Every society is bound by a set of rules and principles that regulate the actions of the people within the society. These rules and principles, known as law, are integral for a society to run properly and help maintain peace and prosperity among its people. Each state within the United States operates under its own set of laws, but all the states are bound together by federal laws laid out in the U.
S. Constitution. The U. S.
Constitution takes precedent over any state law and contains specific Articles, amendments and clauses that have regulations that can affect businesses.The Constitution’s Role in Business One of the main functions of the Constitution is to identify the three branches of government and provide each very specific enumerated power. The three branches are the legislative branch which is made up of the House of Representatives and the Senate, collectively known as Congress, the executive branch which consists of the president and vice president, and the judicial branch, which consists of all federal courts, mainly the U. S. Supreme Court.
Though all branches play some role in the regulation of business functions, it is the legislative branch that has the most oversight over commerce.The Constitution consists of a Commerce Clause that gives Congress power over the regulation of the channels of interstate commerce, such as highways and railways, the instrumentalities of interstate commerce, such as the vehicle that are used in shipping, the articles being moved in interstate commerce, and any activity that has substantial economic effect on interstate commerce (Melvin, 2011). This is specifically important in my organization since we conduct a lot of interstate business. We are a third party company that contracts with major health plans nationwide.We then in turn hire subcontractors that conduct the actual transportation. We follow the protocols set in place by the health plan to schedule transportation request for the health plan members and then relay those requests to the transportation providers.
Since we conduct business in all fifty states, we have to understand the laws in each state as it relates to transportation. For example, we require specific documents and training certificates for every driver within a specific company in order for that company to be eligible to contract with us. However, Michigan, for example, has very trict rules that a driver must follow in order to receive their taxi-driver license.These rules are much stricter than any we have in place and therefore a valid taxi-driver license in Michigan trumps any internal standards.
It is very important for businesses like mine to have a complete understanding of state laws in every state in which they perform business, but it is also important for these businesses to understand federal law as well. The U. S. Constitution is the collective law of all states and trumps any state law in direct conflict. This is best illustrated in Cipollone v. Liggett Group, Inc.
et al.In this case, Cipollene sued the Liggett Group and other cigarette manufacturers stating false advertising caused his mother’s death by misrepresenting the hazards of smoking (Melvin, 2011). The U. S Supreme Court ruled that the state law that Cipollene was basing his case was preempted by federal laws that regulate tobacco advertising. This case is relevant for anyone to know because it illustrates exactly how a court can overrule any state law that conflicts a federal law, making it imperative for people and businesses to review related federal laws before entering into litigation based on a state law.The Amendments in Business In addition to the power Congress has to regulate commerce as laid out in the Commerce Clause, several amendments within the Constitution also play an important role in businesses.
In general, constitutional amendments do not pertain to businesses, but there are some exceptions. The First Amendment is best known for providing the freedom of speech which has only recently been extended to businesses allowing commercial speech to have partial First Amendment protection as long as the speech is truthful (Melvin, 2011).The Federal Trade Commission (FTD) has the right to regulate speech in advertisements they consider deceptive, specifically in relation to quantity, quality, effect, and price (Rosden & Rosden, 2013). Other Amendments also have power in businesses. The Fifth Amendment protects an individual, including those in an organization under litigation, from being a witness against him or herself.
The Fourteenth Amendment also pertains to business because it makes the Bill of Rights applicable in all states. Conclusion The U. S. Constitution and its amendments do not directly protect businesses and other organizations.
However, there are aspects of these laws that do affect businesses. It is important for any manager within any company, regardless of size or number of employees, to have a fundamental understanding of the law. Not only should a business remain up to date on state laws in any state in which they perform business, but also all federal laws and regulations that may have an effect on business functions. By understanding the importance of law in the business environment, a company can decrease its chances of being involved in any litigation or, if it is unavoidable, to increase its chances of a positive outcome.
