Legal And Ethical Scenarios

Scenario 1 – Business Organizations

Bailey Andrews and Danita Brown met while working at Starbucks and attending college in Georgia.  Bailey studied business at South University, while Dania attended the Art Institute for culinary management. The two friends were tired of working for someone else and opened a new coffee shop as a partnership after college.   Now that the business has grown, the two partners are considering a new legal form for their business.

  •  Analyze three types of business organizations Andrews and Brown might consider for their existing restaurant. Be sure to consider at least one limited liability option. Explain the advantages and disadvantages of each type. 
  • Select one type of business for Andrews and Brown and provide support for your choice.


  Scenario 2 – Employment Discrimination

Born in 1975, Juanita Mendoza immigrated from Mexico in 2005 and became a U.S. citizen in 2010. Mendoza speaks fluent English with a strong Hispanic accent. Her accent does not interfere with her ability to communicate with others. Mendoza worked as a cook and waitress for 20 years. Although she did not have any formal management experience, Mendoza applied for a shift manager’s job with X restaurant; however, she was not hired for the position. The restaurant currently employs 5 full time employees and 14 part time employees.

  • Analyze the possible grounds Mendoza might have for a discrimination lawsuit against X restaurant.
  • Provide support for each ground selected and then provide arguments that X  restaurant could make to counter each claim.
  • Explain how your answer might change if the restaurant only employs a total of 12 people.


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  Scenario 4 – Insurance and Agency

Dylan is a delivery driver for X restaurant. While delivering orders within the scope of employment, Dylan rear-ended a car driven by Vickie Talley. Dylan was insured by State Farm and his policy contained the following information.

 Exclusions—What is not Covered

State Farm will not pay for any damages an insured person is legally obligated to pay because of:

Bodily injury or property damage arising out of the use of your insured auto while used to carry persons or property for a charge, or any auto you are driving while available for hire by the public.

  • Analyze the liability on the part of Dylan, Vickie, State Farm and X restaurant. Be sure to cover issues related to both insurance and agency.

Scenario 5 – Consumer Protection

X restaurant does not publish the prices of drinks on the menus. Nik Carlson, a customer of the restaurant filed a lawsuit claiming that failure to provide drink prices on the menu constitutes an unfair business practice because customers must make quick decisions about ordering drinks after asking about the price. Another plaintiff, Joe Swanson, claimed that he was not provided with a cost for his drink until after he ordered it, which constitutes consumer fraud.

  • Analyze the applicability of state and/or federal consumer protection laws that Carlson and Swanson can assert against X restaurant. Select which party should win and support your answer.


Conclude your paper by justifying suggestions for X restaurant to help prevent future occurrences of these types of legal problems.  Identify any ethical issues you find and present recommendations as  applicable. Be specific in your recommendations.

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