l201 test 2
Family and Medical Leave Act
-1993 passed by congress -covers those employed for at least 12 months -covered employees are entitled to a total of 12 workweeks of leave during a 12 month period for reasons of: child birth and care, adoption of a child, need to care for a spouse or child or parent, own serious health condition
CBS Corp vs FCC case: refers to "employees"
-CBS= tv network -jackson and timberlake performance during the superbowl--> janets tit popped out for less than a second but people freaked out -FCC determined CBS was liable for a penalty of 550,000 on several grounds including that they are liable for the wilful actions of its employees -decision: JJ and timberlake were not employees of CBS
Darco Transportation v. Dulen--> workers' compensation benefits
-Dulen and Freeman were hired by Darco Transporation to transport goods cross country -the railroad arms malfunctioned and came up as a train was approaching -Dulen's rig hit the train and freeman died and dulen had injuries -might have been doin it?? -oklahoma's jurisprudence has recognized that a compensable work related injury must 1) occur in the course of and 2) arise out of the workers employment -result: found that it was the equipment's failure as the cause for claimant's injuries -rule of law: the term "in the course of employment" relates to the time place or curcumstances under which the injury is sustained, the term "arise out of employment" means the casual connection between the injury and risks incident to employment, jurisprudence has long recognized a compensable work related injury must both: occur in the course of and arise out of the workers' employment
MDM Group Associates, Inc. v. CX Reinsurance Company Ltd.
-MDM Group is an insurance broker -McNasby= president who developed an insurance program for insuring ski resorts against the risk that the number of "paid skier days" would fall below a specified minimum -CX Reinsurance company and others agreed to underwrite insurance policies to cover the risk in exchange for premium payments -1999-2000 ski season really bad bc no snow and all insured resorts submitted claims -CX had to pay in excess $23 million and declined to renew the insurance policies after that year -MDM then sued CX on several grounds regarding liability and a breach of fiduciary duty claim -CX's stance: the breach of fiduciary duty claim must fail because a principal cannot owe a fiduciary duty to an agent as a matter of law -analysis: the principal entrusts her business to the agent to act for the principal's benefit aka any duties owed by a principal to an agent are not fiduciary, the jury was wrongly instructed that there was a fiduciary duty as a matter of law if it found that an agency relationship existedconclusion: a principal is not a fiduciary of an agent and any duties owed by a principal to an agent are not fiduciary
EEOC v Kohl's department stores case--> discusses accommodation requirement
-Manning suffered from type 1 diabetes and worked in kohl's department store and had a doctor's note to request that she work a "predictable day shift" so that she could better manage her stress, glucose levels, insulin therapy -in trying to figure out a schedule, Carr responded saying that she would have to consult with corporate and manning did not take this -manning filed a charge of discrimination with EEOC claiming for disability discrimination and failure of accommodation under ADA, EEOC sued kohl's on manning's behalf -discussing reasonable accommodations requires bilateral cooperation and communication, good faith -kohls acted in good faith when initiating an interactive process and displayed willingness to cooperate with manning two separate times
supply chain associates LLC v ACT Electronics Inc
-Supply chain associates LLC and Estream solutions LLC are manufacturer's reps and brokers that assist in the sale of electronic products -their services were retained by ACT electronics (a corp that specializes in manufacturing electronic devices and components) -when ACT failed to pay the promised 4-5% commissions, they sued ACT and other businesses affiliated with ACT -argument: in trial court, SC and Estream argued that the veils between ACT and other businesses should be pierced to make them liable for the commissions that ACT failed to pay -defendant shareholders and ACT affiliates asked the court to grant them summary judgement on the ground that ACT's corporate veil may not be pierced to make the defendants liable for the commissions ACT failed to pay -defendants were entitled to summary judgement because they were able to show that Supply Chain and Estream cannot establish that the corporate veil should be pierced
S Corporation
-a form of corporation that avoids double taxation by having its income taxed as if it were a partnership -income and losses of the business are reported on the shareholders individual federal income tax returns -may have no more than 100 shareholders, have only one class of shares, and be owned only by individuals and trusts -losses of business are deductible on individual federal income tax returns
Frontier Leasing v. Links Engineering case
-a principal may be liable when he knowingly accepts (or ratifies) the benefits of a transaction entered into by one of his agents -under estoppel, a principal is liable if he has notice that a third party believes an agent has authority and does not give notice to the contrary -under estoppel a principal is liable if he causes a third party to believe an agent has the authority to act
identify the consequences when both the principal and the agent are liable for an agent's torts
-a third party can join the principal and the agent in one suit and can get a judgement against each -a third can sue either or both individually and get a judgement against either or both
factors that determine a principal's duty to compensate agents
-accomplishment of specific tasks and relationship between parties and surrounding circumstances
requirements for ratification
-act ratified must be the one that was valid at the time it was performed -principal must have been in existence at the time the agent acted -when the contract or other act occurred, the agent must have indicated to the third party that she was acting for a principal and not herself -principal must have legal capacity at the time of the ratification -principal must have knowledge of all material facts regarding the prior act or contract at the time it is ratified -principal must ratify the entire act or contract -principal must use the same formalities required to give the agent authority to execute the transaction
