For this assignment our client is the Board of Directors for a regional baby food company, Yummy in the Tummy. Melissa, the CEO of the regional baby food delivery company, made some decisions recently without consulting the Board or shareholders, that the Board is now concerned about. The company has prided itself on only using the highest quality ingredients for the baby food. The company has now started marketing and producing the baby food on a large scale, delivery baby food nationwide. Melissa decided to source the materials from cheaper farms across the country, with some of the materials being switched to lab created or GMO vegetables. Melissa still is advertising the baby food as being of the highest quality, without disclosing the switch in vendors and quality of ingredients, even though the labels still state that the ingredients are of the “highest quality,” are “free-range,” and without GMOs. Melissa was confident that nobody would be able to tell the difference in quality. She did not inform the company’s Board of Directors or shareholders, instead choosing to only disclose that she has changed production issues. The Board of Directors has recently learned of the switch and is concerned.
Your supervising attorney has asked that you draft a memorandum addressing the proposed change. Are there legal issues that the company should be concerned about? What are the issues and why should the company be concerned? What are the ethical issues? What would you recommend the company do moving forward to decrease liability?
Your assignment should be formatted as a memorandum to the firm’s attorneys in the law firm. Your memorandum should be 2-3 pages in length, with proper formatting, spelling and grammar. You should use at least 3 primary legal sources in your memorandum.