BLAW test 3

What is Product liability?

- area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause

What is Comparative Negligence?

- both plaintiff and defendant are negligent - Fairer approach - Damages are awarded in proportion to fault - If the plaintiff was partially at fault, may still recover damages

What is Encroachment?

- exclusive/nonexclusive territory of franchisee, internet sales of franchisor, other franchisees, franchisors right to deliver goods through other outlets owned by franchisor or other franchisees (Scheck v Burger King) - Burger King opened up a store within 2 miles of Scheck's Burger King. They argued they never agreed to a non-compete. Court brought up the good faith and fair dealing idea in contracts. Although there was no exclusive territory agreement, it was ruled that Burger King had breached the franchis agreement.

What is Implied Warranty of Merchantability?

- implied in every contract for the sale of goods where seller is a merchant for the type of goods sold - Also applies to service of food and drink to eat in or takeout *Bundle of promises in UCC§2-314 * : - Goods are fit for ordinary purpose for which they are sold - Adequately contained, packaged and labeled - Conform to promises made on the container or label

What is formation regarding sole proprietorships?

- no filling required with the Secretary of State's Office; just start conducting business - Examples: lemonade stand, selling a product on Facebook

what is a full warranty?

- obligation of seller to fix or replace the defective product within a reasonable time without cost to the buyer - No unreasonable burden on consumer seeking warranty service - Don't pay cost of shipping - If weight is more than 35 pounds, cannot require shipping of product - Part must be easy to remove to require shipping to seller - No requirement of warranty registration card completion - If any of the above ARE required, it is a limited warranty - Full warranty runs with the product - Does not cover normal wear and tear - Can be for life of product or for a limited time

Equal Pay Act

- prohibits employers from paying employees of one gender less than another gender for equal work that requires substantially equal skill, effort, and responsibility and are performed under similar working conditions ● Prohibits pay variation based solely on gender ● 4 exceptions where variation of wages is allowed: ○ Seniority systems ○ Merit system (how well they do the job) ○ When earnings are measured by quantity or quality of output ○ Difference is based on any factor other than gender Age Discrimination in Employment Act (ADEA) ● prohibits discrimination against persons over 40 years of age ○ Failure to hire because of age ○ Discharge of employees because of age

Whistleblower laws

- protect employees who disclose employer activity that endangers the public, breaks the law, or is discriminatory - Uno Pizza: Gerald Adams works a night shift in the kitchen. He notices that there is an awful smelling liquid coming up from the drain. He complained he was feeling sick and contacted the department of health because no one was doing anything. His manager accused him of stealing a t-shirt and terminated him because of it. It went to court. Adams said he was unlawfully terminated and it was found he was wrongfully terminated

What is Defamation?

- the act of making untrue statements about another which damages their reputations - Slander: spoken or oral defamations - Libel defamatory statement is printed or broadcast over media - Competing Interests of Defamation Law- unhindered discourse important in a free society without fear of litigation; can ruin a person's reputation telling lies

Opposition: an employee's opposition activities may include

- threatening to file a charge or other formal complaint alleging discrimination - complaining to anyone about alleged discrimination against oneself or others - refusing to obey an order because of a reasonable belief that it is discriminatory - requesting reasonable [disability] accommodation or religious accommodation

what is Shopkeeper's Tort?

- used by stores often - Shopkeeper's Privilege: store owner's defense to False Imprisonment - Permits detention of suspected shoplifter based on reasonable suspicion for a reasonable time without liability for false imprisonment - Applies even if store owner is wrong about suspicion - Act based on reasonable suspicion - Treat alleged shoplifter in reasonable manner

What is Warranty of Title under Implied Warranties of Merchant Sellers?

- very seller makes an implied warranty that the seller's title is "good, and its transfer rightful" and the buyer shall not be subjected to unreasonable litigation - Warranty may be disclaimed by words "there is no warranty" or by circumstance UCC §2-312(2) - No warranty of title conveyed by sheriff's sale, auctioneer, estate sale, creditor sale of secured goods UCC §2-312(2)

Participation: lause is construed broadly & applies:

- when individuals file formal discrimination charges with the EEOC or other enforcement agencies - when they communicate allegations and evidence to these agencies - when they assist or participate in agency investigations and court proceedings - The participation clause provides broader protection than the opposition clause.Participation Clause protects individuals from termination - Opposition Clause does not- employee may be terminated if their complaint is not made in good faith.

What are the Theories in Law for Product Liability?

1) Express warranty 2) Implied warranty 3) Negligence 4) Fraud 5) Strict tort liability - Caveat emptor applied in the past - "buyer beware" - Warranty liability developed to protect buyers against economic loss and personal injury - Warranty is a promise, express or implied, about the nature, quality, or performance of goods ... found in the - UCC= Uniform Commercial Code

Invasion of Privacy Torts

1) Public Disclosure of Private Facts: - The disclosed fact was a private fact - There was public disclosure of the private fact - Public disclosure of private facts is offensive to a reasonable person 2) Intrusion into Private Affairs - Secretly plant a microphone or video where privacy is expected 3) Misappropriation of name, image, or likeness for commercial advantage (Right of Publicity) a) Misappropriation of plaintiff's name or likeness for the value associated with it b) identification of the plaintiff in the publication c) An advantage or benefit to the defendant.

Elements of Defamation Claim:

1) Published: Means a 3rd party heard or saw the statement- thru social media, tv, radio, gossip, speeches, loud conversation 2) False: must be false statement communicated as fact; opinions do not count 3) Injurious: one's reputation suffered harm because of the false statement 4) Unprivileged: witness testimony in court/deposition; lawmakers; media have a qualified privilege

What are the SC business entities?

1) Sole Proprietorship 2) Partnerships - General Partnership - Limited Partnership - Limited Liability Partnership 3) Corporations - C Corporation - S Corporation - Professional Corporation - Statutory Close Corporation - Nonprofit Corporation 4) Limited Liability Company

What are the three things that must exist for it to be a franchise?

