Legal and Regulatory Environment of Business Chapter 6 The Constitution The constitution contains many concepts that frame how the federal government operates and interacts with state and local governments Three of these are of great significance to the creation of a strong centralized federal government They are as follows 1 Separation of Powers The separation of powers between levels of government is known as federalism separation of federal and state local government This concept recognizes that each level of government has a separate and distinct role to play The tenth amendment reserves some powers to the states and to the people Congress may not impair the ability of state government to function in the federal system and state government may not limit the federal government s exercise of powers 2 Supremacy Clause Under this rule courts may be called upon to decide if a state law is invalid because it conflicts with a federal law A conflict exists if the state statute would prevent or interfere with the accomplishment and execution of the full purposes and objectives of congress 3 Contract Clause Under this clause states cannot enact laws that impact rights and duties under existing contracts No state shall pass any law impairing the obligation of contracts Amendments and Basic Protections The 1st Amendment Freedom of Religion Congress cannot make any law regarding the establishment of religion referred to as the establishment clause Also congress cannot make any law restricting the free exercise of any religion referred to as the free exercise clause These clauses guaranteed that there would be no restriction of religious freedom separation of church and state Business related freedom of religion cases typically involve the free exercise clause Ex Denial of unemployment benefits to a worker who refused a position because the job required him to work on Sundays Freedom of Speech Relates to government action that restricts us from expressing ourselves 1st amendment does not apply to action by private companies Covers actions considered symbolic speech freedom to express the unorthodox recognizing that there s no such thing as a false idea Does not protect fighting words or speech inciting hostile reactions Does not protect obscenity or offensive speech The overbreadth doctrine refers to a situation in which a person may refrain from expressing themselves due to fear of prosecution Ex Airport authority declared terminal area not open for first amendment activities This is unconstitutional under the overbreadth doctrine Commercial speech was not entirely protected until the 1970 s Supreme court ruled this is essential to the public s right to know therefore corporations are protected under the 1st amendment Corporations may add to public s knowledge and information Freedom of the Press Congress cannot make a law restricting freedom of the press Guarantees the right to provide organized scrutiny of the government Freedom of speech prohibits prior restraint on publications Press is still liable for prints that involve defamation or printed falsehoods The 2nd Amendment The 14th Amendment The Right to Possess Guns A well regulated militia being necessary to the security for a free state the right of the people to keep and bear arms shall not be infringed Majority opinion of the supreme court typically defines the 2nd amendment as the right to possess guns including handguns in one s own home to have them ready for use in self defense Language of the 2 nd amendment is typically under question as it doesn t answer whether guns can be carried in public places Equal Protection and Due Process of Law No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States nor shall any state deprive any person of life liberty or property without due process of law nor deny to any person within it s jurisdiction the equal protection of the laws Two provisions of this amendment are very important to business people Due Process Clause refers to fundamental principles of liberty and justice or fundamental fairness and decency Procedural due process refers to cases which involve whether proper notice has been given and a proper hearing has been conducted Equal Protection Clause refers to the ethical idea that the law should not treat people differently without a legitimate reason Approaches to challenging state and local laws under this clause are as follows o Minimum Rationality A law creating different classifications will survive an equal protection challenge if it has a rational connection to a permissible state end Permissible state end means that it is not prohibited by another provision of the constitution it qualifies as a goal of government o Strict Scrutiny A classification will be a denial of equal protection unless the classification is necessary to achieve a compelling state purpose it must be a compelling state objective o Quasi Strict Scrutiny These cases are in between minimum rationality and strict scrutiny This occurs when the classifications are only partially suspect or the rights involved are not quite fundamental Ex Classifications based on gender are partially suspect Classifications are unconstitutional unless they are substantially related to an important government objective This version has resulted in holdings that find laws to be valid as well as unconstitutional Chapter 13 Criminal Law and Business White Collar Crime Applies to criminals of high socioeconomic status such as corporate executives who commit fraud Classifications of Criminal Conduct Misdemeanors Punishable by a fine or jail sentence of less than one year Information Misdemeanor cases are commenced when the government files a charge called an information Felonies Punishable by fine or imprisonment in a penitentiary for a period of one year or more Indictment Felony cases are commenced by a grand jury indictment Basic Concepts of Criminal Law Criminal intent is often defined by two terms Willfully refers to an act that is committed voluntarily and purposefully with the intent to do something a person is not acting willfully if there is a good faith misunderstanding of the requirements of the law Knowingly refers to an act that is done voluntary and intentionally not because of mistake or accident knowledge can be inferred if the person is blatantly ignoring the existence of a fact Nolo Contendere No Contest The third plea a defendant can enter the
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