Running Head: Project 2: Making Decisions That are Legal and Ethical 1

Project 2: Making Decisions That Are Legal and Ethical

Joshua Beavers

University of Maryland Global Campus

MBA630 Leading in the Multicultural Global Environment

Professor Keith Diener

April 23, 2024

Project 2: Making Decisions That are Legal and Ethical 2

Introduction

Turnip Plaza Hotel, a luxury hotel for Colossal Corporation located near Lake Huron’s

famous Turnip Rock, was fortunate to have a skilled tour guide named Mark Piper. Mark's

expertise in extreme kayaking, hiking, and camping adventures in and around the Great Lakes

was unparalleled. He was a sought-after guide, often requested by name by tourists visiting the

hotel. His prowess even earned him a spot on extreme sports television. His high-adventure

kayaking tours were not just thrilling experiences for the tourists but also a significant source of

revenue for the hotel (UMGC, 2024).

However, Mark was approached by a rival manager at the Huron Overnight Inn, who

offered him a higher compensation than what he was receiving at Turnip Plaza Hotel. When

Mark's manager, Edward Griffin, discovered this offer through another employee, he spoke to

Mark about his current employment at Turnip Plaza Hotel. To convince Mark to decline the rival

offer, Edward offered him a promotion, a 50% raise, and a guaranteed two-year contract. This

persuaded Mark, and he rejected the rival hotel's manager's offer.

Regrettably, just a week before the ink could dry on the new contract, corporate made a

sudden and unexpected decision to dismiss Mark. Their concerns about the increased liability

risks of managing high adventure tours through Colossal's hotel led to this abrupt action, leaving

Mark and his future in a state of uncertainty.

This report aims to evaluate and be proactive if Mark is willing to take legal action. The

question to be addressed is what legal theories Mark can use to enforce Edward's promise. If

Mark were to file a lawsuit and potentially win, what damages and/or remedies would Mark be

owed? Additionally, does Turnip Plaza Hotel have an ethical obligation to fulfill Edward's
Project 2: Making Decisions That are Legal and Ethical 3

promise to Mark? The moral and ethical implications of dismissing Mark, considering an ethical

perspective, are significant and need to be considered.

Legal Theories

The manager of Turnip Plaza Hotel, Edward Griffin, entered into a contract with Mark

Piper. Although there was no formal agreement or written document, an express contract arose

with the verbal communication between Edward and Mark (Marson, 2011). Edward's

communication promised Mark’s services as a tour guide with Turnip Plaza with an offer of a

promotion, increased compensation, and a guaranteed commitment to be employed for a two-

year term (Marson, 2011). Mark, as a promisee, accepted the offer and understood the exchange

of value, and as such, he would continue to be employed with Turnip Plaza Hotel with increased

compensation. During Edward's verbal promise, there was a meeting of minds, and neither party

was under any form of influence and had full intention and understanding of the agreement.

These elements prove Mark conducted a valid contract with Turnip before his dismissal from his

employer. Although Turnip Plaza Hotel fired Mark before the actual signing of the formal

agreement, this would still be considered a breach of contract. One of the elements of the offer

was guaranteed employment for two years. Mark did not make it a week before he was let go.

The dismissal by corporate breaches the clause of the contract Edward as an agent of Turnip

Plaza conducted with Mark.

To further enforce the contract, Mark can make the case of the verbal agreement to be a

broken promise in addition to a breach of contract; this would be a valid case under a doctrine

known as promissory estoppel. The equitable doctrine of promissory estoppel applies when one

party relies to her detriment on another party's promise (Marson, 2011). Edward made a promise

or offer to Mark, which discouraged him from accepting an offer from a rival hotel, and the
Project 2: Making Decisions That are Legal and Ethical 4

detriment was Turnip Plaza Hotel dismissing Mark before signing the verbal contract on the

grounds of liability. Mark suffered a significant loss by accepting the offer with Edward and

Turnip Plaza Hotel. If he had rejected Edward's offer or not given one, he would be with

employment as he could/would have accepted the rival manager's offer at Huron Overnight Inn.

The court can hold the verbal contract to be enforceable under the doctrine of promissory

estoppel (Marson, 2011).

As per common law, when one party offers something in return for the other party's

continued performance of an existing obligation, the contract between the parties becomes a

modified contract (Nolo, n.d.). In the case of Edward and Mark, Edward offered Mark a

promotion and continued employment for two years in exchange for Mark's continued service at

Turnip Plaza. This modification was not formal and was made orally, but it was still binding

under common law (Nolo, n.d.).

