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Case Scenario: Legal and Ethical Considerations


Congratulations! You have just been hired by Diversified Worldwide Industries (DWI), Inc., as the Vice President of Risk Management. DWI is headquartered in West Palm Beach, Florida, and has over 150 offices in 30 countries. DWI is incorporated in the State of Delaware; its ships are flagged by Liberia and the Bahamas.

The Corporation's principal activities are grouped into the following areas:
? ENVIRONMENT: Water and water treatment, waste management;
? OIL & ENERGY: Exploration, production, transport, refining, wholesale marketing, alternative fuels research;
? COMMUNICATIONS: Telecommunications, Internet, audiovisual activities, publishing and multimedia;
? LEISURE & RECREATION: Hotels, casinos, cruise ships;
? REAL ESTATE: Builds homes and manages properties in active adult, age-restricted communities;
? FINANCIAL: Brokerage for capital market investments in Russia, Eastern Europe, China, and emerging markets;
? MANUFACTURING: Produces, distributes, markets, exports and imports spirits and wines.

Your duties as the VP for Risk Management will require that you develop knowledge and expertise in all areas of business law, consult with corporate and outside counsel on legal matters, and advise the board as to available options to reduce or minimize the risk and liability of DWI in its ongoing activities.

Task Type: Discussion Board Deliverable Length: 3-4 paragraphs
Points Possible: 75 Due Date: 5/30/2005

Read the landmark cases of Heart of Atlanta Hotel v. U.S. ( Katzenbach v. McClung(, which upheld the Civil Rights Act of 1964, as being a constitutional exercise of Congressional power under the Commerce Clause of the U.S. Constitution. The leisure group of DWI owns and operates several hotels and casinos, one of which is "The Queen of The Nile" casino, on the Mississippi River waterfront in New Orleans. This Egyptian themed hotel and casino is quite popular with Arab-Americans and visitors who are citizens of nations in the Middle East and Northern Africa.

Recent events in the Middle East have led to an increase in anti-Arab sentiment, and several fringe groups have actually resorted to violence against persons who appear or are believed to be of Middle Eastern decent and damage to properties they own or frequent. In recent weeks, DWI and the hotel have received threats against the property and its guests via mail, phone, and e-mail. In response, DWI has circulated a memo to employees advising them of the threats and has increased security patrols on the premises. Last night, one or more snipers shot at arriving and departing guests who appeared to be of Middle Eastern descent; two guests and one employee were injured and there was damage to several doors and windows near the hotel entrance.

Additional threats against the hotel have been received, threatening bombings and additional violence unless DWI stops allowing persons believed to be Arab-Americans or others of Middle Eastern descent to stay at or visit the hotel property; several employees have claimed to be sick and have failed to appear at work this morning; Arab-American groups and others are threatening a boycott of DWI products and services worldwide if the company acquiesces to the blackmail.
Discuss the legal and ethical considerations raised by this situation and make a recommendation to the Board as to what actions DWI should take.

Solution Preview

Please see response attached, which is also presented below. Good luck with your studies and take care.


Please read the two articles suggested first.

First, I went through the Scenario highlighting in red what seemed important (see attached response). I also added sections from the two cases that fit with this scenario. Then I listed legal and ethical issues and related recommendations.

Now let's look at the question:

Question: Discuss the legal and ethical considerations raised by this situation and make a recommendation to the Board as to what actions DWI should take. Let's go through some of the legal and ethical issues and suggested recommendations that you can then use to formulate the 2 or 3 paragraphs for your discussion board.

Legal Issues:

a. Racial Discrimination (i.e., Arab-American): Section 201 (a) of Title II commands that all persons shall be entitled to the full and equal enjoyment of the goods and services of any place of public accommodation without discrimination or segregation on the ground of race, color, religion, or national origin; and 201 (b) defines establishments as places of public accommodation if their operations affect commerce or segregation by them is supported by state action. Sections 201 (b) (2) and (c) place any ...

Solution Summary

This solution explains the potential legal and ethical considerations raised in the case scenario and makes recommendations to the Board as to what actions DWI should take.