1) Trademark: the business is substantially associated with the franchisor's trademark or business name. Franchisee is given the right to sell goods and services using the franchisor's trademark, logo, trade name or other commercial symbol. 2) Significant Control or Assistance: provided in the operation of the business; training programs, site appearance production techniques, promotional campaigns, operations manual, uniforms 3) Require payment: franchisee is required franchisor at least $500 before opening; ongoing royalties, other fees required for right to operate the business- training fees, franchise fees, payments for services/ sales of products.

Product Liability Cause of Action Example:

1) UCC Implied Warranty of Merchantability 2) UCC Implied Warranty of Fitness for a Particular Purpose 3) Violation of Colorado Consumer Protection statute a. Deceptive Trade Practices, False Advertising 4) Strict Liability

what are the considerations when choosing a business entity?

1) liability protection 2) taxation 3) management and operations 4) raising capital

Business Opportunity Laws:

1. Similar to franchise but smaller scale type business 2. Some disclosure and registration requirements 3. Federal registered trademark- usually exempt from Bus. Op. compliance

What is a Tort?

A wrongful act that injures or interferes with an individual's person or property

Stefan is enjoying a bowl of French Onion Soup at a Charleston restaurant and comes across a splinter which causes intense pain and bleeding. Which product liability law claim is most applicable here? a) None because there was a conspicuous disclaimer on the menu b) Strict product liability c) Breach of implied warranty of fitness for a particular purpose d) Breach of implied warranty of merchantability

Breach of implied warranty of merchantability

What is a Post sale Disclaimer?

Disclaimer made after sale will not disclaim warranties in effect at time of the sale

Overtime Pay:

Employee must be paid one and a half times their regular rate for hours worked over 40 in a given workweek

EEO Law:

Employer Liability: for workplace harassment under Title VII (basis of race, color, religion, gender & national origin)

Common Hot Topic Issues:

Encroachment, Systemwide Changes, Vicarious Liability, Trade Secrets, Trademark Use/ Brand, Transfer of Ownership

In a product liability claim brought under a strict liability theory, which element below will NOT make a difference in the outcome under this theory? a) a defect in the product was unreasonably dangerous and caused harm to the plaintiff b) there was an alternative design available which would have been safer c) inadequate warnings of danger were provided to the consumer; failure to warn d) Failure to exercise reasonable care

Failure to exercise reasonable care

A seller cannot be held liable for breach of an express warranty if the seller honestly believed that the statement was true. ('No Sugar Added' on label of canned fruit). True or False

False

What falls under federal laws, state laws, and South Carolina laws regarding franchise?

Federal laws: - Federal Trade Commission - FTC Franchise Rule State Laws: - State laws vary - Franchisor must register in each state where franchise is offered South Carolina : - Business Opportunity Act - SC Business Opportunity Sales Act (SC Code Title 39)

basics and formation of Corporations:

Formation: - File Articles of Incorporation - File CL1 or Annual Report of Corporation - SC Attorney must sign - Formalities must be followed Basics: - Owners are Shareholders - They elect directors to oversee big operations and hire officers - Officers manage daily operations - Profits are called dividends which are distributed to the shareholders - Issue stock - Adopt by laws - Hold annual director & SH meetings - Keep minutes of meetings - Annual reports filed with state

What is formation regarding limited partnerships?

Formation: file a certificate with the Secretary of State's office, pay filing fee must have at least one limited partner and at least one general partner

Limited Liability Partnership:

Formation: file a certificate with the Secretary of State, pay filing fee Example: doctors, lawfirms - Provides each partner some limited liability - Liability extends up to the amount of their investment - Each partner, usually a professional, insulated from others' negligence, malpractice, & misconduct - Limits malpractice claims against uninvolved partners Pass through taxation

What are the types of Torts?

Intentional Torts, Negligence, Strict Liability

Disparate Treatment:

Intentional: Organization's practices, policies or procedures intentionally eliminate a protected group based on race, color, religion, sex, or national origin

To avoid exposure to a defamation lawsuit, an employer in South Carolina should comply with ___________________ when providing job references about a current or past employee.

Job Reference Immunity Statute

Pros and Cons of a Limited Liability Company:

Pros: - Broad tax treatment choices - Single member: taxed as sole proprietor or corporation - Multi-member: taxed as partnership or corporation - No personal liability for Members - Flexible management & control - No required formalities (annual meeting, minutes of meetings, etc) - Less costly to form and operate - No restriction on who can own (Members) - No restriction on how many owners (Members) Cons: - Unpredictable legal outcomes - Newer form of entity - Case law not well established regarding disputes between members, extent of limited liability protection - Venture Capital investors prefer predictable legal outcomes - Flexible management provides less certainty to investors who prefer corporate reliability

What are the pros and cons of general Partnerships?

Pros: - No fees or filing required - Partners each have control over decisions - Share profits - Each has right to use partnership property Cons: - Unlimited personal liability for obligations of the business - Often unintentional formation, easily mismanaged - Each partner responsible for wrongful acts or business - debts incurred by other partners - Uniform Partnership Act applies - *not advisable form of business entity

What are the pros and cons of Sole Proprietorships?

