Your law firm has been recently been retained by Emory Holdings, Inc. ("Emory"), a manufacturing conglomerate that is incorporated in the state of Delaware but has its principal place of business in Columbus, Ohio. As part of your recent work, you helped Emory acquire Jackson & Carter LLC ("J&C"). J&C is a Georgia limited liability company with its principal place of business in Atlanta, GA. J&C manufactures kegs that are sold to craft breweries around the state of Georgia as well as around the country.

Today, you received this email from the regional vice president of Emory who oversees operations and performance of J&C, among other manufacturing companies across the southeast states:

Good afternoon!My name is Micole Krebs, and I am the RVP for Emory's Southeast

Region. I am writing you for advice regarding some situations of concern at Jackson &

Carter, a company we recently acquired. While getting up to speed on their operations, I had several conversations with J&C management and employees that raised some red flags, in my opinion. I remember taking a Legal Environment of Business course in my undergraduate studies, and that has helped me spot some of these issues of concern. I am forwarding these pieces of information to you for confirmation as well as for advice on how to handle.

J&C has a long-standing relationship with Remy Rose, a salesperson who has sold kegs for the company for most of the decade. J&C has never employed a full-time salesperson, so Remy works under a rolling agreement where she is independently contracted to sell J&C kegs for 12-month periods. Each July 1, unless either side objects, the contract is automatically renewed for another 12 months. As part of this agreement, Remy works exclusively for J&C; she does not sell anything for any other company. J&C provides her with a standing office at J&C headquarters. The company also provides her with Microsoft Surface Pro tablet, a Samsung Galaxy cell phone, office supplies, and administrative support to complete her work. J&C also provides her with a list of potential customers for which she is required to make sales calls. She is given a $35,000 each contract period as compensation. She also receives a $10,000 stipend for necessary expenses associated with travel. Further, she makes 15% commission on all her sales. All compensation is provided to Remy through digital transfer into her personal bank account.

For the past two years, Remy has had great success selling J&C kegs. Her performance reviews have been outstanding. She attends many company events and is seen as "a valuable part of the J&C team," according to the company present. Likewise, many of her clients have commented positively about Remy's professionalism and consistency in following up on customer satisfaction.

This past Monday, November 18, Remy decided to enter the main offices through the manufacturing entrance instead of the main doors at the front of the building. While walking through the plant, she noticed a new keg model, the BW-316, that intrigued the natural salesperson in her. Apparently, the BW-316 is a prototype that keeps beer colder for up to a week longer than standard keg models. Unfortunately, she accidentally knocked the keg off its shelf, and the keg rolled into one of the research and development employees, Christopher. Christopher is currently on bed rest after being diagnosed at the hospital with a fractured fibula.

A separate issue involves an administrative assistant named Danny. Danny has been working as an employee at J&C for a few months, but he has ambitions to work in sales one day. He would love to sell kegs for J&C, but obviously the company's relationship with Remy does not allow for that opportunity at this time. The major issue with this situation is that Danny has complained to Lana, the human resources director, about Remy's habit of walking on the manufacturing floor without the proper safety equipment - a clear violation the company's policies and procedures. However, Lana did not act on Danny's tip because she does not think of him as a credible employee; in fact, she thinks Danny forwarded the information because he appears to be jealous that a woman has a job he desires. Lana informed me that Danny was fired this morning for "poor overall performance."

Last week, Mr. McIntosh, the president of J&C, forwarded me two letters received by certified mail. The first letter was from the Wyatt Corporation - J&C's primary competitor in the keg manufacturing market. The letter was signed by Wyatt's general counsel, demanding that J&C cease-and-desist from producing and selling the BW-316. It sounds like some of Wyatt's employees saw a blueprint of the BW-316 on a Craft Beer sub-Reddit website. Mr. McIntosh believes that the blueprint for the BW-316 was downloaded by one of his employees without authorization and then posted online. The Wyatt employee notified the general counsel about the blueprints; the letter claims that the BW-316 blueprints are the exact same blueprints of Wyatt's DD-219 prototype. According to the letter, the DD-219 is patent pending. Wyatt demands that any and all proceeds from sales of the BW-316 be remitted back to Wyatt. Mr. McIntosh ensures me that he has fired everyone he thinks was involved in the snafu.

The second letter was from Peachtree Brewing - the fastest growing independent craft beer company in the state of Georgia. Peachtree Brewing claims that J&C, through its sales representative, promised a shipment of fifty kegs to be delivered and installed at its brewery to compensate for the growing demands of the company. Peachtree has paid $10,000 to J&C with the expectation that the kegs would have been delivered ten days ago. As a result, Peachtree claims that they have lost $20,000 in potential profits. They also claim that they have had to throw out $25,000 worth of their new peach IPA beer because they do not have enough kegs to keep it. Peachtree claims that they do not receive a refund as well as compensation for their loss, they will sue J&C for breach of contract.

Beyond these concerns, Mr. McIntosh just let me know (he claims it "slipped his mind" when we acquired J&C) that the company is in the midst of an active investigation by the Environmental Protection Agency regarding toxic emissions and waste dumping that may result in civil and possibly even criminal sanctions. The EPA is sending an investigator next week before the Thanksgiving holiday, and Mr. McIntosh is thinking about closing operations for the entire week in the hopes that the EPA investigator will reschedule the on-site inspection. Mr. McIntosh is afraid - because of the possibility of criminal sanctions - that he may have to go to jail.

And as if things could not get worse with our new acquisition, Mr. McIntosh also informed me that J&C was served with two separate lawsuit complaints this week. One complaint has been filed in federal district court in Massachusetts by Danny, the disgruntled former administrative assistant. Danny is claiming that he was wrongfully terminated. Beyond that, he claims that he has contracted emphysema from working so close to the manufacturing plant. What is more concerning is that Danny sent a text message to Mr. McIntosh this morning demanding $25,000 or he will "blow the whistle" and tell the EPA everything he knows about toxic emissions and waste dumping by J&C.

The other lawsuit was brought by the employees fired after the BW-316 fiasco. This looks like a class action filing. This particularly concerns me because they are not only naming J&C as a defendant, but they have also included Emory Holdings as a defendant as well. The employees are asking for $1 million in lost wages as well as $2 million punitive damages. They also want their jobs back, and they want Mr. McIntosh fired and possibly sent to prison. This lawsuit has been filed in Georgia state court.

Please help! I need to give a report to my COO by December 13. I will need your response with advice by then.

Respectfully,

Micole Krebs

You are Emory's outside counsel.Please have a recommendations letter to her promptly and completely. Be aware that Jackson & Carter LLC is suffering from lapse in ethical judgment and probably needs some guidance there as well.