Reference no: EM13789037

Dracca sold much of its feeding equipment line to a  retailer known as Baby Boutique (BB). BB was a partnership formed between  friends Beth Brown, Silvia Gray, and Valerie White. BB was behind on its  payments and owed Dracca over $500,000 for delivered feeding equipment. Eventually,  Dracca sued BB and obtained a judgment for $500,000 in Dracca's favor.

The board of directors for Dracca decided to seek  enforcement of the judgment against Silvia Gray, acting on a tip that Ms. Gray  had just inherited a large sum of money and that the other partners had no  personal assets. As it turned out, Ms. Gray had sufficiently dispersed her  inheritance money and did not have the funds to pay the judgment. Dracca  incurred substantial attorney fees in attempting to collect its judgment from  BB.

The accounting manager overseeing the BB account had been  with Dracca for 20 years. His name was Martin Long, and he started with the  company as a part-time bookkeeper. Long received numerous positive job  evaluations over the first 15 years with the company, and he was promoted  several times until he reached his current position of accounting manager five  years ago. Long and his  life partner, Will Short, receive medical, dental, and life insurance benefits  as part of Long's employment package with Dracca.

Long reported to the Director of Accounting, Mary Smith, who recently came onboard to Dracca from another company.  Smith took away a good portion of Long's responsibility and froze his pay.  She was heard to say, "This company does not need to be burdened with paying for same-sex marriages."  She posted Bible verses in the breakroom and had a screensaver that read, "Marriage is between a Man and a Woman."   Long quit under the new working conditions.

One of Long's subordinates, Kate Katz, reported  Long's treatment to the EEOC.  Kate was an  at-will employee who had been withDracca six years.  In response to the EEOC report, Dracca fired  Kate.

The sales department was charged with hiring new  salespeople for its feeding equipment line to generate more retail and end-user  customers.  May Hernandez was the lead  salesperson for the line, and was responsible for making the final hiring decisions.  May interviewed thirty candidates for six  positions, and hired only women with children, stating that women, as mothers,  made better salespeople for the line.   After this hiring session, Dracca noticed a significant decrease in male  applicants.

In light of these facts, please respond to the following  questions using course material and credible outside research to support your  findings.

• Can Dracca seek to recover from Silvia Gray  individually on the judgment for BB partnership? Why or why not? Use legal  principles from the readings to support your findings.
• Using the Business Judgment Rule, did the board  of directors fulfill its duty of care to shareholders in suing Silvia Gray  individually for the BB judgment? Why or why not?
• Can Long sue Dracca for employment  discrimination? Can Long argue constructive discharge in this instance? Use  legal principles and case law from the readings to support your conclusions.
• Can Dracca fire Kate?  Why or why not?  Will the court consider any claims of  retaliation in this instance?
• What are the legal and ethical ramifications for  Dracca from Hernandez's action in hiring only women?  Can it be argued that being a woman with  children is a bfoq for the position?  Why  or why not?
• What actions (internal and external) do you  recommend to Dracca to remedy the ethical and legal considerations of this  scenario? Be specific and detailed, and be sure to base recommendations on  relevant legal and ethical principles.