Case One: Green Machine, Inc. Green Machine, Inc., a company devoted to producing eco-friendly household products, is a wholly owned subsidiary of Colossal Corporation. Green Machine’s most famous and best-selling product is the Eco-Widget—a handheld, solar-powered device that recharges a variety of electronics on the go, including cell phones, laptops, and tablets. Colossal Corporation has uncovered an incident of theft at Green Machine: Approximately one month ago, over 400 Eco-Widgets were stolen from Green Machine’s Adelphi, Maryland warehouse. Shortly after the theft was discovered, Colossal Corporation’s internal investigator, Ivan, found an online advertisement for the sale of exactly 400 Eco-Widgets. Ivan called the contact on the website and set up a meeting with the seller, Greg Smith. When Ivan, under the guise of being an interested purchaser of the widgets, inquired about Greg’s distributor, Greg did not hesitate to reveal that he purchased the widgets from Rachel Jones, his long-time business associate. Ivan inspected the 400 Eco-Widgets, and confirmed they were indeed the same products that were stolen from the warehouse. He then requested a price quote from Greg and asked Greg to hold the products for him for seven days. Greg agreed. Ivan arranged a meeting with Rachel the very next day, during which he pretended that he wanted to buy electronics from her. He asked Rachel if she had any Eco-Widget distributors she could recommend. Rachel said that she works directly with a Green Machine sales agent named Sam Simpson, and that she recently purchased 400 Eco-Widgets from him at a discounted price. Rachel also said that Sam is quite interested in expanding his business with her, and would provide Ivan with a great deal. After his meeting with Rachel, Ivan checked the personnel records at Green Machine and identified Sam Simpson as a low-level warehouse employee who has been with the company for over 10 years. Sam’s personnel record is spotless, with no prior personnel issues and no complaints. Sam is in charge of night security at the warehouse, and has no history in sales. As a night security guard, Sam is responsible for protecting the warehouse from theft, and is not permitted to sell products. After further investigation, Ivan found company e-mails between Rachel and Sam in which Sam posed as a sales agent. Reading the e-mails, it became obvious that neither Rachel nor Greg knew that the 400 Eco-Widgets were stolen. Ivan then collected video from all of Sam’s shifts and was able to locate a film of Sam packing the Eco-Widgets into his personal car and driving them out of the warehouse parking lot. Your task is to research the legal issues surrounding the stolen property. It is up to you to decipher which laws have been broken, and what the potential remedies are.
1. Can Colossal Corporation terminate Sam without any notice or a hearing? Why or why not? This question relates to employment-at-will.
2. Did Sam, Rachel, or Greg commit any crimes and, if so, which crimes did each person commit? Fully explain your answer for each person as you explore the subject of business criminal law.
3. Did Sam, Rachel, or Greg commit any torts and, if so, which torts did each person commit? Read about the law of torts in order to make your determinations.
4. What defenses, if any, might the relevant persons allege in defense to the torts and crimes identified in questions 2 and 3? Fully explain your answer for each person as to both torts and crimes.
5. Can anyone collect damages? Who can collect and whom would they sue? Detail the specific damages that may be available to potential plaintiffs as you read about tort damages.