If you were an Ohio business owner many years ago, you only needed to know the laws affecting business in Ohio. Now, the legal environment is much more complex. The pervasiveness of the Internet and other technologies has not only added new dimensions to business law, but has also changed the way business law is carried out. While businesses have always needed to attend to the legal ramifications of their actions, it has become even more important to understand the ever-shifting legal system in today’s technological world.

One of the most prominent changes is the nature of intellectual property. Everyone has the ability to create and distribute content through social media, blogs, and personal websites. It is important to avoid using another entity’s trademarked phrases or images on the web, such as in domain names. It is also essential to identify and agree upon ownership of content on a website, especially when working with a web developer or host service. Social media users must be aware of the terms of uploading content such as images or videos. An article posted on LinkedIn, for example, can be used and distributed in any way LinkedIn sees fit.

Online communications bring a host of new legal issues that businesses should know. Defamation of companies and their employees has greatly increased and become more difficult to track. Businesses must vigilantly monitor the web for any disparaging or dishonest comments that may be detrimental to their success. Using social media as a means of providing customer service can help to resolve these issues. Marketing communications and digital advertisements, too, are subject to a world of new legal implications. Laws such as the CAN-SPAM Act place strict regulations on what can and cannot be included in promotional emails. Businesses should be aware of the FTC’s many guidelines and regulations for Internet marketing that will undoubtedly continue to change along with technological progress.

Another potential legal issue brought about by the Internet involves interstate and international commerce. In the past, most businesses were locally based, but now, businesses of any size can sell online to customers in other states and countries. Those who sell online must know the taxes and regulations in new markets. Sales taxes, which are traditionally enacted at the state level, present a problem. States have attempted to tax online retailers who sell to customers but do not have an established physical presence in that state. Legislation currently in Congress would simplify the policies, but until it is enacted, businesses need to ensure they are aware of the intricacies surrounding sales taxes and other international commerce regulations.

The nature of contracts has also evolved with technological advancements. The process of contract negotiation, traditionally lengthy and painstaking, has become instantaneous and interactive thanks to the use of electronic documents and communication. Ambiguous “back and forth” paper exchanges have been eliminated, along with timing disputes that can be easily resolved through the use of electronic records.

Despite these convenient simplifications, however, the digitalization of contracts involves some complications as well. Laws that determine what constitutes an e-signature vary across countries. Some consider simple electronic signatures to be equivalent to a handwritten signature, whereas others require encrypted digital certificates to authenticate the signer’s identity. Additionally, contract negotiators must ensure that all parties assent to the terms and conditions through electronic means. Many contracts require the reader to click a button or to scroll through the terms entirely before they can sign and indicate their agreement. It is recommended that in all cases, business contracts include consent to sign electronically, an opt-out option, an audit trail, and transparent circulation of the complete electronic document to all parties.

Data privacy law is one of the most prevalent and controversial issues brought about by the prevalence of the Internet. Governments and legal entities are struggling to determine how to handle the vast amount of personal information exchanged over the internet between individuals and customers. Businesses have a responsibility to handle customer information in the appropriate manner, which becomes further complicated when data is exchanged globally. Data protection laws differ substantially in various countries in terms of the level and nature of regulation.

One example of the complications that occur due to these discrepancies is the Safe Harbor Privacy Principles between the European Union and United States companies. The Safe Harbor Privacy Principles were designed between 1998- 2000 to manage the secure transfer of information between the EU and the United States. Because European officials felt that the privacy laws in place in the U.S. were not adequate in comparison to the EU’s stringent standards, they offered U.S. businesses a way to opt in by adhering to certain guidelines. If the businesses complied, they could receive data transferred from the EU.

In 2015, the European Court of Justice invalidated the Safe Harbor Principles, claiming that the data protection measures in place in the U.S. were still inadequate. The decision was largely influenced by the 2013 leak that revealed the NSA’s surveillance practices. US companies were faced with the task of complying with the EU’s strict regulations instead of the relatively simple guidelines of the Safe Harbor decision. Nearly a year later, a new mechanism for personal data exchanges has been implemented, called the Privacy Shield. The Privacy Shield Principles have some similarities with the Safe Harbor Principles, but they impose stricter and more specific requirements on U.S. companies.

