Essay on SU MBA5005 W1 A4 Lowden J

Words: 986
Pages: 4

Dracca, Inc.
Julie A. Lowden
South University Savannah

Dracca Inc. is a publically traded corporation that manufactures baby items. Though based in the United States, Dracca has manufacturing facilities in other countries. Dracca employs approximately nine hundred employees in total. While the company operates out of Saint Louis Missouri, many of the company’s clientele are Spanish speaking. This in itself has the potential to cause problems for Dracca.
Arbitration
Dracca Inc., like many other businesses, has a standard contract that they use when selling directly to customers. This contract is written in English, since the company operates out of the United States. The problem with this contract is that it has not been translated into any other language. Since the company has a large number of clients that speak Spanish, the company would benefit greatly from having the contract translated into Spanish. This simply act could reduce the amount of disagreements and contract disputes in the future. Dracca’s contract includes a binding arbitration clause. This clause allows the company to use a person of its choosing when dealing with arbitration. According to attorney Rich Stim “arbitration is an out-of-court proceeding in which a neutral third party called an arbitrator hears evidence and then makes a binding decision.” (Stim, 2014) This type of dispute resolution is great for Dracca, but for the clients that do not speak English, this clause is a major issue and concern. Historically, the Supreme Court has sided with businesses on the issue of binding arbitration clauses (Oort, 2010). The issue in this case, however, is whether or not a customer can be held to a binding arbitration clause in a contract that they did not understand to begin with. The customers can argue that due to the language barrier that they lacked the capacity to understand the contract and thus the contract should be voidable. For the most part however, the only acceptable limitations to entering into a binding contract are legal minors and the mentally ill (Stim, Who Lacks the Capacity to Contract?, 2014).
Ethical Issues Dracca faces many ethical issues moving forward. One of the biggest issues is whether or not their current contract should be rewritten, or at the very least translated into Spanish so that it is a more inclusive contract. While this alone will not resolve the current conflict, it can at the very least prevent future conflicts and can possibly save the corporation money. The current issue, however, should be decided by an impartial arbitrator. Perhaps instead of the arbitrator that Dracca has always used, they employ an impartial arbiter to resolve the current issues. This new arbitrator should be able to look at the issues impartially and make a decision based strictly on the facts of the case. Just as the language of the contract should be reconsidered; so too should the spoken languages of the arbitrator, and perhaps the corporate representative. If the arbitrator is incapable of understanding the party bringing forth the issues then the arbitration is due to fail. All parties should be able to communicate effectively and openly during the arbitration process. Without the ability to communicate, there is no hope of an impartial ruling.
Hennings and Ramifications Sue Hennings, a disgruntled employee tampered with products manufactured and sold by Dracca Inc. Though Hennings is an accountant for the company, she had hopes of a promotion. When Hennings was passed over for the job, Hennings took it upon herself to tamper with the safety clasps on the pack and play unit manufactured and sold by Dracca. This action resulted in harm to multiple infants. While Hennings can be charged with criminal negligence in a criminal court, vicarious liability stipulates that Dracca Inc. can be held liable for Hennings actions. While Dracca did not tell Hennings to take the actions that she did, she was employed by the