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Course Overview

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n recent years a range of economic dilemmas have forced their way into our collective consciousness. These range from national and international concerns to personal economic choices. The goal of this course is to provide a sensible, fair economic paradigm. We will compare American and other secular law, contemporary economic and social theory with 3000 years of legal and ethical thought from the corpus of Judaic law pertaining to the above issues.

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Jewish Business Ethics

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Lesson 1:

Insider Trading

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nformation is a valuable commodity. This fact has been made clear by recent stories of high profile prosecutions on insider trading charges. But is it fair to require companies to make information readily available to people who did not expend the time, effort, and money to attain it? Can stealing or misusing information constitute theft of property? How do we set up markets which ensure that risk is apportioned fairly? In this lesson, we will compare and contrast what American law and Jewish law have to say on the subject. Regarding conflicts of interest we will look at what is termed “insider trading.” E.g., S.E.C. v. Rajaratnam, 622 F.3d 159, 169 (2d Cir. 2010); U.S. v. Stewart, 305 F. Supp. 2d 368 (S.D.N.Y. 2004). We will also look at the elements of 15 U.S.C and SEC Rule 10b-5 which prohibit “mak[ing] any untrue statement of a material fact.” E.g. Janus Capital Group v. First Derivative Traders, 131 S. Ct. 2296 (2011). We will study recent developments in this area. E.g. “RECENT DEVELOPMENTS IN THE LAW OF INSIDER TRADING AND MATERIAL NONPUBLIC INFORMATION” - http://www. cov.com/files/Publication/5bd8d976-2faa-490a-86a1ac2265dd9bc4/Presentation/PublicationAttachment/ cbc992cb-aa02-42d1-95a9-b019dc56ede3/Recent%20 Developments%20in%20the%20Law%2 We will also study the concepts of conflicts of interest and unfair advantage in the Judaic Law codes.

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Lesson 2:

Fair Labor Standards

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hile a lucky few go home with millions, many more return home in poverty. What is the best way to solve the problem of the “working poor”? Should employers be obligated to pay employees the minimum hourly income necessary to meet basic needs? This lesson will explore this hotly debated issue from the perspectives of American law, Jewish law, and the moral imperative to “go beyond the letter of the law”—a central pillar of Jewish business ethics. We will examine federal and state laws designed to help the working poor at public expense, including: • the Fair Labor Standards Act of 1938; • the Food Stamp Act of 1964, P.L. 88-525, 78 Stat. 703-709; and • the Earned Income Tax Credit, see http://www.irs. gov/pub/irs-pdf/p596.pdf It has been argued by some that the burden of supporting the working poor should fall on their employers and not the State. Others argue that burdening employers in this manner might cause a reduction in employment and the offshore migration of jobs We will explore directions for future legislation by analyzing studies of city-specific minimum wage legislation. See, e.g., http://www.policyarchive.org/ handle/10207/bitstreams/96130.pdf. We will also suggest a balanced, broad based, set of policy suggestions as well as directives for voluntary individual behavior based on several millennia of Judaic jurisprudence.

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Lesson 3:

Personal Bankruptcy

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n ancient times, when a debtor was not able to repay his debts, he was sold as a slave or thrown into prison. Today, bankruptcy laws protect individuals from this fate. But is it ethical to borrow without repaying? If someone earns the money later in life, should they be obligated to repay their settled debts? This lesson explores the Jewish legal perspective on bankruptcy, emphasizing how we can incorporate secular local laws and customs into Jewish law. Numerous reasons have been given for the bankruptcy statutes. See Dr. Steven Resnicoff ’s compilation, http:// www.jlaw.com/Articles/bankruptcy.html. After examining the conceptual issues, we will explore some of the recent bankruptcy reforms, including S.256. ENR, and their conceptual roots and practical and ethical ramifications. See “Bankruptcy Reform Bites Back,” http://www.businessweek.com/print/magazine/ content/07_44/b4056080.htm?chan=gl We will also look at the ethical dimensions of personal choice in how individuals choose to take advantage of the protections afforded by these laws.