The site “DLA Piper’s Data Protection Laws of the World Handbook” offers a comprehensive guide to world data protection laws and allows you to easily compare different types of law across the world: https://www.dlapiperdataprotection.com/#handbook/about-section

Classroom Implications

Most students can barely remember a world without the Internet’s ubiquity, so the changes in the legal system may not appear quite so drastic to them. However, they should be aware of the ways in which technology affects the legal system so they will understand the need to stay up-to-date on changes and developments. Students have probably already encountered online contracts when downloading software or signing up for social media accounts. However, they might not realize that by clicking “I Accept,” they are entering into a legally binding contract. They should be cognizant of what exactly they are accepting and should develop the practice of carefully considering terms and conditions.

Ownership of content on social media and data privacy are both legal issues to which students can relate. Students may not think twice about posting a photo on social media until they learn that the site owns that content and can use it in various ways. Increased knowledge of the laws affecting data collection can help students to stay safe online and avoid unfair marketing practices.  

Sustainable development--meeting the needs of the present without compromising resources for the future--is a topic being grappled with daily by business and industry. Last month’s Action Brief explored shifting factors in energy supply and demand, while this month’s brief dives into how businesses are working to reduce their carbon footprint and what factors impact their progress/willingness to get onboard. As our good friend Kermit says, it’s not easy being green.

Business Implications

Businesses are taking innovative measures to implement renewable energy sources and/or reduce their carbon footprint. Many companies are purchasing carbon offsets and renewable energy credits for this purpose. Other efforts include:

• Recycling—metals, petroleum products, paper products, plastic
• Repurposing—furniture, décor, food waste, rain water
• Reusing—packaging, containers, operating-room instruments
• Installing—occupancy monitors in HVAC and electrical systems; efficient light sources, fixtures, appliances, and controls; vehicle recharging stations; rooftop solar panels; watering stations to refill reusable water bottles; LEED certified buildings, green roofs
• Monitoring—suppliers’ sourcing, production, shipping, and transporting activities
• Reducing—amount of packaging materials used, weight/volume of products, total reliance on nonrenewable energy sources, use of hazardous materials, energy used in production processes, waste going into landfills and water supplies
• Producing/Selling—environmentally friendly products
• Partnering—with other entities focused on green energy
• Utilizing—SMART manufacturing techniques, LEED criteria for building upgrades, Greenhouse Accounting methods to track greenhouse emissions and offsets, renewable energy sources, locally grown foods, natural lighting, local supply chains
• Encouraging—consumers to re-use hotel sheets and towels; employees to take steps to curb energy consumption; and use of bicycles, shuttles, and public transportation for commuting

Green construction is having a positive effect on the economy and will continue to do so as demand grows. Green building programs are largely responsible for the $134 billion annually being taken home by 2.3 million U.S. workers. LEED certified and other green buildings can be costlier to build than traditional construction (some experts estimate a $3-$5 per foot increase or much more, depending on added green features), but the higher initial cost is associated with greater energy and cost savings throughout the life of the building.

The Morgan Processing and Distribution Center (part of the United States Postal Service) in New York City sports a 2.5-acre green roof which cost about $30 per square foot to install-- twice as much as a traditional roof. The roof’s lifespan, however, will be about 50 years (twice as long as the roof it replaced). The green roof, along with other energy saving measures implemented at the center, help save the postal service over $1 million per year.  Cost recovery, in this situation, could likely occur in three to five years.

While the initial costs can still be prohibitive for building or going green, other factors impacting the “greening” of businesses include:

• Concern about reliability of renewable energy sources
• Concern that energy efficiency processes might compromise overall business operations and therefore the bottom line
• A perception that the changes made in one business might not make a difference to the overall environment
• Inability to pinpoint carbon outputs and track waste streams accurately in order to assess potential effectiveness of efforts to be energy efficient
• Confusion about environmental claims
• Costs associated with changing and adjusting production processes
• Concern about willingness of customers to pay more for green products

Greenwashing—the act of marketing a product as more environmentally friendly than it actually is—has become a major concern. In response, the Federal Trade Commission (FTC) developed the Green Guides, designed to help businesses market their products more accurately, but they are not enforceable by law. The FTC can, and does, pursue false or misleading environmental claims made by companies under Section 5 of the FTC Act: 15 (Unfair methods of competition unlawful; prevention). Still, confusion over terms like eco-friendly, recyclable, green, biodegradable, and earth-friendly are rampant. Some consumers are giving up their green efforts completely due to the complexities. In short, businesses need to substantiate the environmental claims that they make about their products or risk consumer--and sometimes legal-- backlash.

