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Case Study: Ethical and Legal Violations at Overseas Facility

Big Aircraft Company (BAC) is a publicly traded U.S. corporation with more than 500 overseas production facilities. Jeff Bland, an audit manager with BAC, was offered a two-year assignment in one of the factories in the Islamic country of Idzatu. Francine Boyd, a senior audit manager, bid for the position but was denied the job. Initially, BAC explained that cultural issues were involved in the denial. After additional meetings, BAC stated that she was not eligible based on her age, religion, and sex. The country of Idzatu permits discrimination based on age, religion, and sex and practices intentional discrimination based on religion. In Idzatu, women are assigned to low-level jobs and are not permitted to occupy management level positions. In addition, Idzatu laws prohibit women over the age of 45 from working.

After several months in Idzatu, Jeff initiates the annual audit required by the corporate internal audit procedures. During the course of the audit, Jeff discovers a variety of inconsistencies and questionable business practices. His report indicates the following issues.
1.The BAC Idzatu facility only employs men in management and supervisory positions. Very few women work in the plant and those that do occupy lower level positions.

2.An inspection of a BAC subcontractor's facility in Idzatu revealed children ages 8-12 working over 60 hours a week in violation of Idzatu labor laws.

3.Employees in the subcontractor's facility were exposed to toxic chemicals and loud noises without protective clothing and headgear.

Jeff files this report with his boss in the U.S. and is warned by his boss to keep his mouth shut. Jeff has two children under the age of 10, and he is appalled by the working conditions and the lack of action by BAC. Six months pass, and no changes have been implemented in either facility. Jeff is told to mind his own business because different countries have different laws and the ability to manufacture aircraft parts at a lower cost is why BAC maintains a facility in Idzatu. Jeff is outraged and reports these conditions to the U.S. Department of Labor and the ILO. Two months after filing these reports, Jeff is fired.

Based on the information provided in the case scenario, answer the following questions:
- Evaluate the legal issues that Francine Boyd may bring against BAC and any arguments that BAC may use to refute Boyd's claims.

- In your view, is Jeff protected by any of the whistleblower statutes? Provide legal arguments that support your position.

- In your opinion, what are the legal, ethical, and cultural issues of Jeff's findings?

Solution Preview

- Evaluate the legal issues that Francine Boyd may bring against BAC and any arguments that BAC may use to refute Boyd's claims.

Francine Boyd may use the provisions of VII of the Civil Rights Act of 1964 that prohibits discrimination on the basis of gender. The main argument that BAC can use to protect itself against the allegations of Francine is the fact that the Idzatu's local laws and regulations will be violated due to Francine's selection for the expat assignment and thus, the organization cannot be held responsible for violation of US law.

Reference: http://www.velaw.com/uploadedFiles/VEsite/Resources/BestPracticesTransferringUSEmployeesOverseas.pdf

- In your view, is Jeff protected by any of the ...

Solution Summary

Discusses case questions related to violation of laws and ethical standards at overseas facility of a US based corporation. 462 words + references.

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