Incentives, Employers, and the Corporate Veil: Should Domestic Corporations Be More Accountable for the Actions of Their Overseas Subsidiaries?

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Derek Flint

The picnic was probably supposed to be an opportunity for the employees of the U.S. parent company to socialize with their counterparts in the Mexican subsidiary. The picnic’s planners likely imagined an afternoon of good, clean fun in Mexico with employees enjoying each other’s company as cold beverages flowed and office formalities slipped away. On this particular afternoon, however, events took a turn for the worse. An executive of the U.S. parent company demanded that 118 female employees of the Mexican subsidiary hold a bikini show, which the executive videotaped.

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