Apple Inc. so far is listed as the world's most admired company. To millions of mobile consumers, it is a brand that embodies quality, prestige and innovation. Because Apple’s brand is being valued at $153 billion, it is the most valuable brand in the globally. However, in all its years of being successful, Apple Inc. has not been without its various challenges. Apple has been facing several ethical and legal issues in its operations. Indeed these issues are not to be taken lightly as they may have far-reaching impacts on the future success of Apple. In other words, the fame that Apple has had so far could be severely damaged as a result of misconducts or failure to effectively deal with these issues.
Recently, Apple has been ordered to pay a sum amounting to $506 million to the patent licensing arm of Wisconsin-Madison University as part of the damages for the lawsuit that the university won back in October 2015 in addition to Apple’s continued infringement of the patent till its expiry in 2016. The lawsuit that was filled back in 2014 by the Wisconsin Alumni Research Foundation against Apple accused the company of infringement on a patent that was initially granted in 1998 to improve the efficiency of processors. As it was found, Apple processors, mainly the A7, A8 and A8X processors violated the patent. However, this lawsuit cannot be compared to the legal battle that Apple has with chipmaker Qualcomm that has the possibility of leading to an iPhone ban in the U.S. The issue stems from the royalties that Qualcomm charges on all modern smartphones since they all use technology that was developed by the chipmaker. The legal battle between them arises from a lawsuit that Apple filed against Qualcomm alleging that the chipmaker was overcharging the company billions of dollars. To retaliate, Qualcomm responded with a patent infringement lawsuit against Apple.
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The most controversial issue ever to face Apple is the issue of severe employee abuse that occurred in 2011 in China. During this time, Apple was accused of treating their employees inhumanly and like machines thereby prompting an investigation into the issue. What investigators found was more shocking than initially anticipated. For Apple to cut their costs and thus increases their profit margins, they hired approximately 500,000 employees who were distributed in two plants in Shenzhen and Chengdu in China (Wopschall, 2013) . Employees were made to work over extra time and before being hired, they were made to sign anti-suicide contracts and were paid wages less than the $17-$22 that is approved by the law. Moreover, they were made to work in poor working conditions. Additionally, they built employees not so spacious dorms in which they assigned 24 workers each, who were called at any time to work (Wopschall, 2013) . More than can be imagined, anti-suicide nets were installed in the dorm windows to catch workers and return them to work. These unethical workplace events that occurred in southern China are so upsetting and disturbing to even think of.
Specific Laws that Apply to Apple Inc.
Fair Labor Standards Act (FLSA)
Apple Inc. violated FLSA that predominantly prescribes the standards needed for overtime pay and wages. The act as administered by the Wage and Hour Division specifies that employers must compensate employees at least the federal minimum earnings in addition to extra hour fees amounting to one-and-one-half times the normal wage (United States Department of Labor) . Apple acted in contrary to this law by paying workers less than the minimum wage required and nothing for the extra working hours that they were subjected to work.
Occupational Safety and Health (OSH) Act
According to the events surrounding the investigation into Apple's treatment of employees, it can be seen that Apple violated the law. The law which as administered by the Occupational Safety and Health Administration (OSHA) indicates that employers must observe the protocols, and safety and health standards as disseminated by OSHA (United States Department of Labor) . OSH Act specifies that employers must arrange for their workers to have work and workplaces that are free from harmful hazards.
Patent laws
The federal law governs all Patents in the United States under 35 U.S.C (United States Code). According to section 271 of these laws, a patent is infringed when a business entity makes, uses, offers to sell or sells a product or service that uses a patented invention (Thomson Reuters, 2018) . In the legal battle between Apple and Wisconsin, the jury spe cifically found that Apple installed technology owned by the University of Wisconsin-Madison's licensing arm in their products without their consent. The evidence was that chips were discovered in many of the admired devices of Apple. Therefore, the United States found Apple liable for patent infringement according to section 271 of the 35 U.S.C.
Application of General Legal Topics
Bankruptcy
According to chapter 11, a case predominantly begins when a debtor files a petition with the bankruptcy court that serves in its area of location. A debtor, therefore, can present a voluntary petition that adheres to the Form 1 format of the official forms as prescribed by the Judicial Conference on the U.S. unless stated by the court, the debtor has to file schedules of assets and liabilities, current expenditures and income, statement of financial affairs, unexpired leases, and executory contracts (United States Courts) . Apple is facing a lawsuit against Wisconsin Research University and is required to pay $506 million for damages caused. However, the amount of money involved in the trial can significantly impact Apple's business operations if they agree to settle. Apple can, therefore, opt to file for bankruptcy and if found to qualify for Chapter 7, the company is liable to discharge the underlying debt that it owes Wisconsin as a basis for the lawsuit. Therefore, the automatic stay for the trial will be invoked thereby stopping the suit for the remaining period. If Apple's bankruptcy petition succeeds, the amount it owes Wisconsin will be dismissed since the debt it owes will no longer be legally enforceable.
Contract Enforcement
In the business market, firms often enter into contracts with one another to conduct efficient business operations. Therefore, the government is obligated to enforce these contracts, and if one party violates any agreement as stipulated in the contract, the other party will turn to the legal system for enforcement (Greechie, 2018) . The case between Apple and Wisconsin indicates that Apple went against the agreement they had and used the processors in some of their products without the consent of Wisconsin Research University. Therefore to ensure that economic and social progress was maintained, the judicial system had to enforce the contract for Apple to pay for the damages it caused. These two factors are essential for the development of economies and cannot be achieved without respecting the rule of law and protection of rights. Moreover, they require a well-functioning judiciary to resolve cases arising between business entities (Greechie, 2018) . The efficiency of the Jury in solving the case is a factor that improves the business climate, foster innovation secures tax revenues and attracts foreign direct investments.