Pros: - No formal process or state law governing operation - Easy to form, cost savings - Least complicated to operate - No control issues - No separate bank account or tax filing Cons: - Unlimited personal liability - Owner's personal assets at risk - Owner is liable for all debts and obligations - Future growth limited, typically no business plan

Pros/Cons of an S Corporation

Pros: - No personal liability for shareholders - Pass through taxation; profits are only taxed once - Usually better than C Corp. for small businesses because taxes are less Cons: - Only ONE class of stock; no preferred, class A, or class B (voting, nonvoting, employee incentives) - Up to 100 shareholders - Shareholders must be US Citizens or Residents and no companies may own shares - Heavy administrative requirements Not attractive to investors

Pros/Cons of a C Corporation

Pros: - No personal liability for shareholders - Venture Capital firms prefer - Multiple classes of stock allowed (preferred, common, class A, class B, employee incentives) - Can sell stock globally; no restriction on ownership of stock - Legal precedence established - Choice for company 'going public' Cons: - Double Taxation - Profits of Corp. are taxed - After tax profits distributed to shareholders are taxed again on their personal tax returns - More administrative requirements - Can't deduct business losses on personal tax return

Pros and Cons of Corporations:

Pros: - Offer great liability protection - Case law is well established - Sophisticated form of governance investors prefer - Legal entity separate from owners/shareholders Cons: - Most complex entity form - Onerous formalities - Articles must be signed by attorney - Bylaws required, certain meetings required - Most costly entity type to form and operate

Pros and Cons of Limited Liability Partnership:

Pros: - Offers some liability protection - No limited/general partners - All partners 'equal' - Good for professionals owning a practice together Cons: - Personal liability not limited completely for obligations of the business - Yearly renewal required

Referencing the question above, what is the key to protection for an employer when providing a written reference about a current or past employee?

Provide the employee with access to the same information

The Employment Relationship:

Pursuant to an express or implied agreement, the employee undertakes to do work under the control and direction of the employer.

Minors Age 14 and 15:

Several restrictions apply: - School day? No more than 3 hours - Not school day? No more than 8 hours - School in session? No more than 18 hours a week - School not in session? Not more than 40 hours week - Hours from 7AM to 7PM, but during break can work to 9PM

Other Forms Of Entities:

Statutory Close Corporation, Nonprofit Corporations, Professional Corporation,

EEO Law: Protected Classes Under Title VII:

Title VII prohibits discrimination on the basis of race, color, religion, gender & national origin as well as retaliation against employees who oppose unlawful discrimination or participate in Title VII proceedings.

Equal Employment Opportunity Law Title VII of the Civil Rights Act of 1964: Title VII

Title VII: prohibits discrimination on the basis of race, color, religion, gender & national origin as well as retaliation against employees who oppose unlawful discrimination or participate in Title VII proceedings.

Monitoring Employee Phone Calls:

Two exceptions: - Ordinary course of business exception allows employers to monitor business phone calls - Prior employee consent obtained (How?)

Payment Upon Termination

Upon discharge, employee must be paid all wages due within 48 hours or by the next regular payday (within 30 days) Here 'wages' includes regular pay, vacation pay, sick leave payments, all commissions due

What is Intentional Infliction of Emotional Distress?

conduct that exceeds bounds of decency and produces mental anguish in the victim

Historically, under the concept of _________, only the original parties to a sales purchase could sue for harm caused by defective products.

privity of contract

The implied warranty of merchantability guarantees that the:

the product is fit for the ordinary purposes for which it is sold.

At every sale, the seller makes an implied warranty that the:

the seller's title is good

The Uniformed Services Employment and Re-employment Rights Act:

to encourage non career service, minimize disruption to Reservists' civilian life, promote prompt reemployment of Reservists upon return from military leave

Which one of the following statements made by the seller do not likely constitute an express warranty? a) "This is 100% wool." b) "This car has a 120 horse power engine." c) "This looks beautiful on you." d) "This is a 3.2 liter rotary engine."

"This looks beautiful on you."

What is the terminology regarding franchise?

*Franchisor* : party granting another the right to use its business model (ie McDonalds) *Franchisee* : one who is granted the right to sell the goods or operate the service of another's business model (ie individual owners of the individual franchises) *Franchise* : arrangement where one party (franchisor) grants another party (franchisee) the right to use its trademark and business model to sell a good or service according to certain specifications *Franchise Agreement* : the legal contract that sets forth the details describing the rights and responsibilities of the Franchisor and Franchisee

What is Particular Language?

- "Seller accepts no responsibility for quality except as otherwise provided" - As-is - "Seller accepts no responsibility the goods will be fit for a particular purpose"

Seller Creates Implied Warranty of Fitness for a Particular Purpose when....

- "Seller has reason to know the particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select ... suitable goods, there is ... an implied warranty that the goods shall be fit for such purpose" - Buyer intends to use goods for a particular purpose, & not as the goods are ordinarily intended to be used - Seller states the goods are fit for buyer's purpose and buyer relies on seller's skill to select the suitable goods - Seller knows of buyer's particular purpose for the goods and that the buyer is relying on their judgment

What is Warranty Against Encumbrances under Implied Warranties of Merchant Sellers?

- "the goods shall be delivered free from any security interest or other lien or encumbrance" - warranty there are no liens or encumbrances to goods except those noted by the seller

What is intentional tort?

- A Civil Wrong that results from Intentional Conduct - Assault: Intentionally putting another person in reasonable apprehension of an imminent harmful or offensive contact - Battery:the intentional harmful or offensive contact with another's person without that person's consent - False Imprisonment

Race and Color:

- A primary purpose of Title VII is to provide fair employment protections to black Americans - The Act does apply to all 4 major racial groups: Whites, Blacks, Asian-Pacific, Native America *What about Hispanic?* - Courts have treated Hispanic as a protected class without explaining whether the protection is based on race or national origin

What is Implied Warranty?

- A warranty that is not expressly made by the seller but is implied by law - Express warranties are stated verbally or in wirting by the seller and form the basis of the buying decision - Cannot exist alone, no express warranty - Can exist concurrently with an express warranty - interpreted as consistent with each other if possible - or express warranty will prevail over implied warranty - exception, Implied Warranty of Fitness for a Particular Purpose

Testing and Educational Requirements:

- Act allows use of professionally developed ability tests not designed to discriminate - Must be job related; must bear a relationship to performance of the job; show capability to perform the job - Validity Generalization- tests that are court approved in one state will be valid in another state - Google job for computational linguist : Experience with scripting languages working in a Linux environment. Experience with Python, C++, or other - programming languages - Job for a language tutor - Firefighter's test

Social Security:

- Administered by Social Security AdministrationFirst became law in 1935 under President Franklin Roosevelt - Funded primarily through payroll taxes called FICA (Federal Insurance Contributions Act tax) *Provides Employees Insurance Protection For:* - Retirement benefits - Disability benefits - Life insurance benefits - Health insurance (Medicare for those over age 65) - A federal program of aid for the aged, blind and disabled

C Corporation vs S Corporation

- All corporations begin as C Corporations - Elect S Corporation status →File a form with IRS

Online Issues with Defamation

- Anonymous Posters: 1st Amendment protects anonymous speech - Courts must balance rights of anonymous posters with the right of those harmed by such speech to seek legal redress and compensation - Plaintiff must provide evidence of a credible claim of defamation before a court will compel disclosure of anon. poster - Anonymous poster must be given chance to defend themselves before identity is revealed

What is Limited Warranty?