It is important to note that verbal contracts can be just as valid and enforceable as written

contracts under common law. This means that Mark has a solid case to enforce the modified

terms of the agreement in his favor, either by keeping his job or receiving compensation for any

damages incurred due to the breach.

In Mark's case, Turnip Plaza failed to keep its promise under promissory estoppel. This

legal doctrine prevents a party from returning on a promise made to another party if the other

party relied on that promise to their detriment. As a result, the modified contract between Mark

and Edward became legally binding, and Mark had a right to enforce the terms of the agreement.

It is crucial to consider all legal precedents when analyzing similar situations in the future

to ensure that the rights of all parties involved are protected. Mark's rights are protected by

common law, and justice must be served in this matter.

Project 2: Making Decisions That are Legal and Ethical 5

Damages and/or Remedies

In the event that Mark chooses to take legal action against Turnip Plaza Hotel and the

court rules in his favor, he may be entitled to collect damages and/or remedies as compensation

for the breach of contract. The damages awarded by the court are generally compensatory in

nature, meaning they are intended to restore the plaintiff to the position they would have been in

had the contract been appropriately executed. These damages are an essential aspect of contract

law, as they ensure that parties are held accountable for their contractual obligations and that fair

compensation is provided to those who have been wronged (Marson, 2011).

According to Marson (2011), if Mark were to sue his former employer, Turnip Plaza, for

breach of contract, he could potentially claim damages equal to the increase in his salary over

two years. This would represent the profit he would have made if he had not been wrongfully

dismissed. Furthermore, Mark could also claim consequential damages resulting from an unusual

loss that both parties were aware would be caused by the breach of contract.

The contract was made because Mark was offered a job by a rival hotel with a better

salary package. To retain Mark's services, Turnip Plaza made a counteroffer via their

representative, Edward, which Mark accepted, thereby rejecting the rival hotel's offer. However,

Mark was later dismissed from his job, which resulted in him losing the opportunity to work

elsewhere (Marson, 2011).

If Mark had resigned before being dismissed by Turnip Plaza or had been fired before

agreeing to Edward's counteroffer, he could have accepted the rival hotel's offer and continued

his employment. Therefore, Mark could potentially claim damages equal to the salary the rival

hotel had offered him as consequential damages (Marson, 2011).

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Furthermore, Mark would be entitled to the broken promise by Turnip Plaza Hotel under

the doctrine of promissory estoppel. As stated, Edward promised, and Mark accepted the offer

with consideration, although it was not written, due in part to his firing. The hotel did not commit

to its promise, and Mark should be able to collect damages as a remedy for his unexpected

unemployment (Graw, 2019). In addition, Mark could claim job reinstatement as a remedy

instead of collecting damages. That would be an agreed-upon decision with Turnip Plaza, as they

would need to decide if the risk of Mark’s tours is greater than the damages to be owed. Mark

would be able to collect reliance damages. He relied on this job to pay him for his services and

employment. His reliance on the hotel with increased wages and a two-year term would mean he

personally has a more comfortable living situation (paying personal expenses), and he would not

need to worry about being unemployed for two years. Since they fired him shortly after the

agreed promise, he no longer has the means to keep up his current lifestyle (Graw, 2019).

It is important to note that the amount of damages awarded by the court may vary

depending on the case's specific circumstances. Additionally, the court may also consider other

factors, such as the likelihood of Mark finding alternative employment and the amount of effort

he has made to mitigate his losses (McKendrick, 2014).

Legal and Ethical Issues

Legal Issues

Edward promised Mark that he would keep him on board after a rival hotel manager tried

to recruit him away from Turnip Plaza Hotel. Under agency law, Edward is a general agent

acting on behalf of his employer/principal, Turnip Plaza Hotel. Edward's actions to counteroffer

the rival hotel manager's offer can be viewed as part of his responsibilities or within his scope of

work to keep employees working for the company. Turnip Plaza ultimately fired Mark because
Project 2: Making Decisions That are Legal and Ethical 7

of his high-risk tours. Although those tours generate a high profit, they can come with high

liability claims if someone gets hurt. It can be argued that this is a valid point of view from the

hotel's perspective, but it may not be considered an ethical decision to terminate Mark's

employment, as he was hired to provide tours. Additionally, it is currently unknown whether the

hotel has a liability waiver or insurance policy for its tour guides. Turnip Plaza Hotel should be

obligated to honor the verbal agreement made between Edward and Mark.

