Answer 2 questions based on Criminal Law and Employment Law

Instructions:

(1) Read the following facts and answer ALL of the questions below. Please submit an essay answering the questions below with a total word limit of

(2) There is no specific writing format for the essay.

The “Magellan”

James (a former swimming instructor who studied sports medicine in University) is the sole owner and Chief Executive Officer of a new startup company called “Magellan Limited” (“Magellan”). Magellan claims that it has devised a new type of electric sailboat which can run purely on renewable energy. Magellan claims that this is possible due to its technological breakthrough in developing a perpetual motion engine which is powered simply by the movement of the ocean waves rocking the boat.

Accusations of dishonesty

James wants Magellan to go public and is preparing to undertake an initial public offering (“IPO”). Recently, a market research company put out a report on Magellan accusing James of dishonesty in his promotion of Magellan. The accusations include:

· A few months ago, Magellan made a TV commercial demonstrating its prototype electric sailboat the “Magellan I” sailing on the ocean. During the commercial, James’ voice can be heard saying “Here is perpetual motion engine in action”.

The report has discovered that the Magellan I in the commercial did not even have the new engine installed yet and was simply floating on the ocean. The report accuses James of making a dishonest TV Commercial when the Magellan I did not even have an engine installed.

· James had repeatedly said in TV interviews that the new perpetual motion engine was complete and in production. Magellan I had already taken orders for the Magellan I from customers.

It turns out now that Magellan was still in the early research stages of the perpetual motion engine and the technology was still just in the “theoretical” stages. It was not even close to being completed.

James has denied these accusations of dishonesty. He says the he honestly and sincerely believes in the technology and that Magellan will eventually finish the engine and the product will be deliverable one day.

Restrictive Covenant

Mr. Bill Hui (“Bill”) worked as an office cleaner at the offices of Magellan. At the time, Magellan only operated in Hong Kong and had no business operations or customers outside of Hong Kong. Magellan’s main competitor was “Columbus Sailboats Limited” (“Columbus”) which was also developing an electric sailboat based on renewable energy.

Bill’s contract with Magellan included the following clauses:

Contract

This is a contract between Magellan and Bill Hui (“Bill”).

1. Job Duties – Bill agrees to work as an office cleaner for Magellan. Bill’s responsibilities include cleaning the restrooms, vacuuming, dusting, emptying rubbish bins and other general cleaning duties to ensure the office is tidy.

2. Payment – Magellan will pay Bill HK$15,000/month.

3. Restrictive Covenant – Upon termination of employment, the employee (Bill) will not work for any competitor of the employer (Magellan) or work as a cleaner, lawyer, actor, teacher, chef, or professional musician, anywhere in the world for 80 years.

Bill terminated his employment and left Magellan last month. Last month James found out that Bill has been hired as a toilet cleaner by Columbus. James is furious that Bill has breached the Restrictive Covenant and wants to enforce the clause.

Please submit an essay discussing ALL of the questions below with a total word limit of 1,200-1,700 words.

(1) Discuss whether James has promoted Magellan in a dishonest way in the TV Commercial and in the TV Interviews. In your discussion refer to the legal cases on the test for dishonesty which we discussed in class and you may also make comparisons with the THERANOS case study.

(2) Discuss whether the Court is likely to uphold the Restrictive Covenant in Bill’s contract. Consider (i) whether Magellan has a legitimate business interest to protect; and (ii) whether the restrictive convenant in Bill’s contract is reasonable in its scope, duration and geographical range.