- Any warranty that does not provide complete protection of a full warranty. - If there is any cost of repair to consumer - Only part of product is covered - Only covers 1st buyer, doesn't 'run' with product Must be conspicuously described

Tangible Employment Action:

- Applies in situations where a supervisor performs an official act of the company (discharge, demotion, undesirable reassignment) against a subordinate employee because of the employee's refusal to submit to supervisor's demand for sexual favors - Employer of supervisor is always vicariously liable by existence of agency relationship - Employer has no defense even if an anti-harassment policy is in place

Sales as per Buyer's Specifications:

- Buyer provides exact specifications for manufacture or preparation of goods; same warranties arise as per any sale made by this seller - But No Warranty of Fitness for a Particular Purpose is proper - Buyer is buying per their own decision, not in reliance of seller's skill

Minors Age 16 and 17:

- Can be hired for any job not designated as hazardous -Coal mining, operating a power-driven machine, - Roofing, excavation, meat packing - Driving a vehicle & being an outside helper - No limit to amount of hours

Theories of Discrimination:

- Created by the Supreme Court - Law under the Civil Rights Act

Job References:

- Defamation issues- potential claim for defamation may stem if an employer provides another employer with: - Reasons for termination of the employee - Negative evaluation of work habits, skills, attitude - Negative info about general desirability as an employee - RESULT: Has chilling effect on useful references- only verify employed, dates, sometimes salary

What is wrongful Interference with Contracts AKA Tortious Interference with Contracts?

- Definition : third party interferes with another's right to contract - Example: Nikke Finke has an employment contract with the New York Post. Ms. Finke wrote an articale about a lawsuit between Disney and a literary agent. She said that Disney acted in bad faith regarding rights to Winnie the Pooh Characters. Disney contacts the New York Post. They fired her. This was a wrongful interference with contracts because Nikke has a contract with the New York Times.

What is causation?

- Did the defendant's act cause the injuries to the plaintiff? - BUT FOR Test: But for the negligent conduct, the victim would not have been injured - Proximate Cause- Foreseeability- the harm suffered was a foreseeable consequence of the negligent act; the general danger was foreseeable - Palsgraf v Long Island Railroad: Palsgraf and her daughter purchased railroad tickets to go to the beach. Two man run for the train, one man makes it and the other man is pulled up onto the train but drops his package. When the package falls, an explosion incurs. Palsgraf was struck and injured. She sewed the railroad for negligence by the railroad workers who helped the men up onto the train. Eventually, it was deemed these were not foreseeable circumstances

National Origin:

- EEOC treats Hispanic as a national origin under Title VII - US Supreme Court defines national origin as the "country where a person was born, or more broadly, the country from which his or her ancestors came." - Under Title VII, the EEOC has defined Hispanic to mean a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin. - Courts generally feel the issue is unresolved whether Hispanic is a race under Title VII and it is determined on a case by case basis - White Professors Lawsuit and Howard University: Professors brought a discrimination lawsuit because they were not being given tenor because of their race. They won there case.

Legal Limits to the At-Will status:

- Employee may NOT be discharged for any legally prohibited reason- such as age, sex, race, disability - May not be discharged for performing a legal duty - Employee may sue employer for wrongful discharge if the discharge violated public policy - Patterson v Gentiva Health: Patterson, a in home health care provider, was told by his employer to stop treating a patient. Mr. Patterson continued because the patient needed continued care. The doctor for the patient said he needed care. Gentiva Health terminated him for insubordination. The court found that this was wrongful termination.

Why do we care about restrictions for minors?

- Employer must verify age of potential employees - Penalties apply whether wilful or innocent - US Department of Labor & SC Department LLR

Criminal Background Checks:

- Employers may consider prior criminal convictions in making employment decisions - Employer may obtain applicant's or employee's criminal history record from SC Law Enforcement - Statutes require background checks for certain jobs; school districts, security firms

Religion:

- Employers must accommodate employees religious practices - Most often about whether employer made reasonable efforts to accommodate religious beliefs of employee - Exception granted if the accommodation would create an undue hardship on employer's operations - Brown (7th Day Adventist) v Hot Springs Nat'l Park - Hospital (Acute Care Hospital) - Brown is a 7th Day Adventist. Brown, a director, would not work from Friday to sundown Sunday. The hospital said they needed to reach the employee in this position 24/7. The hospital withdrew their job offer.

SC follows Federal Family and Medical Leave Act which states:

- Employers of more than 50 employees are subject to the act - Employees are entitled to up to 12 weeks of UNPAID leave every year: - Birth of a child & to care for the child - Placement of an adopted or foster child with the employee - Care for spouse, child, parent with serious health condition - Employee has a serious health condition & is unable to perform the functions of their position - **special military leave entitlement extends 12 weeks to 26 weeks under Military Caregiver Provision - **Qualifying Exigency Leave : allows 12 weeks coverage to employee family member of military member called to active duty

What is Unconscionability?