worker's compensation basic features
-allow injured employees to recover under strict liability (removing any need to prove employer negligence) -eliminate employer's 3 traditional defenses: contributory negligence, assumption of risk, fellow servant rule -make workers' compensation an employee's exclusive remedy against her employer for covered injuries -provides an exclusive remedy for employees against their employers for covered injuries
berry v great american dream inc case--> required or desired traits cannot be the basis for a BFOQ defense unless those traits are synonyous with a particular sex, religion, or national origin
-berry was a dancer at Pin Ups and was pregnant and fired, rules were intended to ensure that the entertainers had sufficient sex appeal to uphold their image and service -berry sued great american dream under title vii as amended by the pregnancy discrimination act and the defendant moved for summary judgement justifying that under bona fide occupational qualification defense -berry's stance is each individual pregnant dancer must be judged separately rather than dismissing pregnant dancers as a whole -sided with berry
more into gratuitous agent vs paid agent
-both have same fiduciary duty but gratuitous agent need not perform as promised -gratuitous agent can terminate agency without incurring liability but is liable for failing to perform as promised
limited liability company
-business form intended to combine the nontax advantages of corporations with the favorable tax treatment of partnerships -owned by members who may manage the LLC themselves or elect the manager/ managers who will operate the business -members have limited liability for the obligations of the LLC
identify the ways in which agents may expressly bind to contracts
-by joining the principal as obligors on the contract -by making a contract in their own names
Gniadek v camp sunshine at Sebago lake inc case: discusses apparent authority of camp counselor
-camp sunshine is a nonprofit summer camp -Gniadek= 17 yr old girl attending camp with her mom -Newton= 58 yr old, first year camp counselor and asked to keep in contact with Gniadek/ they traded contact info -in November, newton contacts gniadek and invites her to visit a family who attending camp, the mom said yes, camp sunshine had no knowledge of plans -they stayed at a hotel and he assaulted her -gniadek sued camp sunshine for vicaccrious liability of the acts of newton -found that newton was not camp sunshine's agent at the time of the assault, a principal is not subject to liability when actions that an agent takes with apparenet authority do not constitute the tort, apparent authority exists only when the conduct of the principal leads a third party to believe that given part is its agent
title VII coverage
-covers all employers employing 15 or more employees and engaging in an industry affecting interstate commerce -covers certain unions in its capacity as employee representative
ERISA (employee retirement income security act of 1974)
-created in response to pension plan abuse -checks abuses and protects employees expectations that promised pension benefits will be paid -imposes fiduciary duties on pension fund managers, record keeping, reporting, and disclosure requirements -has a provision guaranteeing employee participation, funding requirements for protecting plan participants against loss of pension income, vesting requirements that determine when an employees right to receive pension benefits become nonforfeitable
Punitive Damages
-damages designed to punish wrongdoers and to deter them and others from engaging in similar conduct -when the defendant discriminated with malice or reckless indifference to the plaintiff's rights
Labor management relations act (LMRA) / taft hartley act
-declared that certain acts by unions are unfair labor practices ex's: restraining or coercing employees in the exercise of guaranteed bargaining rights, causing an employer to discriminate against an employee who is not a union member, refusing to bargain collectively with an employer, conducting a secondary strike or boycott for illegal purposes, requiring employees covered by union shop contracts to pay excessive fees
Implied Authority
-derives from a grant of express authority by the principal -actual authority given to an agent to bind his or her principals and to act in a way that the agent reasonably believes is necessary to perform his or her duties -ex. the tree removal expert is allowed to choose a method for removing the tree
theories of discrimination relating to title VII
-disparate treatment: involve allegations that an employer treated an employee differently because of protected status (race, color, religion, sex, national origin) -disparate impact: allegations that an employer's policies or practices that are seemingly neutral with regard to race, color, sex, religion, origin have a disproportionate negative impact on members of the group
general incorporation statutes
-emerged in the late 18th century -permitted incorporation only for limited purposes beneficial to the public because incorporation was still viewed as a privilege and many restrictions were placed on corporations
Title VII of the 1964 Civil Rights Act
-employment discrimination provision -an employer cannot discriminate on the basis of race, color, religion, sex, or national origin with respect to employment. -usually a private claim
Labor management reporting and disclosure act / landrum- griffin act
-established a bill of rights for union members and attempted to make internal union affairs more democratic -amended the NLRA by adding to the LMRA's list of unfair union labor practices
in a number of states, an employee can sue outside of workers' compensation when the employer was acting in a dual capacity in relation to the employee
-ex: an employee is injured on the job by a defect in a product manufactured by the employer
Equal pay act (EPA)
-forbids sex discrimination regarding pay covering executive, administrative, and professional employees
National Labor Relations Act (NLRA) / Wagner Act
