Business & Professional Ethics 7th Edition by Leonard Brooks,Paul Dunn

Exercise 12

Harold Johns found himself in jail in Germany. He was a vice-president of Baranca Industries Inc., a U.S. firm that constructs and installs factory equipment. Unfortunately he was the highest-ranking Baranca official in Germany while he was in Germany overseeing the installation of some equipment. Much to his surprise, there was a problem with the way a subcontractor paid his workers. Apparently, the way the subcontractor calculated the pay was illegal. In Germany, when a subcontractor does something illegal, it is assumed that the company hiring the subcontractor had knowledge and was also guilty. In addition, the highest-ranking officials with the subcontractor and the firms who hired him are held legally responsible. Therefore Harold and the head of the subcontractor were arrested-as well as the head of the enterprise that owned the factory.
Is this a fair law?