Classroom Implications

Understanding the technological, political, and economic systems that drive energy is a life-long learning process. A good place to start is by having students compare various types of renewable energy as explained by the National Renewable Energy Laboratory: http://www.nrel.gov/workingwithus/learning.html

Ask students to discuss carbon neutrality in business operations. They could consider the following:

• What are the challenges businesses may face in becoming carbon neutral or offsetting carbon   emissions?  Are these challenges different for smaller vs. larger companies?
• What are some of the ways businesses can move towards carbon neutrality?
• Is there a moral obligation for businesses to become carbon neutral?

How are other countries addressing energy issues both from a business and community perspective?  These two resources will help broaden students’ global perspective on energy use:

• http://e360.yale.edu/content/feature.msp?id=2955
• http://www.businessinsider.com/solar-energy-is-on-the-verge-of-a-global-boom-2015-4

Is it possible for politics and conflicting business interests to influence energy choices?  See this article about what a group of students ran into as they attempted to make their school more environmentally friendly: http://www.dw.com/en/students-preach-renewable-energy-get-politics-lesson/a-19426179

Ask students to identify local use of environmental marketing and pinpoint potential incidents of greenwashing. This resource will help students better understand greenwashing and some of the enforcement actions taken by the FTC: http://www.greenerpackage.com/green_marketing/ftc_cracks_down_biodegradable_marketing_claims

The potential impact of shale on natural resource availability in the U.S. and abroad is unknown but potentially a game-changer. Heightened focus on the preservation of global resources for future generations plays a role in the energy debate. As energy resources are explored, and utilized in different ways, companies have to deal with the resulting supply-chain issues. This month’s Action Brief looks at shifting factors in energy supply and demand, and some of the resulting economic effects. 

Business Implications

Greater availability of domestic energy resources has drastically changed the face of gas and oil production in the United States. The “shale revolution” is reshaping the country’s dialogue about energy strengths and weaknesses, especially now with record amounts of propane and other natural gas liquids being exported. Other countries with shale resources are also working to extract gas and tight oil, but access to fresh water reserves used in the process can present a challenge in many parts of the world. Coal plants and other traditional energy operations are closing or laying off massive numbers of workers as they go out of business or restructure to support alternative energy’s processing and delivery.

Companies in the renewable energy sector are also experiencing their own viability issues. Many companies are struggling to stay financially solvent while facing funding issues and other business challenges not unusual for start-ups. Government subsidies are potentially on the chopping block which adds to eroding confidence in many companies. While renewable energy is relatively low-cost, and growing in use, many companies are coming up short with funding to support new and growing infrastructures. 

The boom in natural gas and oil holds many potential benefits, such as less dependence on foreign resources, increased manufacturing, more choices and lower prices for consumers, and maybe even cleaner air. Disadvantages are:

• Potential contamination of water and other natural resource supplies due to fracking and wastewater disposal
• Fracking induced earthquakes
• Loss of jobs and revenue in traditional and new alternative renewable energy source sectors

Much to the dismay of environmentalists, the shale boom may have somewhat slowed a shift toward the use of products that utilize renewable energy sources. As an example, many consumers are passing up hybrid vehicles for conventional gasoline-only models. Surprisingly, even some consumers who had switched to hybrids are going back to fuel-only powered vehicles. Lower gasoline prices mean a longer break-even time for consumers purchasing hybrids. Guessing that the price of gasoline will rise again, automakers are ramping up production of traditional vehicles, but not putting hybrids on the shelf just yet.   

While hybrid car sales may have taken a recent hit, studies show that more than 50 percent of consumers from across the globe are willing to pay more for products from companies committed to making an environmental impact. As consumers become more savvy about sustainability issues, many companies are strengthening their green appeal in the following ways:  

• Incorporating more areas of relevance to customers’ lifestyles
• Encouraging customers to live sustainably beyond that particular product
• Understanding what social and environmental issues their customers are concerned about and continuing to address those concerns in product development
• Demonstrating credible environmental impact (proof) based on product sustainability

How are these companies and others walking the walk? Look for next month’s Action Brief when we explore how companies are working to reduce their carbon footprint and the obstacles they are facing in doing so. 

Classroom Implications

Understanding the different types of energy and basic cost implications of use can be crucial for students as they enter into the energy debate and understand the impacts on business: 

• Help students become energy literate by accessing information and lessons on this website: http://cleanet.org/clean/literacy/energy/index.html 
• Explore energy related issues with students such as:
• How are decisions made regarding energy use—what are the main drivers?
• How do varying energy sources impact the economy and the environment?
• How do energy policies vary in different states/countries?
• How do energy prices and the process of importing/exporting affect our economy?
• How are businesses impacted by fluctuations in energy costs, and what are some of the techniques used in mitigating those variations? 
• Ask students to identify local business efforts to sustain energy. What resistance has been encountered? What support has been provided? Discuss community benefits that have resulted. 