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Lesson 4:

Labor Law

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he controversy over union rights recently has topped U.S. headlines. What does Jewish law have to say about unionization and collective bargaining? Does it matter whether employees are in the public or private sectors? Should a right to strike be permitted, despite the harm it can cause to society? Does the type of industry make a difference? This lesson will present the Talmud’s enlightening spin on unionization,collective bargaining, and strikes and compare it to the present positions of American Law. We will look at the rights of workers to organize under 29 U.S.C. § 157: US Code - Section 157: Right of employees as to organization, collective bargaining, etc. We will look at the extent to which \an employer’s obligation to not interfere with union membership prohibits employers from giving additional wages to employees who leave a union, or who refuse to join. See Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 88 L.Ed. 1007, 64 S.Ct. 830, 834 (1944). We will examine the extent to which unions may control their members as in the case where a union sought to prohibit an employee from resigning his membership in the union (for example, to avoid having to participate in a strike). See, e.g., Pattern Makers’ League of North America v. NLRB, 473 U.S. 95, 87 L.Ed.2d 68, 105 S.Ct. 3064 (1985).

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Lesson 4 Cont. We will look at state “right-to work” legislation and its effects See http://alisondb.legislature.state.al.us/acas/ CodeofAlabama/1975/coatoc.htm and we will study some discussion of the effects of these laws e.g the issues raised in the following articles: JOURNAL OF LABOR RESEARCH Volume 19, Number 3, 445-469, DOI: 10.1007/s12122-9981041-z The determinants and effects of right-to-work laws: A review of the recent literature. Right-to-Work Laws: Liberty, Prosperity, and Quality of Life by Richard Vedder: http://www.cato.org/pubs/journal/cj30n1/ cj30n1-9.pdf: We will also look at classes of employment where United States Law prohibits strikes due to the importance of the function of said employees. E.g. 5 U.S.C. § 7311 : US Code - Section 7311: Loyalty and striking and related casesin particular those related to the PATCO strike; Harris v. Federal Aviation Admin., No. 02-5304. Argued Oct. 10, 2003. -- January 13, 2004 (United States Court of Appeals, District of Columbia Circuit) We will also examine the debate over the The Public Safety Employer-Employee Cooperation Act, http:// republicans.edlabor.house.gov/UploadedFiles/3.10.10_ CRS_R40738.pdf

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Lesson 5:

Freeloading and Squatters Rights

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et’s be honest: who isn’t looking for a bargain? On the other hand, how often do we question the ethics of our deal-seeking? Can we move to more expensive vacant seats at a ball-game? Is there anything wrong with asking about a product when we have little or no intention of buying it at that store? This lesson addresses scenarios relating to the average market purchases that most of us face daily. We will also look at the question of utilizing unused real property, known as “squatting.” E.g., Joseph v. Whitcombe, 279 A.D.2d 122, 719 N.Y.S.2d 44 (2001). We will also look at the adverse-possession laws of Pennsylvania. E.g. Flannery v. Stump, 2001 PA Super 307, 786 A. 2d 255 (Pa: Super. Ct. 2001).

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Lesson 6:

Excessive Compensation and other Problems at the Top

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ecently, much public anger has been focused on ever increasing salaries and bonuses to the executives of public corporations and financial institutions, as well as unethical and often illegal profiting from behavior that conflicts with the welfare of shareholders and the public. Is it morally wrong to seek extravagance and whatever compensation the market will bear? Should corporate compensation be regulated? In response to these issues the SEC has proposed rule 956 the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which requires financial institutions with assets of more than $1 billion to annually report the structure of their incentive compensation arrangements to federal regulator to determine whether the structure provides “excessive compensation, fees, or benefits” or “could lead to material financial loss” to the institution” Additional obligations are placed on institutions that manage more than $50 Billion in assets. It has also been suggested that future rules actually limiting executive compensation would be found constitutional, See Spring, 2011 113 W. Va. L. Rev. 931 “PROTECTING YOUR RIGHTS, BUT NOT YOUR PAYCHECK: HOW EXECUTIVE COMPENSATION REGULATION PASSES CONSTITUTIONAL MUSTER.”

In the UK under sec. 439 of the Companies Act of 2006. shareholders have a voice in executive compensation. See http://www.legislation.gov.uk/ukpga/2006/46/ section/439.

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JLI Money Matters: Jewish Business Ethics Course