-gave employees the right to organize by enabling them to form, join, assist labor organizations -allows employees to bargain collectively through their own representatives -prohibited certain unfair labor practices -most important 20th century american labor statue
sole proprietor traits
-has the right to make all management decisions of business -all the profits of business go to the owner -sole proprietor assumes great liability -forms easily and inexpensively -no formalities are necessary, not a legal entity and not a tax paying entity for federal income tax purposes -most common form of business in the US -the business may be freely sold to someone else but the sole proprietorship as a form of business cannot be transferred to another person -many have trade names ex. carly's bagel shop
Professional Corporation
-identical to a business corporation in most aspects -formed by filing with the secretar of state and managed by a board of directors unless a statue permits it to be managed like a partnership -rigid management structure makes the professional corporation inappropriate for smaller professional practices
when is a principal considered to be disclosed
-if a third party has reason to know that the agent is acting for a principal -if a third party has reason to know the principal's identity
federal Occupational Safety and Health Act of 1970
-imposes a duty on employers to provide their employees with a workplace and jobs free from recognized hazards that may cause death or serious physical harm -applies to all employers engaged in a business affecting interstate commerce -can inspect places of employment for violations of the act and its regulations
looting
-in corporation law, the transfer of a corporation's assets to its managers or controlling shareholders at less than fair value -defrauds creditors -also occurs when the parent corporation owns at least a majority of the shares of another corporation
thin capitalization
-inadequate capitalization -the corporation has been formed without sufficient capital -proved when capitalization is very small in relation to the nature of the business of the corporation and the risks the business necessarily entails
Treadwell v JC construction case
-issue: is derr, who signed a contract on behalf of a corporate entity that he knew did not exist, personally liable for damages? -analysis: derr's use of an assumed trade name was not sufficient to disclose his agency relationship with JCDER In which was an unidentified principal -rule: to avoid liability for the agent the third party much have actual knowledge of the principal's identity and does not have a duty to investigate -rule: an agent who makes a contract for an undisclosed principal or a partially disclosed principal will e liable as a party to the contract -analysis: the treadwells argue that Derr should be personally liable since he signed the contract for a non existent corporation
johnson v J Walter thompson usa llc case--> involves descriptions of a person making inappropriate comments about rape and sexual assault
-johnson worked at JWT for advertising and quickly rose to the top and was worldwise chairman and CEO -her boss Martinez made it impossible for her to do her job due to harassment such as jokes on rape and sexual assualt and demeaning women's bodies etc -johnson filed a suit against JWT and WPP for violating title VII's prohibition against sex discrimination alleging a hostile environment based on sex -regarding objective hostility: johnson stated that he would routinely touch her, say threatening comments, etc --> enough proof -regarding subjective hostility: proved -regarding causation: related to sex discrimination and gender base
Johnson v Fluor corporation case--> example of an employer that escaped liability because of the affirmative defense
-johnson worked at power plants and her employer was Fluor maintenance services, fms hires temporary employees to augment its workforce during outages then lays them off when the work is near completion -johnson reported that Jareau acted unprofessionally and inappropriately toward her, filed a charge of discrimiation with EEOC and under title VII claiming hostile environment sexual harassment -court found that summary judgement was proper because the undisputed evidence showed FMS's response to johnson's complaint of sexual harrassment sufficient since they launched an investigation and then terimanted him -her claim was dismissed based on failure to satisfy evidentiary burden to the ellerth/ faragher affirmative defense
DePetris v Backrach LLP v Srour case
-judgement modified in part and affirmed in part -the trial court erred in relying on the principle of apparent authority -analysis: plaintiffs seek to hold defendant- agents liable for contracts they made on behalf of the principal while acting without authority from the principal -rule: under the doctrine of implied warranty of authority, a person who purports to make a contract with a third party on behalf of another person lacking power to bind that person gives an implied warranty of authority to the third party and is subject to liability for damages for loss -analysis: apparent authority is irrelevant since plaintiffs do not seek to hold principals liable on the ground that defendants had apparent authority -conclusion: judgement modified in part and affirmed in part, the trial court erred in relying on the principle of apparent authority
social security
-mainly financed by FICA (federal insurance contributions act) -FICA imposes a flat percentage tax on all employee income below a certain base figure and requires employers to pay a matching amount -self employed people pay a different rate on a different wage base
respondeat superiro
-makes a principal liable both for his employees negligence and for their intentional torts that occur while working within the scope of their employment -motivates employers to ensure that their employees avoid tortious behavior
north Atlantic instruments inc vs haber: illustrates how the duty not to use or disclose confidential information continues after the agency ends
-north atlantic designs and manufactures electronics equipment and entered into an Asset Purchase Agreement with TMI -Haber was 1/3 owner of TMI, its president, and head of sales -North atlantic entered into an employment agreement with Haber but then Haber later left to join Apex Signal Corp (a company that manufactures products targeting the same market as North Atlantic's TMI division) and used client contacts from North Atlantic and TMI -North atlantic filed that Haber and Apex misappropriated confidential business information and misused trade secrets
