Other Legal Environment
Overview
This domain covers government regulation of business: administrative agencies, antitrust, employment, consumer protection, intellectual property, and environmental law. Questions test basic statutory frameworks and the line between lawful and unlawful conduct.
Administrative agencies
Agencies receive power from enabling statutes and exercise legislative (rulemaking), executive (enforcement), and judicial (adjudication) functions. Under the APA, informal rulemaking requires notice and comment; adjudication requires a hearing. Courts review for procedural regularity and statutory authority. Chevron deference was overruled in Loper Bright Enterprises v. Raimondo (2024); courts now exercise independent judgment on statutory meaning while respecting agency expertise.
Antitrust
- Sherman §1 prohibits restraints of trade. Horizontal price fixing, bid rigging, and market allocation are per se illegal; most other restraints get the rule of reason.
- Sherman §2 prohibits monopolization and attempts; a monopoly won by superior skill is lawful, but exclusionary conduct is not.
- Clayton Act addresses price discrimination, tying, exclusive dealing, and mergers whose effect may substantially lessen competition.
- FTC Act §5 prohibits unfair or deceptive acts or practices.
Employment and intellectual property
- Employment is at will unless a contract, statute, or public policy says otherwise.
- Title VII bars discrimination based on race, color, religion, sex, or national origin; ADEA protects workers 40 and older; ADA requires reasonable accommodation; FLSA sets minimum wage and overtime.
- Patents last 20 years from filing; copyrights last for the author's life plus 70 years; trademarks can last indefinitely if used and renewed; trade secrets need no registration.
Worked example
Two competing manufacturers agree at a trade meeting to set a minimum resale price for their products. This is a horizontal agreement among competitors and is per se unlawful under Sherman §1; no market analysis is required, and the parties cannot justify it by claiming it protects dealers.
Traps
- Not every restraint is per se illegal - vertical restraints are usually judged under the rule of reason.
- At-will employment has statutory and public-policy exceptions.
- Copyright protects expression, not ideas; patent protects inventions.
- Validly adopted agency rules can have the force of law.