- Exclusions made according to the UCC specifications are not unreasonable - Disclaimers are invalid in some states a) Against public policy b) Prohibit by consumer protection laws

Hostile Work Environment:

- Exists when supervisor's conduct causes anxiety and affects the work environment in a negative way for the employee - Unwelcome flirting, sexual propositions, use of degrading words of sexual nature, display of sexually explicit pictures - Plaintiff must prove severe & pervasive conduct on supervisor's part to meet their burden of proof - Employer may raise affirmative defenses to liability: exercised reasonable care to prevent & correct sexually harassing behavior - Plaintiff employee did not take advantage of corrective opportunities provided by employer - Existence of a sexual harassment policy will aid employer (see p 804, fig. 39-2) - Burlington vs Ellerth: Ellerth accuses her supervisor of constant sexual harassment. Ellerth got a promotion. - After a while, she decided to quit but said her discharge was forced upon her. Ellerth filed no complaints until after she quit.

Minimum Wage:

- FLSA mandates employees not be paid less than minimum wage - Federal minimum wage increased to $7.25 back in July 24, 2009 - SC enacted a law prohibiting the establishment of any law requiring a minimum wage that exceeds the federal minimum wage (SC Code §6-1-130) - SC does not have a standard for minimum wage or overtime pay Follows Fair Labor Standards Act (FLSA)

Employment of Minors:

- FLSA regulates at the federal level (Federal Fair Labor Standards Act) - SC Department of Labor, Licensing & Regulation at state level has authority to enact regulations affecting child labor - SC Law and Federal Law are very similar Anyone under 18 is a minor

Federal Laws:

- FTC Franchise Rule - Requires that franchisors provide each prospective franchisee with a required disclosure document (FDD) - Disclosure only rule; no registration required

What is Trademark Use/ Brand?

- Failure of franchisee to maintain trademark usage standards and brand standards as required can dilute the brand; Franchise agreement terminated, franchisee continues to use trademark without permission - (Shakee's USA v Tutto's Pizza) Their franchise agreement was ended. Tutto continued to use Shakee's logo and trademark. Tutto's was participating in trademark infringement,

What is negligence and what are the elements?

- Failure to exercise the care that a reasonable person would under similar circumstances - Elements of Negligence 1) Duty to exercise reasonable care 2) Breach of the Duty 3) Causation 4) Damages

What is Breach of the Duty?

- Failure to meet the standard of care of a reasonable person - What would a reasonable person have done under similar circumstances? - Tyson Foods v Guzman: There was a breach of duty by the forklift operator

What is Product Disparagement aka Commercial Disparagement and what are the elements of a claim?

- False statements made about a business or product Elements of a claim: 1) False statement is published 2) With intent, or reasonable belief, the statement will cause financial loss for the business 3) There is in fact a financial loss 4) Defendant makes the statement knowing that it is false - Trade Libel: written defamation - Slander of Title: making false statements

Rights and Benefits: Employee Privacy Rights:

- Federal Wiretapping Act says it is unlawful to monitor communications, provides for criminal & civil liability

What is the Magnuson-Moss Act and the requirements?

- Federal law that governs consumer product warranties - The Act requires manufacturers and sellers of consumer products to provide consumers with clear and detailed information about warranty coverage. - *Requirments* : - Warrantors must designate or title a written warranty as either "full" or "limited". - Warrantors must state certain information about the coverage of the warranty in a single, clear, and easily readable document. - Warrantors or sellers must ensure that warranty is available where the warranted consumer product is sold so consumers can read the warranty before buying.

Rights and Benefits: Unemployment Benefits

- Federal-State Unemployment Insurance Program provides unemployment benefits to eligible workers who are unemployed through no fault of their own - To provide temporary financial assistance to unemployed workers - Each state administers its own unemployment program as per federal guidelines - Eligibility, benefit amount & length of time to receive benefits determined by state law -Usually if employee is fired for misconduct or quits with no cause may not be eligible - Most states fund the unemployment benefit through a tax paid by the EMPLOYER

Implied Warranties in the Sale of Food and Drink:

- Food must be fit for its ordinary urpose; human consumption - Two tests courts apply: 1) Foreign/natural doctrine (nonindigenous/indigenous) a. Nonindigenous= rock b. Indigenous= bone 2) Reasonable expectation test - Case Summary: Pinkham v Cargill (p. 466) Pinkham suffered an esophageal tear from a bone in his turkey sandwich. Pinkham sued Cargill for serving unsafe food. Lower court throughout the case. It was appealed. Bone is an indigenous food. BUT a consumer does not reasonably expect a large bone to be found in the sandwich. - foreign/natural doctrine: no liability if the offending food product is natural to the ingredients; liability if substance is foreign - Reasonable expectation test: if consumer would not have expected to find the item in the food product then liability will be found

State Laws:

- Franchise registration & disclosure laws - Some states require registration before offering franchise - Disclosure requirements similar to federal FDD - Business Opportunity registration & disclosure laws

What is Transfer of Ownership?

- Franchisor has a right to sell its franchise business; Franchisees usually don't like it - Century Pacific v Hilton Hotel- Hilton's sale of Red Lion chain gave no right to franchisee to bring legal claim

Penalties for Violation of Registration and/ or disclosure requirements

- Franchisor in violation faces liability with federal government, state, and franchisee - Possible consequences of violations: FTC can bring a lawsuit for injunctions & restraining orders, require franchisor to cease & desist violations, Civil & criminal remedies, equitable relief, rescission of franchise agreement, order to cease franchise sales in state, seek damages, attorney's fees, fines & penalties, franchisor may be required to repurchase unsold goods, equipment and other assets, punitive damages possible if conduct of franchisor intentionally wrong

What are Trade Secrets?

- Franchisors have a legal right to enforce protection of trade secrets used in their business operations. Protects information, processes, methods that give the franchise an edge over their competition, have economic value and have been kept secret.

What are Systemwide Changes?

- Franchisors need to change their systemwide method of operation to remain competitive. Courts have upheld the franchisor's right to update system and operations manuals Ie. upgrading the menu, systems, and atmosphere

What is Duty to exercise reasonable care?

