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Legal Issues In The Workplace Simulation Report

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Employment Disputes

Each year, companies are faced with employment disputes resulting from the termination of employment to disparate treatment of employee rights. This paper will focus on the Resolving Employment Dispute simulation addressed in week 3. The paper will analyze the simulation and identify and discuss key legal decisions that were made during the situation. Internal and external elements and pressures that led up to the issues and the decision making process of the company will be discussed. The paper will address what elements of the Alternative Dispute Resolution (ADR) process and which solutions were administered during the simulation. Lastly, this paper will discuss what an organization can learn from the simulation experience on ADR.

Key Legal Issues

BioRemedia Pharmaceuticals is on the verge of inventing a drug that will help control cardiac disorders. The company has hired Rowen Thomas to be the Chief Research Associate for Project Bromediac. Mr. Thomas comes to the company as one of the leading specialists in the research field of cardiac disorders. His credentials are impeccable. It has been determined that confidential information in regards to Project Bromediac has leaked to BioRemdia's rival, Steinmetz. Management has determined that the breach had to have come from Rowen Thomas because he was the only person privy to such information. Mr. Thomas was terminated from employment based on the breach of confidentiality (UOP Resolving Employment Dispute Simulation, run July 17, 2006).

What to do about the situation and how the company handles the breach has important legal issues involved. Did Rowen Thomas commit intellectual property theft? If so, should the company file charges against the discharged employee? Because the company terminated the employee would he have a case for wrongful discharge? Could Mr. Thomas file a defamation of character lawsuit against the company? Was the leak a breach of confidentiality by Mr. Thomas? All of these questions have serious legal ramifications attached to them. The company decided to tackle the issue of intellectual property theft by Rowen Thomas along with the allegation of breach of confidentiality. Due to the company terminating the employee's employment, it was also forced to deal with the legal issue of wrongful termination.

Under the Employment At-Will Doctrine, "subject to common law and constitutional limitations, either an employee or employer can terminate their employment at any time" (Connely & Kleiner, 2005). Both the breach of confidentiality and the intellectual property theft would fall under the Employment At-Will Doctrine. According to Connely and Kleiner, under the California Labor Code section 2922, public policy and contractual claims can sometimes apply to the at-will employment doctrine if a termination is not handled well as was the case of Mr. Thomas.

By 2000, American companies lost over $1 trillion from intellectual property theft and that number continues to grow (Smith, Ly & Schmiedel, 2006). According to the Institute for Applied Management & Law, Inc. (pp. 183), lost property involves the employer losing its investment and the exclusive use of their proprietary information when an employee discloses or misappropriates proprietary information during or after his employment.

BioRemedia believes that Bromediac is considered a trade secret and is protected under the Economic Espionage Act of 1966. This act "protects all forms and types of financial business, scientific, technical, economic or engineering informationÐ'...whether tangible or intangible and whether, or no matter how, stored, compiled or memorialized physically, electronically, graphically, photographically or in writing" (Smith, Ly, & Schmiedel, 2006). In BioRemedia's eyes, the new drug is a trade secret because it meets the two requirements needed. The first requirement is that the owner of the property must take reasonable measures to keep the property secure (Smith, Ly, & Schmiedel, 2006). BioRemedia believed that they did so by only allowing Rowen Thomas access to the confidential information. The second requirement is that the information must derive an independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by the public (Smith, Ly, & Schmiedel, 2006). BioRemedia also believes that it meets this requirement because by patenting this new drug would lead to huge financial gain for the company and ensure it a place as an industry leader in cardiac medication.

Looking at the decision that BioRemedia has made in regards to terminating the employment of Rowen Thomas, I believe that they made a hasty decision with no actual proof. Because of this, Mr. Thomas has issued a letter of intent to start a wrongful termination suit. I believe that the initial decision to hold a neutral investigation of the intellectual property theft was a good decision on the company's part. However, this should have been conducted prior to the termination of the employee. If a neutral investigation was held first, the information gained would have saved the company time and money because they would not have had to terminate the lead researcher on a very important project.

Internal and External Elements and Pressures

There were many internal and external elements and pressures that impacted the decision making process. BioRemedia realized that losing Project Bromediac would be very costly to the company. The management had to do whatever possible to try to save the project from the competitor and from total loss.

BioRemedia also knew that losing Rowen Thomas would be costly to the project. His knowledge of the project was essential to the success and completion of the new drug. The management had to worry about the consequences of their actions for terminating the employment relationship based on suspicion and not factual evidence. Terminating employment had a negative affect on the project. Finding out how the breach of confidentiality occurred was a major internal pressure that had the management acting before thinking through all of the consequences. The company was worried about the loss of the project, the failure to secure

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