The Statute of Frauds (SOF) is a legal principle that requires certain contracts to be in

writing for them to be enforceable (Verkerke, 2012). The one-year rule is a provision in the

Statute of Frauds that requires certain contracts to be enforceable in court in writing. It stipulates

that any agreement that cannot be performed within one year from the date of the contract's

creation must be in writing to be enforceable (Legal Information Institute, n.d.).

In the case of Mark Piper and Turnip Plaza Hotel, the contract involved a guaranteed two-

year term of employment. Since this agreement could not be completed within one year, it could

be subject to the one-year rule. However, the contract was not in writing and, therefore, would

not be enforceable under the Statute of Frauds.

However, employment contracts are not generally subject to the SOF. This means that a

verbal agreement, such as the one between Mark and Edward for a two-year employment

contract, can still be legally binding and enforceable. However, it can be more challenging to

prove the terms of a verbal agreement in court than a written contract.

The part-performing exception in employment contracts refers to a situation where an

employee is terminated before completing their work under a contract but has already provided

some value to the employer by completing part of the work. In such cases, the employer may still

be obligated to pay the employee for the work that has been completed, but the application of the
Project 2: Making Decisions That are Legal and Ethical 8

exception can be complicated and may depend on various factors. Additionally, an employer may

be entitled to offset the value of the work already performed by the employee against any

damages or losses caused by the employee's failure to complete the job (Barnes, 2019).

In Mark's case, the part performance exception may be relevant as it can be used to

enforce an oral contract that has been partially performed. Mark accepted Edward's offer of a

promotion, increased compensation, and a guaranteed two-year contract, which encouraged him

to decline an offer from a rival hotel. Mark continued to work as a tour guide for Turnip Plaza

Hotel, which can be considered a partial performance of his obligations under the oral contract.

However, Turnip Plaza Hotel dismissed Mark before he could sign the formal agreement, which

breached the contract. If Mark were to pursue legal action, the part-performance exception could

be used to enforce the oral contract, as he partially performed his obligations, and it would be

unjust to allow Turnip Plaza Hotel to avoid their obligations under the contract (Nolo, n.d.;

Barnes, 2019).

Ethical Issues

Was it right to lay off the highly regarded tour guide? Outside of the legal ramifications,

this is an ethical issue. It is best to review the ethics test to grade the ethical issue. The first is

called the front-page test or viral news test. If this case made the front-page news, how would it

proceed? The title of the best news could have been "Local well-known tour guide promoted,"

but unfortunately, due to the hotel's decision, it may now read "Broken promises and

termination." Indeed, the firing was not because of the agreement, but the timing of the firing

versus the reason can be convoluted and viewed negatively if viewed from the public eye. There

are five other traditional tests to evaluate this decision. Next, we have rights with respect to the

human rights of those affected. Mark was fired from his job without any respect or dignity.
Project 2: Making Decisions That are Legal and Ethical 9

Although he was offered generous compensation by Turnip Plaza through Edward, he was

ultimately let go due to a corporate restructuring. The situation was not just or fair, as all parties

involved were not treated equally or proportionally. According to the case, there was no

discussion regarding keeping Mark before his firing. He entered an agreement and, within a

week, was let go. Based on his agreement, there was a two-year term to stay on board, and he did

not even make a week; that is not justice or fairness. As previously stated, virtues, honesty, and

integrity toward Mark were few and far between.

In terms of the common good, Turnip Plaza Hotel looked at the case from a financial

point of view. Mark’s extreme tours can be risky and have a high liability if someone is hurt.

However, in this case, it can be said that Mark had not had a problem with a tourist getting

injured during his tour guide activities. It is fair to look out for people, but Mark is the best at

what he does, and he would not want to get someone injured because it could cost him his job.

He has not committed any harm, but the promise the hotel made and Mark's suffering are not the

common good. Lastly, utilitarianism, or the greatest good principle, does the overall good

outweigh any bad? The bad here is Mark’s untimely firing; the good is that the hotel avoids

potential liability cases if someone were to get hurt during Mark’s tours in the event the hotel

does not have insurance or a liability waiver in place. Nevertheless, the greater good is Mark

overperforming in his position; bringing in high profits could outweigh some of the risks if

someone also got hurt.

