation and the president of the company told you to implement the plan of setting up the dummy corporation?

1 Answer | Add Yours

user profile pic

farouk23 | College Teacher | (Level 1) Associate Educator

Posted September 18, 2013 at 11:46 PM (Answer #1)

dislike 0 like

It should first be noted that the patent being owned by a separate company may not necessarily shield the primary organization from liability, if it can be determined that the dummy corporation is a wholly owned entity of the primary organization.

In general the entire situation represents an ethical dilemma for the employee, while the actions of the president are not necessarily illegal they are however unethical. If the chemical is later determined to have caused environmental damage or harmed public health, the company could face both financial and criminal liabilities. The most sensible course of action for the employee would be to advice against the president’s course of action. Should that prove futile, the employee in order to remain ethical and within the bounds of the law should resign and report the situation to the relevant government agency. 

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes