TORTS Case Study: SSENTIAL (40 marks)

Jerome and Jennifer, two resourceful Seneca graduates, decided to turn the COVID-19 pandemic into a business opportunity. They realized the advantage of having an essential business operation that withstands pandemic-related economic fluctuations. They decided to rent a large industrial unit and fit it out as an open concept store selling essential items, including groceries, non-perishable and shelf-stable bulk food items, frozen foods, storage containers, home DIY items, and crafting goods and toys. They hired just enough staff to operate the shop and also set up an online ordering system. Customers create an online account, go "shopping" on the SSENTIAL website. SSENTIAL employees then prepare the orders for pickup as soon as customers make payment online. Customers then pick up paid for items on the curb-side. However, because SSENTIAL sells essential products in the shop, in-store shopping is still allowed even during government ordered lockdowns, allowing them to be insulated from the closures on commercial operations.

a. Jerome and Jennifer were pleasantly surprised by the quick popularity of their new store. Many customers, commenting on the clean black and white aesthetic of the shop and brand, ask whether or not SSENTIAL is owned by the luxury online retailer, SSENSE. Jerome and Jennifer always answer, honestly, that the companies are not linked to one another. Still, they enjoy the idea that the shop feels like a familiar and trustworthy brand.

b. Although business is booming fast, the high start-up costs of purchasing lots of inventory and hiring all the in-store staff means that money for online operations is limited. To handle the website purchasing system, they hire Jennifer's cousin Ibrahim (at a discount) rather than an IT e-commerce firm. Ibrahim takes the information from customer purchases and billings and processes it on his own personal platform. He then sends the money and order details to SSENTIAL staff members who get the items ready for pick up. Jennifer trusts Ibrahim, who has sworn to her that he won't allow any fraud to happen on his watch, but Jerome is mostly nervous about privacy issues for customers who input their information into a system that only Jerome has access to. He hears that Jerome may have sold some customer information to a third party marketing campaign in exchange for a lofty sum. Without being able to confirm this information, Jerome decides not to say anything about it to Jennifer because he doesn't want to get in the way of her family relationships.

c. Despite the legally prescribed limit on the number of shoppers allowed in a store at one time, Jerome feels bad about the long lines of people waiting to enter, especially during very cold temperatures. Whenever the temperature gets colder than -10oC, he lets everyone over the age of 60 or with minor children, to enter the store without waiting. Sometimes this means a much busier store than what is permitted by law but he figures it does not matter because his intention is to keep people healthy, not to make them vulnerable to community exposure. Two days after he exceeds the maximum number of people permitted in the shop, he is notified by Public Health that six of the customers present at the time later tested positive with the highly contagious UK strain of the virus.

d. After this, Jennifer and Jerome decide it is necessary to sterilize the shop floor and any shelf products that may have been contaminated by the virus. They want to make sure the store is up to safety standards and also help assure customers that the virus threat is no longer present in the shop. They ask their staff to do a one-time cleanup while customers are present in the store (to witness the great cleaning gesture) but none of the staff are given protective clothing and masks. Three out of four of those staff members experience symptoms as soon as they get home, and within 72 hours, all three test positive for COVID as well.

e. The following week, two customers get into a fight while waiting to enter the store. Sandeep had been waiting his turn in line when River cut into the line ahead of Sandeep. Sandeep said to River that she should take her place at the end of the line, but she refused and stayed where she was, laughing and mimicking his gestures. Sandeep loses his temper, swears at River numerous times, and says "look here you clich Karen... if you don't get out of this line I will slap you out of it". River turns quickly around and punches Sandeep in the nose, which causes him to fall backward, bang his head on the concrete and suffer a mild concussion.

f. Some toys sold are not made available instore and can only be collected curbside after online purchase. One toy in particular, a vintage replica Transformer (for ages 10+), is received from the distributor in its original packaging and stored outside the shop in the small shipping container in which it arrived. SSENTIAL staff collects the toy from the crate and hands it directly to online customers at the curbside pickup spot. As it turns out, these Transformers have a sharp piece of metal sticking out, likely owing to faulty manufacturing. One father purchases the toy for his 5 year old daughter, Emma, and ends up taking her to the hospital emergency room for injuries she sustains while playing with the toy. Emma receives 10 stiches on each hand and now cries hysterically every time she sees a robot or Transformer toy.

g. Due to increased demand, SSENSTIAL decides to hire more staff. Most of their existing staff has experience in dollar stores and grocery chains but they now realize their business is more of a Costco-type operation than anything else. As a result, they decide to hire four new staff members but want only people who have recent and relevant work experience at Costco. Rather than put out ads and wait to see who applies, they decide to approach existing Costco workers and offer them generous packages to quit Costco and join the SSENTIAL team instead. Two Costco employees, a high level manager and a store room inventory expert, quit and walk out of Costco the same day they are approached by Jerome and Jennifer.

Instructions: You are to prepare a report for SSENTIAL as follows:

Part 1:

1. Select, list and explain three (3) different potential risks (i.e., tort actions).

2. Identify and explain one (1) instance of vicarious liability.

3. Identify and Explain one (1) instance of contributory negligence.

Part 2:

4. List and explain five (5) recommendations on how to mitigate legal risks by presenting a risk management plan. Be sure to use sub-headings in your plan.