From an ethical perspective, it would be unfair to lay off an employee who contributed

immensely to the hotel's and the corporation's success. Mark has dedicated several years to the

hotel and has developed a reputation as a skilled tour guide. Laying him off would be a
Project 2: Making Decisions That are Legal and Ethical 10

disservice to him and the tourists who have come to rely on his expertise and the hotel's

reputation.

In conclusion, laying off Mark Piper due to his significant contribution to the Turnip

Plaza Hotel and Colossal Corporation would not be ethical or legal. The hotel has a moral and

legal obligation to treat its employees fairly and adhere to employment laws and regulations.

Recommendation

From an ethical and legal perspective, Turnip Plaza has a significant decision to make.

Unfortunately, the decision does not mean to re-hire Mark; the unfair treatment can more than

likely lead to underperformance, loss in profit, and ultimately a more significant risk factor than

anticipated; if re-hired, the question becomes two parts: what to do with Mark? And how can

Turnip Plaza protect itself in the future if this instance arises again? It would be right to

apologize for what it is worth and be honest about the decision to fire him; this can be a learning

point for Mark as he ventures elsewhere. At the same time, it would be fair to impose a bonus

factor or monetary agreement between the two parties to honor a portion of the agreement, in a

way avoiding court and potentially more considerable losses if brought to court. The agreement

would be a peace offering because the offer Edward put onto Mark interfered with Mark still

being employed; if Edward had known the corporate decision prior to the dismissal or Edward

had not known about the offer from the rival hotel, Mark would be working elsewhere.

The second question is whether Turnip Plaza could or has instituted a waiver/liability

form for the tourist to sign. This way, the consumer understands the dangers and risks they are

taking if an unfortunate happenstance occurs during a tour, extreme or not. This way, all parties

are protected, including the Turnip Plaza Hotel, as they warn the tourists, and the tourists would

understand what is coming by participating in the following activity.

Project 2: Making Decisions That are Legal and Ethical 11

Conclusion

In conclusion, Mark Piper's case against Turnip Plaza Hotel is a valid legal and ethical

issue. The verbal contract between Mark and Edward Griffin, the manager of Turnip Plaza, is

binding under common law, and Mark's acceptance of the offer and the exchange of value make

it a valid contract between the parties. Edward promised Mark a promotion, increased

compensation, and a guaranteed commitment to be employed for a two-year term at Turnip Plaza

Hotel, and Mark accepted the offer based on this promise.

However, Turnip Plaza Hotel dismissed Mark just a week before the ink could dry on the

new contract, citing concerns about the increased liability risks of managing high adventure tours

through Colossal's hotel. This sudden and unexpected decision by the corporation is a breach of

contract and a violation of ethical principles. Mark relied on Edward's promise and suffered a

loss when he rejected the rival hotel's offer. Dismissing him without any valid reason is not only

unethical but also a breach of trust.

If Mark were to file a lawsuit against Turnip Plaza Hotel, he could potentially win and be

owed damages and/or remedies. The court could hold the verbal contract to be enforceable under

the doctrine of promissory estoppel, as Mark suffered a significant loss by accepting Edward's

offer and rejecting the rival manager's offer at Huron Overnight Inn. Additionally, Turnip Plaza

Hotel has an ethical obligation to fulfill Edward's promise to Mark.

Therefore, Turnip Plaza Hotel should take prompt and appropriate action to rectify the

situation and fulfill its obligation to Mark. The hotel should offer Mark a compensation package

equivalent to or better than what he would have received under the new contract and apologize

for the inconvenience and hardship he has faced due to the hotel's breach of contract and

unethical behavior.
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References

Course Resource Turnip Plaza Hotel (2024) University of Maryland Global Campus. Retrieved

from https://leocontent.umgc.edu/content/umuc/tgs/mba/mba630/2211/courseresource-

list/the-turnip-plaza-hotel.html?ou=541394.

Barnes, M. (2019). The part performing exception in employment contracts. Employment Law

Handbook

Graw, S. (2019). An introduction to the law of contract (9th ed.). Thomson Reuters.

Legal Information Institute. (n.d.). Statute of Frauds. Retrieved from

https://www.nolo.com/legal-encyclopedia/what-is-the-one-year-rule-in-the-statute-of-

frauds.html

Marson, J. (2011). Business Law: Vol. Second edition. OUP Oxford

Nolo. (n.d.). Oral contracts. Retrieved from https://www.nolo.com/legal-encyclopedia/oral-

contracts-do-exist-make-36147.html

Verkerke, J. H. (2012). Contract Doctrine, Theory & Practice - Volume 2. Open Textbook

Library.