- General duty of care to act as a reasonably prudent person would in similar circumstances - Malpractice: when a professional fails to provide their services in accordance with commonly accepted standards; Doctors, dentists, lawyers, accountants : standard of care is other professionals not ordinary person - Duty of Care for businesses, property owners, parking lots, and shopping centers must keep there parking lots and public areas safe and well lit - Tyson Foods v Guzman- Guzman worked as a chicken catcher at different poultry farms. He was working at a Tyson's food facility and someone was using a forklift. Tyson has instructed its forklift operator to always keep the chicken catchers in sight. The forklift operator struck Guzman and he suffered a spinal injury.

Property Searches:

- Gov't employees have reasonable expectation of privacy balanced with employer's interest to supervise, control and operate business efficiently - Video Cameras - not okay where there is an expectation of privacy - EMPLOYERS should obtain CONSENT

Franchise Disclosure Basics:

- Heavily regulated industry - Franchisor must comply with federal and state laws

Title VII applies to:

- Hiring process - Disciplinary issues - Discharge of employees - Promotions - Benefits provided

Supervisor Issue and Employer Liability:

- If harasser is coworker, employer is ONLY liable if the employer was negligent in having a work environment where harassment could occur - If harasser is a supervisor , the employer company IS liable - Supervisor is a person empowered by the employer to take tangible employment actions against the employee such as firing, fail to promote, reassignment - Vance V Ball State University: Vance sued her employer because her fellow employee was creating a racially hostile work environment. It was dismissed because it was a fellow employee. Ball State University won because they could show that they were not negligent.

Under the South Carolina Employment-at-Will Statute, which of the following procedures must an employer follow to avoid destroying an Employment-at-Will relationship when providing Employee Handbooks to new employees?

- Include a disclaimer in bold print on the 1st page "This is an At-Will employment relationship" - Obtain the employee's signature on the 1st page of the handbook, under the printed statement "This is an At-Will employment relationship"

Exclusion of Warranties by Examination of Goods:

- Inspection of goods by buyer prior to sale waives any implied warranties - If seller requests buyer to examine goods, and buyer declines, buyer assumes the risk of defect - Buyer waives implied warranty for any defect that would have been reasonably been discovered upon inspection of goods - Distinguish professional vs nonprofessional buyer

What is Express Warranty?

- International Product Safety Laws in the US- CPSIA Consumer Product Safety Improvement Act - Allows The U.S. Consumer Products Safety Commission (CPSC) to regulate the safety of products made outside of the U.S. and imported for sale in the U.S. - CPSIA contains regulations that are intended to make products for children under age 12 safer by requiring manufacturers and importers to show that these products do not have harmful levels of lead. - Requires accredited third party product safety testing *Breach of Express Warranty* : - Warranty is false - seller/ warrantor is liable for breach of express warranty - No defense applies; does not matter if the seller believed warranty provided was true

Email Monitoring:

- Issue of privacy arises when employee terminated due to content of email - The Electronic Communications Privacy Act (ECPA) applies - Ordinary course of business & Consent exceptions apply - See text Holmes v Petrovich Development Co: - Holmes sent emails from her company computer to her attorney about litigation she had going on with Pretrovich. She argued these were protected although they were sent during work hours. She said it was covered by attorney client privilege. In fact, the employers rights over road the client privilege.

What is a Franchise?

- It's not a form of business entity - It's a method of doing business - Complex area of law

In Necessity of Defect, a Product is defective because of a:

- Manufacturing defect (defect made while it was physically created) - Design defect (design was lacking) - Inadequate instructions on proper use - Inadequate warnings of danger

Who can recover and Who is Liable in Nature of Harm?

- Many years ago Privity of Contract was required to establish recovery and liability - Seller only liable to the buyer, who was under contractual relationship with the seller; only the parties to the contract *who can recover* : (UCC) a seller's warranty whether express or implied extends to who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty. *who is liable* : A person injured by a defective product may recover from the seller, manufacturer, and manufacturer of the component part. Look at the 'stream of commerce'. Who is responsible for putting the product in the hands of the consumer.

Defenses for USERRA:

- May terminate reemployed service member for cause - May be excused when employer's circumstances have changed to make reemployment impossible or undue hardship

Employment Contracts:

- Most employment contracts are informal - Formal written contract used for professional positions, highly skilled workers - If position is for more than one year, contract must be in writing - General contract law applies - Heed the THIS IS NOT AN OFFER OF EMPLOYMENT rule

Method of Payment for employees :

- New employees must be notified in writing at time of hire of normal hours & wages agreed upon, place of payment, deductions to be made, and any benefits due - For each pay period must provide an itemized statement of gross pay & deductions - Employer may NOT withhold or divert any portion of employee's wages unless required/permitted by law or unless they provided written notice to employee *Penalty for NOT Paying:* - Each failure to pay is a separate offense - Civil penalties apply AND employee may recover three times the unpaid wages plus costs & attorney's fees - Civil penalty is $100 per violation

Limited Liability Company:

- Newest form of entity - Most popular for new businesses, - Owners are the members - File Articles of Organization with the state

What is formation regarding general partnerships?

- No formal filing with SC Secretary of State's office - 2 or more people conducting business for profit is automatically recognized as a General Partnership - trigger application of the Uniform Partnership Act

What is Conspicuousness?

- Not misleading ; Use Bold or Uppercase font; Not hidden; Obvious ➔ Not conspicuous? Disclaimer fails, Warranty applies - Example: An ink cartridge was bought. There was a warning in VERY SMALL INK. It was conspicuous and blended in with the rest of the font. They wanted to sue because the ink cartridge failed.

SC Job Reference Immunity Statute

- Oral reference: may only disclose dates of employment, pay level & wage history - Written reference: former employer may disclose the following IF the employee also has access to the same info- - Written employee evaluations - Personnel formal notice of reason for separation voluntary/involuntary termination & why terminated - Info about job performance - Former employer follows these requirements to be immune from defamation claim - HOWEVER : if the former employer knowingly or recklessly releases false information that does defame former employee, the immunity is lost

What is the Sports Exception Doctrine?

