Introduction to Law and Economics Assignment 2
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Introduction to Law and Economics
Assignment 2
The following writing assignment is due on July 15th, before 11:59 pm Saturday EST. You may reference course readings and module notes as part of your response, ensuring that you use
proper APA citation and referencing practices. For more information on APA style, please check
Responses will be checked using Turnitin to ensure originality of writing.
Assignment 2: Consider the following:
Sky Henrvl and Jon Henrvl (brothers) have been long term employees, supervising sex workers for All4U Inc. (a company earning $285,000 per year). The annual salary of the Henrvls is $62,000 per year each.
The Henrvls are aware that net profit from All4U Inc. and decided to earn as much as they can without the knowledge of All4U Inc. The sex workers supervised by the Henrvls are coerced into extending sexual favours to clients in excess of their agreement with the company and at times, contrary to criminal law. Sex workers who complied would maintain their employment due to the number of clients served. Not only has the Henrvls’ actions tarnished the reputation of All4U Inc., but it left the worker with low self-esteem. In addition, the Henrvls have also started their own company (Henrvls Inc.) and given their knowledge of the business, are expected to do well. Since starting the company, the Henrvls have been absent from All4U Inc. on a number of occasions without pay and this has contributed to the deteriorated service of All4U Inc.
Moreover, on May 20, 2023, two of All4U Inc. ’s sex workers recently became ill after providing the extended sexual favours and approached All4U Inc., who then informed the Henrvls and other supervisors. The encounter in question was arranged by Jon Henrvl. The Henrvls are aware that city management recently concluded an investigation of All4U Inc. because of allegations of extended sexual favours by employees. On May 1, 2023, the city cleared All4U Inc. of any wrongdoing. Nevertheless, the arrangement of the Henrvls continued because of the monetary implication and client satisfaction.
The Henrvls are expected to earn a total $150,000 per year from their operation and do not intend to work for All4U Inc. again.
Required:
Provide a word processing document in 12pt, Times New Roman font, double-spaced with 1” margins. Your response to the criteria below should be 3-5 pages in this format.
Response Criteria (items that must be included in your response):
Assuming all figures are net of taxes and given your knowledge of Law and Economics including the law of Tort:
1. Identify the legal issues of a civil nature affecting each party.
2 a. Given the legal issues you identified, advise each party how they should proceed legally and explain the results you expect.
2 b. Please consider the claims each party can make and the positions they can take as well as the opposing argument. Are your results equitable and efficient?
2 c. Include possible action by All4U Inc. against the Henrvls other than termination of employment.
2 d. Include a discussion of punitive damages and the effect they would have on efficiency.
2 e. Be sure to state any reasonable assumptions you make or any contingencies you include.
2 f. Discuss the possibility of a Coasean solution between the parties and compare it to a simple bargain between the parties.
Please note your grade will be based on substance, clarity, and cohesion.
2023-07-12