For your answers, I expect a full analysis with each response. For questions of law, you should identify the legal issue, explain the rule applicable, apply that rule based on the question asked and make your conclusion. For the ethics analysis, make sure you fully frame the ethical dilemma, identify stakeholders, explain options and your conclusion based on that analysis. The strategy/ societal questions should also explain all sides to the issue and your conclusion to the question, based on analysis of the different viewpoints. You may use outside sources, but must give attribution using APA format with in text citations and your end cites as well. I will be using Turnitin for originality analysis (including use of AI).

John Davos and his wife, Masie, started an online shopping website 20 years ago that has grown to be the largest online retailer in the world, Paragon. Paragon began its business by selling only clothing online, but now includes appliances, gifts and a variety of other retail goods. While business had been growing steadily, their sales grew by 250% during the COVID pandemic as brick and mortar retail stores remained closed due to government restrictions.

Before the Pandemic, Paragon sold exclusively from its own inventory. However, during the Pandemic Paragon saw an opportunity to allow third party retailers to sell on its site, charging a set fee per month and in addition taking a commission of each sale. While the fees and commissions are relatively high, the retailers have signed contracts with Paragon out of necessity with the Pandemic closures and restrictions. After the lifting of the restrictions, small businesses have noticed a strong trend of customers shopping online out of habit and convenience. Thus, these small businesses have continued to use Paragons website third party services.

Paragon is a corporation privately owned by John and Masie as sole shareholders. Both John and Masie are also directors of the corporation with three other directors they chose and elected for the board of directors. John is Chief Executive Officer and Masie is the Chief Operating Officer of Paragon. They have outside management for all other executive functions.

1. Paragon decides to sell a new product on its site, Magnetoballs, which are made by a company owned by Ernie Smith, John Davos college roommate and good friend. This company manufactures small magnetic balls that can be made into different sculptures and shapes. In making the decision, John ignores the advice of his legal counsel who warn that this product is under investigation by the Consumer Products Safety Commission and is likely to be recalled due to the small round balls being a choking hazard for children. In fact, after selling the product for a year, Paragon is sued by several customers injured by the product.

a. The lawyers for Paragon have warned that John and Masie Davos may be individually liable for these injuries as well. Please explain whether you think John and Masie will be liable and why, ensuing that you give full explanation of the legal basis for the suit against them and their defense to that suit. In your answer, please focus on their status in the corporation and not the substantive merits of the suit (ie not the product liability elements). (12 points)

b. What changes to corporate decision making would you recommend to Paragon to try and ensure ethical and legal decisions are made by the business? Make sure that you include a full analysis for all recommendations (13 points)

2. Paragon begins running advertisements on Social Media featuring its star small businesses and story lines with their success from using the Paragon website to sell their goods. These social media stories do not include that the majority of businesses using Paragon services have failed despite trying to sell on the Paragon website and do not include the fees and commissions charged by Paragon. Paragon also sent news releases to media outlets with a study showing that it had saved thousands of businesses from closure during and after the Pandemic. Many of the newspapers, television and radio outlets have also received substantial advertising revenues from Paragon in the last 5 years.

a. Using the FTC policy statement as a guide, are Paragons actions deceptive? (9 points)

b. Assuming that they are not legally deceptive, please provide an ethical analysis of this advertising campaign. (10 points)

c. What is the harm of allowing Paragons social media and press releases to continue? (6 points)

3. Paragons employee base has grown tremendously in a short period of time and John Davos is concerned about the cost of litigating employees claims against the business. 90% of Paragons employees are hourly, non-exempt employees who earn $20 per hour or less. John directs his legal department to require that all employees sign employment contracts. Further he includes the following provision in each contract:

All claims brought to dispute any aspect of employees employment at Paragon will be decided by arbitration that will be binding on each party. The arbitration will be conducted at Paragon headquarters in Wilkes-Barre, Pennsylvania. The single arbitrators will be chosen by consensus between the parties. If the parties are not able to come to consensus, chief legal counsel for Paragon will choose the arbitrator. Neither party will be entitled to legal counsel at the arbitration hearing.

All current and future employees are required to sign this contract without any opportunity to negotiate the terms. Paragon argues that all employees need to have the exact same terms for fairness and equality.

(a) Please evaluate the legality of these contracts and the specific arbitration clause. (13 points)

(b) Please provide an ethical analysis of Paragons strategy with regard to these employment contracts, including any specific suggestions you have for the contract process and the arbitration clause. (12 points)

4. The Federal Trade Commission (FTC) is a federal agency with broad substantive reach and with the power to make regulations related to the laws in its jurisdiction. In addition, FTC has the power to investigate infractions of those regulations and then adjudicate the infractions using FTC Administrative Law Judges. Dina Haan, a well-known legal academic, has just been appointed as one of the 5 Federal Trade Commissioners, who oversee the FTC. During her law school career, Dina wrote a scathing, well publicized article criticizing Paragon. One year after her appointment, FTC files civil charges of deception against Paragon based on what it calls excessive fees and commissions charged to small businesses making sales on its site. John Davos is furious about the action and seeks advice.

a. Please evaluate the legal arguments that Paragon can make in this case, including any that relate to the administrative power of the FTC. (12 points)

b. John Davos proposes contacting the President of the United States, who is a personal friend of his, to issue an Executive Order invalidating the FTC charges. Please evaluate whether that tactic will survive legal challenges, making sure that you clearly explain what the legal challenges will be. (13 points)