- Participating in certain sports containing inherent and unreasonable risks of harm (contact sports/teams) - Negligence theory not applicable, risk of harm within rules of the game - Need heightened proof of reckless or intentional conduct by the defendant - Establish liability, plaintiff entitled to damages - A sports participant has no claim against another sports participant for an injury sustained during play, unless the co-participant intentionally or recklessly injured the other. - Football Case: A player acted out of anger and struck the back of another players head who had completed his play and was on a knee. Sues the other player for intentional and recklessly behavior.

Paying Employees:

- Paying Employees SC Code: SC Code applies to ALL employers EXCEPT those employing domestic labor in private home and employers with LESS than 5 employees at all times during a 12 month period

What is vicarious liability?

- Plaintiff injured in a franchise location sues franchisee and the franchisor. Generally if franchisor does not control day-to-day operations, not liable (McDonalds case summary text p832) - Example: In a franchise of Dominoes, a Franchisee's employees sexually assaulted a young girl. The Franchisor is not responsible for hiring and firing the employee accused of the crimes. - An element of a franchise is to have control over operation of business - Avoid controlling specifics or daily means of operating business - Avoid control over employment matters - Require franchisee to display signage of independent ownership

What is Assumption of Risk?

- Plaintiff knowingly and voluntarily assumes a risk of harm connected with the negligence of the defendant - Did the plaintiff assume the risk? No, recovery if defendant was negligent. To prove the defense of assumption of risk: 1. Plaintiff had actual knowledge of the risk involved 2. Voluntarily accepted the risk through express agreement or implied conduct. - Express: signed agreement of statement - Implied: by conduct of oral statement

What are Damages:?

- Plaintiff must prove actual damages suffered as a result of defendant's negligence - Plaintiff is entitled to be made whole and may be awarded compensation for: - Past future pain and suffering (mental anguish) - Past & future physical impairment - Past & future medical care - Past & future loss of earning capacity - Breach of duty shocking? Punitive damages - Guzman v Tyson: Comparative Negligence was applied- how much of the accident was Guzman's fault. He was found 20% responsible because he was slightly neglectful. If the jury awards a certain number, he will only receive 80%. - Joint and Several Liability: multiple defendants held liable to pay the entire judgment amount

Drug and Alcohol Testing:

- Pre & post-employment decision testing is required under federal law for certain jobs (safety sensitive jobs, mass transit workers, airline, railroad, trucking industries) - Employers affiliated with the State must comply with SC Drugfree Workplace law SCDW does not require drug testing, does mandate employer provide information & notices about drug use awareness - Grant recipients and contractors with state agencies must certify they provide & maintain a drug-free workplace - Random drug & alcohol testing of private sector employees allowable on basis of reasonable suspicion - Employers must keep all info about drug test programs & results confidential

In Necessity of Defect, To impose liability, a buyer must show:

- Product is defective - Defect caused harm

USERRA Requires:

- Prompt reemployment to same or comparable position of like seniority, status & pay (as if they had not been on military duty) - Served more than 180 days, they cannot be discharged from their job before 1 year of reemployment is complete - Served between 30 and 180 days, protected for 180 days from being discharged from job - Employer must make reasonable efforts to accommodate those who became disabled while in service - Remedies include back pay for lost wages & benefits - See text p. 780 (case summary): A bank worker was called to duty after 9/11. When he returned from deployment, they offered him a job for just a handful of account. Before he managed 9 million dollars and 130 accounts. He received 1.6 million.

EEO Law Affirmative Action Programs:

- Required to do business with the federal government Intent is to ensure all persons have equal opportunity in recruitment, hire, promotion, training, & discipline in employment - Helps avoid discrimination lawsuits - Fulfill government contract requirements - Employers enact AAP (affirmative action plans) to hire & train minorities & women, support their growth within the company - Can backfire when women & minorities are given job preference - Goal is to benefit ALL; promote diversity & inclusion among all individuals - Supreme Court decision of Adarand I provides guidance to employers and resulted in EEOC statement: - Affirmative Action Programs are lawful when they respond to a serious imbalance in the workforce, are flexible, time limited, only applicable to qualified workers, and respect the rights of nonminorities and men

Guidelines regarding limited partnerships?

- Requires at least 1 general partner & 1 limited partner General partner : - same rights & responsibilities as in a GP (unlimited liability) - Usually runs day to day operations of business Limited partner : - Some liability protection from acts and obligations incurred by LP - Liability only extends to amount of their investment - Usually provides the capital - Usually the silent partner, not active in management

EEO Law: Protection Against Retaliation

- Retaliation claims are the leading category of charges that come before the EEOC:Title VII prohibits discrimination on the basis of race, color, religion, gender & national origin as well as retaliation against employees who oppose unlawful discrimination or participate in Title VII proceedings. - Title VII prohibits employers from retaliating against an employee because they: - opposed any practice made unlawful by this Act (i.e., opposed discrimination) - made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this Act. **Known as opposition" and "participation" clauses of Title VII.

Employment-At-Will:

- SC is an employment-at-will state - Either party can terminate employment relationship at any time for any reason or for no reason - Either party can terminate employment relationship at any time for any reason or for no reason - Unless employment contract states no termination without good cause - As long as the reason is not against the law

Sarbanes-Oxley & Dodd-Frank Acts

- SOX prohibits publicly traded company from taking adverse employment action against employee assisting with legal proceedings for wire fraud, shareholder protective actions, violation of SEC rule - Dodd-Frank provides expanded protection and monetary incentives to WB

What are the Forms of Express Warranty?

