In a business context, there are thousands of legal claims that occur frequently in a company's course of operations. Often, the management team must come to together to determine if a lawsuit is warranted. Choose 1 of the following situations, and analyze the costs and benefits of the decision to bring or settle a lawsuit by the company. As a key member of the management team, you will need to lead the others to a conclusion through your research
Situation 1: The small printing company that you do business with recently declared bankruptcy. You paid your invoice of $150,000 for 500,000 color brochures, in full, before the printer sought bankruptcy protection. The problem is that only 365,000 brochures were delivered. The printer claimed the remaining brochures were in route. The shipment was supposed to arrive 3 weeks ago.
Situation 2: One dismissed employee claims that she was treated unfairly by being asking to work overtime with no pay. She was a salaried, exempt department manager. She claims that she was asked to travel to another location to help set up various events for a client and that she should have been paid overtime because it was outside her regular duties. She is seeking $18,000 in unpaid overtime.
Students should analyze 1 scenario and create an argument that studies the following factors regarding the lawsuit:
What is the probability of winning or losing the case? Why? How much money do you estimate the company will win or lose if the case goes to court? Estimate the lawyers' fees and other litigation costs. Estimate the amount of time lost by company personnel. List 2 factors that seem unique to this particular scenario. Consider the long-term effects of the reputation and relationship of your company with its constituents. Consider possible psychological costs associated with lawsuits.