legal aspects of sole proprietor/ proprietorship
-not a legal entity, cannot be sued or sue aka creditors must sue the owner -may hire employees for business but the employees are under the responsibility of the sole proprietor -not a tax paying entity for federal income tax purposes -all the income is income to its owner and must be reported on the individual's federal income tax return
form of business
-one of the most important decisions made by a person -important because the business owner's liability and control of business vary among different forms of business
limited partnership
-one or more general partners and one or more limited partners -have rights and liabilities similar to partners in a partnership -manage the business of the limited partnership and have unlimited liability for the obligations of the limited partnership -if a limited partnership is taxed like a partnership, general partners report their shares of the limited partnership's income and losses on their individual federal income tax returns -may be created only by complying with a state statute permitting limited partnerships
corporation
-owned by shareholders who elect a board of directors to manage the business -board of directors often select officers to run the day to day affairs of business -shareholders have limited liability for the obligations of the corporation even if a shareholder is elected as a director or selected as an officer -tax paying entity for federal income tax purposes -shareholders do not report their shares of corporation profits on their individual federal income tax returns -double tax possibility (because profits are taxed once at corporation level and again at shareholder level when dividends are paid)
Americans with disabilities act ADA
-prohibits discrimination against people who have disabilities regarding hiring, firing, promotion, pay, other employment decisions -covers employers engaged in interstate commerce and employ 15 or more employees
worker's compensation
-protects employees and not independent contractors -state and local government employees may be covered by workers' compensation or by alternative state system
unemployment compensation
-provides unemployment compensation for discharged workers -plans vary from state to state
FLSA 1938 (fair labor standards act)
-regulates wages and hours by entitling covered employees to 1) a specified minimum wage whose amount changes over time 2) a time and half rate for wok exceeding 40 hrs per week -forbids oppressive child labor by any employer engaged in interstate commerce or in the production of goods for such coerce and forbids the interstate shipment of goods produced in an establishment where oppressive child labor occurs
formation of LLP
-requires filing a form with the secretary of state
rule/ laws applied in court from the CBS Corp v FCC case
-respondeat superior doctrine provides employer liability for torts committed by employees acting within the scope of their employment -application of respondeat superior requires selecting applicable legal standards for differentiating employees from an independent contractor
limited liability partnership
-same as partnership except that an LLP partner has no liability for most LLP obligations -retains unlimited liability for his own wrongful acts -may elect to have LLP taxed like partnership or corporation -if LLP is taxed like a corporation, it pays federal income tax on its income but the partners pay federal income tax only on the compensation paid and the partnership profits distributed to the partners -preferred form of business for professionals -gives management flexibility and protects against personal liability
-title VII provides employers several defenses which either limit plaintiff's recovery or completely excuse the employer from liability
-same decision defense: allows an employer to limit a plaintiff's recovery in a mixed motives disparate treatment claim if the employer proves that it would have taken the same action in the absense of the unlawful motivatoing factor --seniority: title VII is not violated if the employer treats employees different pursuant to a bona fide seniorit system -various "merit" defenses -bfoq defense: allows employers to discriminate on bases of sex, religion, national origin where one of those traits is a bona fide occupational qualification that is reasonably necessary to the busines in question
section 1981
-sets employment discrimination standards -forbids public and private employment discrimination against blacks, people of certain racially characterized national origins and ethnic groups -gives covered plaintiffs certain advantages that title VII doesn't provide
employee/ servant
-someone who is classified as a paid worker for a principal -principal typically has control over the manner and means of agent's performance/ work
partnership
-two or more owners (partners) -partners have the right to make all management decisions for the business -all profits are shared equally by the partners -partners assume personal liability for all obligations of the business -all the debts of business are debts of all partners -partners are liable for the torts committed in the course of business by their partners or by partnership employees -is not a tax paying entity for federal income tax purpose -losses are deductible without limit on partner's individual tax return -partnerships have a life apart from its owners -a purchasers of the partner's interest is not a partner of the partnership
Ellerth/ faragher affirmative defense
-two step test in that the employer will be automatically vicariously liable unless the employer can prove that 1. the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior 2. that the plaintiff unreasonably failed to take advantage of any preventive/ corrective opportunities provided by the employer or otherwise to avoid harm
nonemployee agent/ independent contractor
-typically contracts with the principal to produce a result and determines for himself/ herself how that result will be accomplished -generally contract with the principal to produce a result and determine for themselves how that result will be accomplished