- Seller does not need to state "this is a warranty" (it is assumed) - UCC §2-313(2) : It is not necessary.... that the seller use formal words... or that the seller have a specific intention to make a warranty" - Written, Oral

Seniority:

- Seniority system rules provide job security to employees - Workers with more years of continuous service given priority to jobs over workers with less years service

Implied Contact of Employment and the Employee Handbook:

- South Carolina court decisions determine whether - - - Employee Handbooks impact the Employment-at-Will doctrine - "Employment-At-Will" statute: a) Sets out procedures employers should follow to avoid destroying Employment-at-will b) 1st page of handbook must have conspicuous disclaimer: THIS EMPLOYMENT RELATIONSHIP IS AT-WILL c) Employee's signature must be below the disclaimer

Title VII allows plaintiffs:

- Sue for back wages - Money & benefits employee would have earned if not discriminated against - Reinstatement of job placing a worker back in a job they have lost without loss of seniority or other job benefits - Front pay - Monetary equivalent of reinstatement - Attorney's fees and costs - Compensatory & punitive damages (capped up to $300,000, no cap for damages in race cases)

What are the four main themes of employment?

- The Employment Relationship - Rights & Benefits - Workplace safety - Equal Employment Opportunity Law (EEO) →Area of law governed by state & federal law →Focus on South Carolina law →Remember federal law preempts state law →Court will favor interpretation that is best for employee

Tort and Crime Distinguished

- Tort : a CIVIL wrong that interferes with one's property or person; violation of a private duty - Tort cases are heard in CIVIL proceedings - Focus is on compensating the victim Case is brought by the injured party

Defenses to Defamation

- Truth: if the statement is true, even if harmful to the victim, NOT defamation - Absolute Privilege: complete defense, members of Congress, witnesses at trial - Qualified Privilege: employers statement made to protect interests of company - Media has no liability if they print a retraction and there is an absence of actual malice

What is Warranty of conformity to description, sample, model?

- UCC §2-313(1)(c): "any sample or model which is made part of the basis of the bargain creates an express warranty that the ...goods shall conform to the sample or model." - Go to car dealer, find car desired, order a different color in same model. Ordered car should have same features as sample car on lot.

What is Seller's Opinion or Statement of Value?

- UCC §2-313(2): "....but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion ... of the goods does not create a warranty." - Sales talk or puffery ➜ not a warranty - Sales puffery is not an expressed warranty it must be a fact to create an expressed warranty *UCC Exception* : - Circumstances are such that a reasonable person would rely on the statement - Seller is believed to have expert knowledge about the particular subject matter

What is trespass?

- Unauthorized action with respect to land or personal property - Trespass to Land: unpermitted entry to one's land - Trespass to Personal Property: use of personal property without permission of the owner

Disparate Impact:

- Unintentional: Organization's practices, policies or procedures are unbiased but the result is a disproportionate impact on protected groups - race, color, religion, sex or national origin - Griggs v. Duke Power Co.: Griggs and other black employees challenged Duke's Power high school education and other tests were discriminatory. All lower courts found no violation of Title VII because Disparate Treatment was not occurring. Found Duke Power Liable under Disparate Impact. ***Title VII prohibits not only overt discrimination but also practices that are fair in form but discriminatory in operation. Any practice that operates to exclude minorities & cannot be shown to be job related or a business necessity - is prohibited MUST BE a BUSINESS NECESSITY or JOB RELATED***

What is Implied Warranty Against Infringement?

- Unless otherwise agreed, seller agrees goods will be delivered free of any third party claim of infringement- copyright, patent, trademark - Seller can disclaim this warranty "Seller is not liable for any damages Buyer may suffer due to third party infringement claims regarding the software installed in the device."

What is Exclusion or Modification of Warranties?

- Warranties may be disclaimed by agreement of the parties - Disclaimer must not be unconscionable or against public policy - Must be conspicuous - Particular language may be required

Sales of Used Goods:

- Warranty of Merchantability applies but use a lower standard of "fit for ordinary purpose" - "Extra" disclaimer that goods will work as intended, given their condition at the time of resale.

What is Nature of Harm?

- What harm can occur from one defective product? - - - What are the potential consequences? Examples: - I am a baker and buy a new delivery truck - I have sold out for the month and am booked for daily deliveries with my new truck - Brakes fail, my truck is totaled, I am injured, crash thru a CVS window, injure shoppers - 1 product defect ➜injury to me, injury to third party persons, property loss, economic loss, etc... multiple consequences and harm caused

Reverse Discrimination:

- When employer's affirmative action plan (AAP) is not justified and results in hurting the interests of nonminority employees

BFOQ Bona Fide Occupational Qualification:

- When religion, gender, or national origin is a BFOQ reasonably necessary to the normal operation of an employer's business - Men's clothing store needs male tailors in dressing room areas -OK - Coffee shop will not hire those identifying as Catholic - NOT OK

What is Contributory Negligence?

- a doctrine of common law: if a person was injured in part due to their own negligence (their negligence "contributed" to the accident), the injured party would NOT be entitled to collect ANY damages (money) from another party who supposedly caused the accident - Unfair results: most states have now adopted Comparative Negligence

What is express warrantee?

- a statement of fact or promise of performance relating to the goods that become the basis of the buyer's bargain - UCC governs - Buyer's purchasing decision based on seller's statement - Statement by seller about quality or characteristic of goods is an express warranty - Warranty not lost thru distribution chain

What is Strict Liability?

- absolute legal responsibility for an injury that can be imposed on the wrongdoer without proof of intent, negligence or fault - Holds a person or company responsible for unintended consequences - Fault is not an issue - Must prove injury or damage to property occurred Injury or damage is a result of the activity - Abnormally dangerous activities - Example: A company was building a bridge near a neighborhood and they needed dynamite for a portion. They use it and blow the bridge. A boy in the neighborhood is struck by a rock. They are strictly liable.

Exceptions of Assumption of Risk?

- against public policy - cannot cover intentional acts - lack of capacity to contract - voluntary behavior is actually involuntary under circumstances - activity is unforeseeable - Example: Mom and her two sons are at a baseball game. The mom gets hit in the face during the game and sews the team and the stadium. Has she implied that she assumes the risk by buying the ticket? Yes, she cannot collect damages.