In busines, lawsuit is almost inevitable as long as a company operates. Usually, lawsuits in business result from conflicts during the persuit of the company goals, especially when its objectives are threatened. The companies seek legal intervention to protect their interests and those of their workers. In a legal pursuit, the best procedure is that the complainant (plaintiff) files a case against the offendor (defendant). The defendant is then summoned to appear in court on a given date for the comcement of hearings. In addition, the plaintiff  and defendent have the freedom to hire an experienced lawyer to present them in the entire case.    

Facts of the Selected Lawsuit

In this case, the selected lawsuit is Grouse v. Group Health Plan Incorporation (1981). Grouse was the plaintiff while Group Health Plans Inc., was the defendant. The plaintiff accepted a job offer in the company (defendant) and left the job that he was doing (Bloomberg Law, 2012). After quitting his (plaintiff) previous work, the company (defendant) rescinded the job offer, rendering him jobless. The act made it impossible for the plaintiff to secure a similar job, thus he filed a lawsuit to seek compensation for the loss he suffered due to the action of the company (“Bloomberg Law”, 2012).

Summarry of the Actions that Led to the Lawsuit

Initially, Grouse (plaintiff) was employed as a rental pharmacist and worked at Richter Company. Group Health Plan Inc. (defendant) announced a vacancy for the position of a clinical pharmacist that Grouse applied because of his qualification and experience (“Bloomberg Law”, 2012). He was interviewed then offered the job.  He asked the company to give him an opportunity to issue two weeks’ notice to his employer (Richter), after which he tendered his resignation to the company. In the process, he got another job offer in a different company, but declined it in favor of the position that he had been offered at Group Health (“Bloomberg Law”, 2012). Once he was through with his previous employer and was ready to start this new assignment, he realized that the company (defendant) had employed a different person to fill the position he was initially offered.

Verdict in this Case

The plaintiff was granted compensation for the damages, which he suffered following the company’s decision and action. In this case, the legal principle of ‘promissory estoppel’ was used by the court to compensate the plaintiff for the damages that he suffered by resigning from his current employment, declining another similar offer from a different company and being barred from assuming his new position at Group Health Inc., even before he had an opportunity to start working there (“Bloomberg Law”, 2012). Apparently, the presiding judge understood that Group Health Plan Inc could not accept Grouse to be employed before resigning from his previous job (“Bloomberg Law”, 2012). Since Grouse promptly and appropriately gave notice to the former employer, informed Group Health Plan Inc that he was through and ready to start the new job, he was in order and deserved due consideration for employment in the company. Under these situations, it was unjust for the company to reject its promise, meaning that Grouse deserved due compensation for the damage (Gillette, 2006). 

Risk Management

Some of the administrative practices, which could have been done in terms of risk management to have prevented the events that lead to the lawsuit include adherence to the terms of the contract and promise, upholding ethics and the rule of law (Gillette, 2006). The plaintiff acted with due diligence to inform the previous employer of his intention to quit employment in the company. He went further to serve the company with resignation letter to indicate that he wanted to follow the due procedure of leaving office. There was no law that Group Health Plan Inc., followed when altering its position about the initial job that it had offered the successful applicant. Besides, the company had conducted a competitive interview and called to inform him of the offer, thus did not have justification for shifting its position on the matter.

Ethical Consideration

In this case, the ethical considerations reflected in the laws applicable to this case is based on the code of conduct of Grouse (the plaintiff) and those expressed by Health Group Plan Inc. (the defendant). First, it was ethical for the plaintiff to notify his employer about the intention to quit the company (Markarian, 2006). He compounded this by officially delivering a resignation letter to the former employer as law requires. In addition, he was guided by the intrinsic ethical principle to reject the second job offer that he received, because he had accepted the position at Group Health Plan Inc. This act showed his dedication and commitment to fulfill his desire of serving the company without conflict.