gaskell v university of kentucky case--> involves a mixed motives claim of disparate treatment on the basis of religion
-uk looking for director and Martin Gaskell was regarded as the leading candidate -upon further looking into, the idea that Gaskell blended religion with scientific theory and it would affect his ability to perform his job was raised -UK ended up hiring someone else and gaskell sued claiming that he was not hired because of his religion in violation of title VII -Gaskell's claims were originally dismissed because he failed to show by a preponderance off evidence that UK's reasons were a pretext for discrimination -based on Gaskell's presentation of direct evidence of discrimination, UK's motion for summary judgement was denied -issue: whether Gaskell's religion was a motivating factor
limited partners
-usually have no liability for the obligations of the limited partnership -have no right to manage the business
-bases where principal's liability for an agents torts can be found
-vicarious liability -direct liability
factors that affect an agent's liability
-way the agent signed the contract -wording of the contract
reasons for a principal being undisclosed
-when a principal judges that he will get a better deal if his existence and identity remain secret -when an agent neglects to make adequate disclosure
identify all the situations where an agent would not be held liable for making an unauthorized contract
-when a principal subsequently ratifies an unauthorized contract -when an agent adequately notifies a third party that the agent does not warrant her authority to contract
green v crosby case
-when a third party is harmed by an agent's conduct, the principal is subject to respondeat superior liability -the SAC directly states and by inference that the individuals who issues the statements were employed by defendant for public purposes
situations acording to the restatement where an employee acts within the scope of employement
-when performing work assigned by an employer -when engaging in course of conduct subject to the employers control
express ratification
-when the principal manifests assent that his legal relations be affected -when a principal clearly accepts responsibility for an agency relationship
implied ratification
-when the principal's conduct justifies a reasonable assumption that he consents to the agent's act
disability
1. a physical or mental impairment that substantially limits one or more major life activities 2. record such such impairment 3. one's being regarded as having such an impairment
conflicts of interest
1. agent may not deal with himself 2. may not compete with the principal regarding the agency business and not assist the principal's competitors as long as he remains an agent 3. agent may not act on behalf of the other party to the transaction unless the principal knowingly consents 4. may not act as agent for both parties to a transaction without first disclosing the double role to both principals
termination by act of principal and or agent occurs
1. at a time or upon the happening of an event stated in the agreement 2. when a specified result has been accomplished, if the agency was created to accomplish a specified result 3. by mutual agreement of the principal and agent 4. at the option of either party (revocation / renunciation)
12 factors to consider in deciding whether to pierce a corporate veil
1. common ownership 2. pervasive control 3. confused intermingling of business activity assets or managements 4. thin capitalization 5. nonobservance of corporate formalities 6. absence of corporate records 7. no payment of dividends 8. insolvency at the time of litigated transaction 9. siphoning away of corporate assets by the dominant shareholders 10. non functioning of officers and directors 11.. use of the corporation of transactions of the dominant shareholders 12. use of the corporation in promoting fraud
principal characteristics of corporations
1. creation: corporation must be created only by permission of a government 2. legal status: a corporation is a legal person and legal entity independent of its owners (shareholders) and managers (officers and board of directors), a corporation is a person under the Constitution 3. powers: may acquire, hold, and convey property in its own name, may be sued and can sue in its own name 4. management: shareholders elect a board of directors which manage the corporation and board of directs may delegate management duties to officers, a shareholder has no right or duty to manage the business of a corporation 5. owners liability: shareholders have limited liability 6. transferability of owner's interest: ownership interest in a corporation is freely transferable 7. taxation: usually a corporation pays federal income taxes on its income, double taxation possibility
agency relationship common terminations
1. death of an individual principal 2. death of an individual agent 3. principal's permanent loss of capacity 4. cessation of existence or suspension of power of an agent or principal that is not an individual 5. upon the occurrence of changed circumstances such as changes in value of agency property or subject matter, changes in business conditions, loss or destruction of agency property or subject matter or termination of principal's interest
requirements that must exist for a court to pierce the corporate veil
1. domination of a corporation by its shareholders 2. use of that domination for an improper purpose
agency law has two categories
1. involves legal relations between the principal and the agent -includes rules governing formation of an agency, duties the principal and agent owe each other, and the ways an agency can be terminated
termination of an agency
1. termination by act of the parties 2. termination by operation of law
other grounds for termination not listed in the restatement (third)
1. the agent's loss of capacity to perform the agency business 2. changes in the law that make the agency business illegal 3. the principal's bankruptcy 4. the agent's bankruptcy 5. impossibility of performance by the agent 6. serious breach of agent's duty of loyalty 7. outbreak of war
prima facie case
A case in which the plaintiff has produced sufficient evidence of his or her claim that the case will be decided for the plaintiff unless the defendant produces evidence to rebut it.