Businesses are striving to provide competitive pay and benefit packages to employees, even as the cost of doing so keeps rising. Employers struggle to pass on these additional costs in the price of their products/services or by reducing profits shared with shareholders and employees. This month’s Action Brief looks at how both businesses and employees are dealing with these challenges.

Workplace Implications

The pressure to bolster wages is increasing as fewer workers with the skills needed for the jobs available are giving workers more wage leverage. Layoffs continue in the energy, computer and retail industries and job creation remains very low. Unemployment remains relatively constant as more workers retire or drop out of the labor market without substantial growth in the number of jobs for those that are entering the labor force for the first time or trying to reenter the workforce. Companies are also trying to balance increasing minimum wages in some states, and the new overtime pay rules scheduled to take effect December 1, 2016. These regulations though costly to all employers, will be particularly hard on the retail, restaurant and non-profit industries who have not been able to afford to pay higher wages because of tight profit margins or trying to hold down costs in order to provide more charitable services. Once again, businesses will likely pass these costs on to consumers via higher prices, reductions in profit sharing, or cuts in charitable services provided.

The new overtime regulations will directly affect 4.2 million workers and will cost employers about $1.5 billion a year which equals about 0.03% of total pay in the U.S. Small businesses, likely to feel the most financially burdened if the order does go into effect, are struggling with how to comply in the most cost-effective ways. Some options include:

• Tight restrictions and close monitoring of overtime hours
• Hiring additional staff to relieve overtime burden
• Increasing salaries above the threshold for overtime pay

A main concern of the revision is the potential curbing of opportunities for employees to show extra dedication to their work by putting in extra hours. It may also be troublesome for workers who have earned the exemption status in the past and may now go back to non-exempt status and be required to clock in and out to track their time again.

The passage of the Affordable Care Act brought the possibility of healthcare coverage to millions of Americans where there previously was none. But the cost of insurance premiums has continued to rise substantially, placing a strain on both businesses and employees. Some insurance companies are electing not to provide medical insurance through the government exchanges in some states. Many companies have moved to the provision of high-deductible healthcare plans or eliminated spousal and family coverage to be able to incur the increasing medical costs to provide coverage for their workers. Some companies are providing Consumer Driven Health Plans that give employees more information about the cost and quality of services for each particular provider. This allows greater flexibility in choosing providers and facilities from which to receive services along with more specific information about costs.

Companies have also begun incentivizing employees towards better health as a way of controlling spiraling costs. Financial incentives, other rewards, or lowered insurance premiums are offered to employees in some companies who: 

• Complete personal health-risk surveys
• Take action to improve their health, such as participating in diabetes management or fitness programs
• Provide documentation of improved health biometrics (e.g., lower blood pressure or cholesterol levels)

Some companies use penalties rather than rewards to motivate workers. In Houston, city employees are required to complete a personal health assessment in order to avoid a $25 a month surcharge on medical contributions. Some employers are not hiring, or they are charging more to provide medical coverage to employees and family members who are smokers or users of tobacco.

Programs such as this have advantages and disadvantages. Pros may include healthier, more productive employees, and lower healthcare costs. Cons may include a lack of employee motivation for further improvement beyond the reward, taxes on incentives and rewards, and penalties that can damage employee morale. Some see the programs as potentially discriminatory with rewards or penalties or having to spend time participating in alternative programs based on an individual’s weight or other physical indicators that may not be within their own control.

Employees continue to want the three core benefits of medical coverage, retirement plan contributions and vacation/paid time off. Some businesses are using other creative solutions as they work to provide stronger benefit packages including:

• Onsite fitness facilities, or memberships to offsite fitness clubs
• Paid volunteer opportunities
• Pet-friendly work environments
• Financial counseling

Classroom Implications

Helping students understand costs related to benefits will begin to aid their understanding of some of the tough choices employers face as they design benefit packages. 

Benefits frequently take a backseat to pay when a job offer is considered. Ask students to consider what benefits will be most important to them as they enter the workforce. Challenge them to think about and list reasons why they should evaluate benefits just as carefully as pay. The following article can help students consider the many aspects of benefits and their overall worth as part of a compensation package: https://collegegrad.com/jobsearch/successful-job-offer-negotiation/evaluating-your-benefits-package.

Have students research various company benefit plans. Ask them to compare the advantages and disadvantages of each.