Employee Protection
Both federal and state agencies must protect the rights of employees. Both OSHA and EEOC are there to ensure that employee rights are upheld and that employers do not abuse their powers (Greechie, 2018) . Apple could have damaged the economic stability of the country by mistreating its employees and going against the employment and labor laws. Labor laws are crucial for a healthy economy since they preserve the right of the employees to compensation that can be spent and in turn, invested. Healthy businesses are predominantly marked by periods of economic growths with employees who can earn enough to participate in the economy as consumers.
How Philosophy of Milton Friedman may have influenced the Executives of Apple
Milton Friedman was a firm and forceful economist who lobbied for free markets and individual choice. He stated that "If you put the government in charge of the Sahara Desert, in five years there'd be a shortage of sand." (Prevos & Watson, 2009) . He strongly emphasized that the government should have minimal oversight of the economy by arguing that economic freedom was a necessity to achieve political independence. Therefore, in a free enterprise, executives are employees of the business owners. They have direct responsibilities towards their employers and have to conduct business according to their employer's desires. Thus they have to make much profit as possible while conforming to the basic rules of society as embodied in the law and ethical customs. In other words, executives can engage in activities designed to increases the profits of the corporations they work for so long as they participate in open and free competition (Prevos & Watson, 2009) . According to the executives at Apple, they were not violating any rules as the decisions they had made were primarily meant to gain as many profits as possible for their employers. In hiring employees and making them work overtime with less pay, they were cutting costs to increase their profit margins, while in using processors in their phone products against the consent of Wisconsin, they were offering the best quality products to attract more consumers and thus increase their profits from increased sales.
Ethical Framework
Consequentialist Theory
In business operations, this theory often represents a moral framework that discovers an ethical course of action basing on the results. Before deciding on a decision, the desired outcomes are considered pragmatically, and once the outcome is reached, the framework will reveal the potential actions that will be taken to the end (Ohio University, 2017) . Executives therefore predominantly chose an action plan that will produce the greater good for the majority. In other words, it the action plan selected maximizes positive consequences for some while minimizing adverse effects for other. The result mainly justifies the means through which the happiness of the minority is compromised for the overall benefit of the majority (Ohio University, 2017) . Thus the executives at Apple had made their decisions with the intention of achieving a result of satisfying their consumers who are the majority in this case. In hiring workers to produce large quantities of iPhones by working over extra times, their focus was on the large number of consumers who were anticipating buying the first Apple phones released into the market (Duhigg & Barboza, 2012) . Consequently, in installing the processors in Apple phones without consent from Wisconsin, the executives were focusing on the quality of the phones that they released to consumers. To the executives, the decisions that they made regarding the quality and quantity of iPhones produced was for the benefit of consumers as they have the power to influence Apples financial standing and longevity.
Today's business environment is bombarded continuously with several legal and ethical challenges that if not resolved, can significantly impact various business entities. The situation with Apple involving employee mistreatment and the lawsuit filed against them by the Wisconsin Alumni Research Center are some of the challenges that managers and businesses need to be aware of. Therefore, from this situation, managers and companies can learn that when conducting their business operations, it is morally wrong to focus on increasing profits, improving quality and expanding the number of products while neglecting the welfare of workers and other individuals who make possible their business objectives. Employees predominantly act as consumers of products and have the powers to determine the success or failure of various businesses. Without consumers, companies cannot thrive. Therefore, managers and firms have a responsibility to ensure that both employees and developers rights are adhered to when conducting their business operations for maintenance of economic stability and healthy business environments.
References
Duhigg, C., & Barboza, D. (2012, January 25). In China, Human Costs Are Built Into an iPad. Retrieved August 2018, from The New York Times: https://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-hu
Greechie, S. (2018, June 30). Role of Government in Business. Retrieved August 2018, from Chron: https://smallbusiness.chron.com/role-government-business-803.html
Ohio University. (2017). 3 Frameworks for Ethical Decision-Making. Retrieved August 2018, from Online Masters: https://onlinemasters.ohio.edu/blog/3-frameworks-for-ethical-decision-making/
Prevos, P., & Watson, I. (2009, July 14). Milton Friedman on Corporate Social Responsibility. Retrieved August 2018, from The Lucid Manager: https://lucidmanager.org/milton-friedman-corporate-social-responsibility/
Thomson Reuters. (2018). Patent Law You Can Use, Part 1. Retrieved August 2018, from FindLaw: https://corporate.findlaw.com/intellectual-property/patent-law-you-can-use-part-1.html
United States Courts. (n.d.). Chapter 11 - Bankruptcy Basics. Retrieved August 2018, from United States Courts: http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics
United States Department of Labor. (n.d.). Summary of the Major Laws of the Department of Labor. Retrieved August 2018, from U.S. Department of Labor: https://www.dol.gov/general/aboutdol/majorlaws
Wopschall, C. (2013, April 11). Apple Inc.: Severe Employee Abuse (2011). Retrieved August 2018, from Business Ethics Cases: http://businessethicscases.blogspot.com/2013/04/apple-inc-severe-employee-abuse-2011.html