Nondelegable Obligations
Certain duties or acts that must be performed personally and cannot be delegated to an agent -ex. making statements under oath, voting in public elections, signing a will
main reasons persons organize a business as a limited partnership
First, by using a corporate general partner, no human will have unlimited liability for the debts of the business. Second, if the limited partnership is taxed like a partnership, losses of the business are deductible on the owners' federal income tax returns. Third, investors may contribute capital to the business yet avoid unlimited liability and the obligation to manage the business.
hostile environment harassment
Occurs when sexual or other discriminatory conduct is so severe and pervasive that it interferes with an individual's performance; creates an intimidating, threatening, or humiliating work environment; or perpetuates a situation that affects the employee's psychological well-being.
parent corporation
The corporation that owns the shares of the subsidiary corporation in a share exchange
estoppel
a concept that states that a person may be liable for an actor's transaction with a third party who justifiably is induced to make a detrimental change in position because he believed the actor had authority to act for the person
subsidiary corporation
a corporation owned and controlled by another corporation aka parent corporation
concern with piercing the corporate viel
a corporation's shareholders may lose their limited liability
law agency
a legal relationship where an agent acts under the direction of a principal for the principal's benefit -also used to refer to government regulatory bodies of all kinds
agency's duty to act with care and skill
a paid agent must act with the care, competence, and diligence normally exercised by agents in similar circumstances
principals can give their agents apparent authority through the statements they make, or tell their agents to make, to third parties and through the actions they knowingly allow their agents to take with third parties
a principal might create apparent authority by telling a third party that the agent has certain authority or by directing the agent to do the same -can also create by appoint his agent to a position that customarily involves the authority to make certain contracts
power of sale
a secured loan agreement authorizing a lender (the agent) to sell property used as security if the borrower (the principal) defaults
an agency can be terminated by the act of a principal or agent when
a specified result for which the agency was created has been accomplished
agency
a two party relationship with agent and principal
responsibility
accountability -involves factors such as degree of supervision and importance of each job
how corporations should act
act for itself, not for its shareholders
regardless of a principal's nature, an agent may expressly bind himself to a contract by
acting as surety or guarantor for that principal
agent's duty to obey instructions
acting under the principal's control and for the principal's benefit, the agent has a duty to act within his/ her actual authority and obey the principal's reasonable instructions for carrying out the agency business
authority comes in 2 forms
actual authority and apparent authority
express authority
actual authority that the principal has manifested to the agent in very specific or detailed language -ex. a homeowner (principal) tells the tree removal expert (agent) that the agent is authorized to remove the ash tree in the front yard
how to prevent piercing of veils?
affiliated corporations should not commingle their assets
Confidentiality
agent may not use or communicate confidential information of the principal for the agent's own purpose of that of a third party
non profit corporation
also a separate entity and distinct from its members -a member is not personally liable for a nonprofit corporations acts or liabilities by just being a member -however, a court may pierce the veil of a nonprofit corporation if it is used to defraud creditors, circumvent a statute, or evade an existing obligation
any person can be an agent...
