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MGMT 466, chapter 4
Constitutional Authority to Regulate Business
38
Management
Undergraduate 4
06/08/2009

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Term
Federalism
Definition
power is divided between nat'l government and state governments. US constitution designates certain powers to the nat'l government, and state get the rest, unless the US Constitution specifically prohibits the state power.
Term
Privileges and Immunities Clause
Definition
article IV, section 2 of US constitution: 'the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.' means if citizen of TX engages in basic and essential activities (earning a living) in LA, they must be treated same as citizens of LA unless LA has a substantial reason for treating noresidents differently from its own residents and the reason for the discrimination is substantially related to LA's purpose in adopting the legislation.
Term
Full faith and Credit Clause
Definition
article IV, section I of US Constitution: "full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.' applies ONLY TO CIVIL MATTERS. rights established under deeds, wills, contracts, and judgments of court will be honored in other states
Term
separation of powers
Definition
three branches of gov: executive, judicial, legislative.
Term
commerce clause
Definition
Regulates commerce with foreign nations and between states.
Term
Gibbons v. Ogden (1824)
Definition
Fed gov can regulate INTRAstate commerce if it concerns more than one state.
Term
Wickard v. Filburn (1942)
Definition
Farmer's crop production to be used wholly for consumption on his farm was subject to federal regulation b/c it affected interstate commerce.
Term
McLain v. Real Estate Board of New Orleans, Inc.
Definition
Federal gov can regulate wholly local businesses that effects interstate commerce.
Term
US v. Lopez (1995)
Definition
Congress exceeded its authority in passing Gun-Free School Zone Act of 1990, because it attempted to regulate an area that had nothing to do with commerce or any sort of enterprise.
Term
US v. Morrison (2000)
Definition
Supreme Court invalidated key portions of the federal Violence Against Women Act of 1994, which allowed women to sue in federal court when they were victims of gender-motivated violence, such as rape.
Term
Heart of Atlanta Motel v. US (1964)
Definition
Constitutionalized the Civil Rights Act of 1964.
Term
Police Power (regulatory power of the state)
Definition
right of state governments to regulate private activities to protect or promote the public order, health, safety, morals, and general welfare
Term
Dormant Commerce Clause (regulatory power of states)
Definition
States aren't supposed to regulate interstate commerce. When they interfere, Courts must balance state's interests in the purposes of the regulation against the burden placed on interstate commerce.
Term
Supremacy Clause
Definition
US constitution, laws, and treaties are "supreme law of the land."
Term
Preemption (supremacy clause)
Definition
When congress chooses to act exclusively on what could be a concurrent area (states could regulate). When there is a direct conflict between fed and states, fed law will prevail.
Term
Taxing Power (regulatory powers of state)
Definition
Congress has the power to tax, but must be uniform throughout the US. courts allow tax if it is a valid revenue-raising measure.
Term
Spending Power (regulatory powers of state)
Definition
congress pays debts and provides for defense and general welfare of US. Rarely challenged--problem with standing--plaintiff must show a direct and immediate personal injury to challenge federal spending power. Congress can spend revenues to promote any objective it deems worthwhile.
Term
Bill of Rights
Definition
Originally only applied to fed gov. Most, but not all, have been incorporated to states through the 14th amendment.
Term
1st Amendment
Definition
Freedom of speech. Includes 1.) Symbolic speech (gestures, movements, clothing, burning of American flag). 2.) Commercial Speech (busn speech/ads). Businesses don't get as much protection as individuals.
Term
Central Hudson Test (restricting commercial speech)
Definition
1.) the speech is protected by 1st amendment. 2.) Seeks to implement a substantial gov interest. 3.) Directly advances that interest. 4.) Goes no further than necessary (narrowly tailored).
Term
Unprotected speech
Definition
Defamation. Lewd and obscene speech (difficult to define, left to local standards, CP is banned completely,). Fighting words.
Term
Two clauses of Freedom of Religion
Definition
Establishment Clause, Free Exeercise Clause
Term
Establishment Clause (freedom of religion)
Definition
Fed or state regs can have an impact on religion as long as it does not place a significant burden on religion. 1st Amendment doesn't require a complete separation of state.
Term
Free Exercise Clause (freedom of religion)
Definition
If a law is contrary to a person's religious beliefs, exemptions are often made to accommodate those beliefs. If religious beliefs work against public policy and welfare, the government can act. TEST: must be some demonstrable relationship b/w the practice at issue and religion.
Term
Business Aspects of Freedom of Religion
Definition
Civil Rights Act prohibits discrimination on the basis of religion. Employers must reasonably accommodate the religious practices of employees, but do not have to put an undue hardship on the business to do so. ONLY REQUIREMENT: belief is religious in nature and employee must sincerely hold belief.
Term
4th Amendment - Search and Seizure
Definition
People are protected in the "right ... to be secure in their persons, houses, and effects." Office must have probably cause to believe serach will find specific illegal activity. General warrants are prohibited. Search only extends to what is described in the warrant.
Term
Exceptions to search warrant requirements
Definition
1.) if it is likely that the items to be searched/seized will be removed before warrant can be obtained. 2.) Plain view. 3.) Consent.
Term
Search and Seizure & Businesses
Definition
Standard is less for businesses. Warrant still required, but only takes the existence of a general and neutral enforcement plan. Warrants NOT required if 1.) Seizing spoiled or contaminated food. 2.) Searching highly regulated industry (guns, liquor).
Term
When can random drug tests be given?
Definition
If for safety/disciplinary reasons, they are constitutional.
Term
Self Incrimination - 5th amendment
Definition
No person shall be compelled in any CRIMINAL case to be a witness against himself. Applies to sole proprietors and solo practitioners, NOT to corps or pships.
Term
Due Process
Definition
5th and 14th. No person shall be deprived of life, liberty, or property w/o due process of law. Procedural/Substantive.
Term
Procedural Due Process
Definition
Focuses on the procedures used when the gov takes life, liberty, or property. Requires strict procedural safeguards for gov to be able to take these away.
Term
Substantive Due Process
Definition
Focuses on content (substance) of legislation or gov action. Standard of review is test applied by courts to determine if a law violates Constitution.
Term
Standard of Review (Due Process)
Definition
Test applied by courts to determine if a law violates Constitution. 1.) Legislation restricting a "fundamental right" (1st amendment rights): apply STRICT SCRUTINY TEST: meaning a compelling or overriding governmental interest must be promoted by the legislation. 2.) Any other legislation: requires RATIONAL BASIS TEST: requires that legislation relate rationally to a legitimate gov purpose.
Term
Equal Protection, 3 tests
Definition
14th: A state may not "deny to any person within its jurisdiction the equal protection of the laws." Means that gov must treat similarly situated people in a similar manner. Test 1.) Strict scrutiny, 2.) Intermediate scrutiny, 3.) Rational basis
Term
Strict Scrutiny Test (equal protection)
Definition
Must be dealing w/ a fundamental right and restricting a "Suspect Class" (race, nat'l origin, citizenship, religion). Government MUST show that the classification serves a compelling state interest and that the classification is necessary to serve that interest.
Term
Intermediate Scrutiny Test (equal protection)
Definition
Classification based on Gender or Legitimacy. Gov must show that the classification serves an important gov objective and that the classification is at least substantially related to serving that interest.
Term
Rational Basis test (equal protection)
Definition
Classification based on economic or social matters. Gov must show that the classification is rationally related to serving a legitimate state interest.
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