On the other hand, the management of Group Health Plan Inc., did not have any reason for changing the goal post, yet the person had done an interview, passed and accorded the job (Markarian, 2006). Therefore, terminating the offer prior to the applicant assuming the new employment was ill adviced and done in an unethical way. This position could be supported by the fact that the plaintiff had rejected a similar offer in anticipation of the new job, thus suffered double tragedy.

Legal Environment of a bussiness and American Law Sourses

Baisally, legal environment of a business is usually administered by the particular state, country and appropriate international laws. The sources of law that are relevant in this case include Statutotory Law, Common Law (Case Law), Administrative Law, Constitutional Law, and Court Rules (Taylor, 2011). Therefore, the above laws provide the basis of authority for government to regulate business. The civil suits such as simple cases of contract breaches to internationa business mulpractices and bad competition involving complex fraud practices and exposing the competitor’s trade secrets (Taylor, 2011). Apparently, the laws governing such mulpractices ought to apply in this case. Some of the examples of business litigations relevant to this case include breaking contracts, non-compete trade and non-solicitation agreements, misrepresentation and fraud, neglegence, misuse of trade secrets, defamation,tortious interference, and unfair business conspiracy (Taylor, 2011).

Related Case Law

The legal suit could be supported by the case law between Gunderson vs. Professionals, Inc. (2001). In this case, Gunderson (plaintiff) wanted to quit his job against the Alliance of Computer Professionals Inc. (defendant) intent policy to provide job security, thus being able to keep an employee for long (Anderson et al., 2012). The defendant lost because it did not have the obligation retain any of its employees. The employee has the exclusive right to leave employment at will and could not be obliged or forced to serve the company even if he was not comfortable to do so.           

Importance of Management Leverage

Considering this case, the management can leverage knowledge of those sources to prevent similar instances in the future by formulating binding laws and stiffer penalties, which bar business practitioners from engaging in abuse of work agreements (Taylor, 2011). The court’s management system should play its roles actively in taking punitive action that eliminates such practices such as carrying out thorough investigation to ascertain the truth and making sure taht the aggrieved party is duly compentated for damages. In fact, this may act as a deterrent measure to curb similar occurences in future.


In this case, it is recommended that the management might be able to pursue alternate resolutions (outside of court) include the following: binding arbiteration, negotiation, mediated arbiteration, and fact-finding.

 Binding Arbiteration

The plaintiff and the defendant could be given time to discuss and resolve the stalemate out of court,then report their joint resolution for documentation in the court (Alamdari, 2001). This gives the aggrieved parties time to negotiate for faorable terms, which appeal to both parties. Such decisions normally meet the satisfaction of the plaintiff and the defendant without necessitating a court process, because the latter usually takes long.


The aggrieved parties might start a fresh negotiation to amend the terms of reference so that neither of them considers one-self shortchanged (Alamdari, 2001). Since law requires evidence to prove a claim, all the negotiations should be documented and duly signed. Moreover, the negotiation might happen between the two parties only or in the presence of a third party if they choose to have one. This third party must be always non-partial so that the verdict can be satisfactory to the plaintiff and defendant.  

 Mediated Arbiteration

The negotiations outside court should be conducted in the presence of a third party who will act as a witness if the agreement is not honored by either partner (Alamdari, 2001). Indeed, this makes the case easier to determine. Mediated arbiterations usually varry based on the schedule of the plaintiff and defendant. Once the case reaches ‘impasse, the arbiterator is allowed to issue his or her impartial, but binding opinion according to the information that emanates from the two parties.   


In this method, the experts are involved in the solving the dispute after determining the relevant facts, comparing the case to other law suits and rationalize the findings (Alamdari, 2001). At this level, the legal experts involved will be able to find amicable solution to the problem outside court. The method is justifyiable because it presents the findings and oppinions of an impartial person who is capable of delivering a fair verdict. In addition, the method is also used in resolving labour disputes, but the procedure of application varries depending on the case characteristics

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