an agent just needs to understand that he/she is acting for someone else and is under his/her control
duty of loyalty
an agent must subordinate his personal concerns by 1. avoiding conflicts of interest with the principal and 2 not disclosing confidential information received from the principal
agent's duty to provide information
an agent must use reasonable efforts to provide the principal with facts the agent knows, or has reason to know, when the agent knows or should know the principal wants the facts or the facts are material to the agency -basically whenever it is important
subagent
an agent of an agent -a person who is appointed by an agent to perform tasks that the agent has undertaken to perform for the principal -ex. if pwc is your accounting firm, then the accountant handling your affairs is Pwc's agent and your subagent
general agent
an agent that is employed to conduct a series of transactions
special agent
an agent that is employed to conduct a single transaction or a small simple group of transactions
gratuitous agent
an agent who receives no compensation for his or her services -they have the same power to bind their principals but sometimes lowers the duties principal and agent owe each other and may increase the parties' ability to terminate the agency without incurring liability
apparent authority
an agent's ability to affect the principal's legal relations -consent must be communicated to the THIRD PARTY -arises when the principal's manifestations cause a third part to believe reasonably that the agent is authorized to act in a certain way
actual authority
an agent's ability to affect the principal's legal relations -consent must be communicated to the AGENT
if two jobs are substantially equal but paid unequally
an employer must prove one of the EPA's four defenses or it will lose the case
mixed motives claim
an employers decision is a mix of prohibited and lawful motives
an agency power given as security for a duty owed by the principal is an exception to some of the termination rules
an important subset of an agency power given as a security is an agency coupled with an interest
Title VII covers organizations
and not individuals
termination regarding affects with third parties
apparent authority of agent ends when the third party receives appropriate notice of the termination and it is no longer reasonable for the third party to believe that the agent has actual authority
one of the traditional defenses of employers is employee
assumption of risk
compensatory damages
damages that victims of intentional discrimination can recover/ be compensated a part for direct losses due to an injury suffered -exs: harms such as sickness, loss of reputation, denial of credit, emotional distress
Genetics Information Nondiscrimination Act
deals with health insurance -prohibits employment discrimination on the basis of an individual's genetic info and prohibits employers from requesting, collecting, purchasing genetic info
nearly all corporations whose veils are pierced are close corporations because
domination is more easily accomplished in a close corporation than in a publicly held one
renunciation
done by the agent -occurs when either party manifests to the other that he does not wish to continue
special charters from state legislatures
early american corporations received these charters that were granted one at a time by special action of the legislatures
sexual stereotyping violates title VII
employer behavior that either denies an employee opportunities by requiring that he/ she must have traits traditionally associated with sex OR penalizes for lacking such traits
corporations should not
engage in conducts that are prohibited by a statute
corporation law
erects an imaginary wall between a corporation and its shareholders that protects shareholders from liability for a corporations actions -contracts and debts of a corporation are not of its shareholders
an agent can escape tort liability if he
exercises a privilege of the principal
skill
experience, training, education, ability required for positions
actual authority comes in 2 forms
express authority and implied authority
an agent does not have contract liability when the third party knows that the principal is nonexistent or lacks capacity
false
what kind of relationship is agency?
fiduciary! because the principal entrusts the agent with power to make contracts for the principal and to possess and use the principal's property
2. constructive notification
for third parties who have previously dealt with the agent or who have begun to deal with the agent -accomplished by advertising the agency's termination in a newspaper of general circulation in the place where the agency business regularly was carried on
1. actual notification
for third parties who have previously dealt with the agent or who have begun to deal with the agent -can be accomplished by: 1. direct personal statement to the third party 2. writing delivered to the third party personally, to his place of business, or to some other place reasonably believed to be appropriate
executive order
forbids race, color, national origin, religion, and sex discrimination by certain federal contractors
sole proprietorship
form of business where one person owns and controls the business -an extension of its owner (sole proprietor)
sexual harassment
form of disparate treatment sex discrimination because the victim is subjected to different terms or conditions based on sex
a principal is normally liable on a contract made by his agent if the agent
had actual or apparent authority to make the contract
piercing the corporate veil
holding a shareholder responsible for acts of a corporation due to a shareholder's domination and improper use of the corporation
authority
in agency law, an agent's ability to affect his or her principal's legal relations with third parties -also used to refer to an actor's legal power or ability to do something -sometimes used to refer to a statute, case, or other legal source that justifies a particular result
principal
in agency law, one under whose direction an agent acts and for whose benefit that agent acts
work related injury requirement
injury must 1) arise out of the employment and 2) happen in the course of the employment
a principal is directly liable for misrepresentations made by his agent during authorized transactions if he
intended the agent to make misrepresentations
which of the following is true about liability to a third party based on an agent's implied warranty of authority
liability to a third party exists regardless of whether the agent is otherwise bound to the third party
limited liability limited partnership
limited partnership whose partners have elected limited liability status for all partners -identical to limited partnership in management and rights and duties -both the limited and general partners will have no liability for most obligations of the LLLP -general partner will have unlimited liability for any torts he commits while acting for LLLP
agency relations regarding contracts
most parties create agencies by a written contract BUT the agency relation does not need to be contractual at all
according to the respondeat superior doctrine, the following actions by an employee would make a principal liable
negligence and intentional torts
agents can avoid conflicts of interest with their principals by
not acquiring material benefits from a client
effort
physical or mental exertion
a principal is unidentified when he asks his agent to keep his identity secret to
preserve his bargaining position
a principal's power to ratify can be cut off after an agent's contract when the
principal fails to ratify within a reasonable time
a principals power to ratify can be cut off after an agent's contract when the
principal fails to ratify within a reasonable time
duties of principal to agent
principals obligations to compensate the agent, reimburse the agent for money spent in the principal's service, and to indemnify the agent for losses suffered in conducting the principal's business
ratification
process where the principal binds himself to an unauthorized act done by an agent or by a person purporting to act as an agent
age discrimination in employment act ADEA
prohibits age based employment discrimination against employees who are at least 40 years old -Supreme court decided it's not a violation of the ADEA for an employer to favor older employees over younger ones -ADEA covers individuals, partnerships, labor orgs, employment agencies, corps that 1. engage in an industry affecting interstate commerce and 2. employ at least 20 people -requires disparate treatment and disparate impact theories of discrimination -bona fide occupational qualification defense: an employer seeking to use this defense must show that its age classification is reasonably necessary to the proper performance of the job
immigration reform and control act
prohibits employers with 4 or moe employees from refusing to hire or terminating an employee on the basis of national origin or citizenship -prohibits employers from knowingly employing or recruiting unauthorized immigrants
the states fund workers' compensation by compelling covered employers to
purchase private insurance, make payments to a state insurance fund, self insure
even when an agent lacks the authority to contract, a principal may bind himself to it by later
ratifying a contract made by an authorized agent
Railway Labor act 1926
regulates labor relations in the railroad industry and airlines
Circumstatial Evidence
relies on reasonable inferences rather than admissions or policies to prove the employer's unlawful motive
Vicarious Liability
requires only that an agent be at fault
direct liability
requires the principal to be at fault
court's conclusion in CBS Corp vs FCC
reversed for CBS -jackson and timberlake were independent contractors rather than employees and respondeat superior does not apply on these facts
fiduciary duty
someone who is required to act for the benefit of another person on all matters within the scope of their relationship -one who owes to another the duties of good faith, loyalty, due care, and disclosure
exculpatory clause
states that the agent has authority only to make the representations contained in the contract and that only those representations bind the principal
quid pro quo sexual harassment
supervisor makes some express or implied linkage between an employee's submission to sexually orientated behavior and a tangible job consequence -SC has held that an employer is automatically vicariously liable for a supervisors harassing behavior when that harassment involves or ends in a tangible job detriment for the victim
working conditions
temperature, weather, fumes, ventilation, risk of injury, etc
when an agent breaches his/ her fiduciary duty, the principal has the legal right to
terminate the agency and recover damages from the agent
the destruction of an agency subject matter results in
termination of an agency by operation of law
the amount recoverable by compensation is usually less than what would be obtained in a successful negligence suit
that is why injured employees sometimes deny that they are covered by workers' compensation so that they can pursue a tort suit against their employer instead
MDM Case applies...?
the Restatement (third) definition of agency and shows that an agency is a fiduciary of the principal and not vice versa
a typical requirement for ratifying a contract
the act ratified must be one that was valid at the time it was performed
what happens once agency termination?
the agent's actual authority (express or implied) ends as well -an agent's apparent authority often persists after termination as well
in such cases, the employer is not vicariously liable for the perpetrator's behavior
the employer can only be liable for non supervisory harassment under a theory of direct liability
why is power given as a security or agency coupled with an interest important?
the main reason is that it is not terminated by 1 the principal's revocation 2 the principal's or agent's loss of capacity 3 the agent's death 4 the principal's death
agent
the one who acts under the direction of a principal for the principal's benefit in a legal relationship known as agency -the agent acts on the principal's behalf and is subject to principal's control -agent must manifest assent to the relationship or otherwise consent to act for the principal and under the principal's control
duty of good conduct
the restatement (third) includes a general duty that agents act reasonably and refrain from conduct that is likely to damage the principal's enterprise
the law requires employers to help ensure
their employee's financial security after employment ends
prudent principals will want to notify third parties themselves to protect themselves against unwanted liability aka
there are many different types of notifications in letting third parties know
substantially equal work requirement is met when
there's equal effort, equal skill, equal responsibility, similar working conditions
agency law's most important social function
to stimulate commercial activity -can do so by enabling businesses to increase the number of transactions they can complete in a given time
an agent has actual authority
to take an action "designated" or "implied" in the principals manifestations to the agent and acts necessary or incidental to achieving the principal's objectives of the agency -the agent's reasonable understanding of the principal's manifestations and objectives determines the agent's actual authority -it is the authority the principal wants the agent to possess aka based on the communications/ manifestations from the principal to the agent
a principal can be directly liable for tortious behavior connected with the retention of a nonemployee agent
true
a principal is not always liable for his agent's acts
true
a principal is not require to indemnify his/ her agent for
unauthorized acts
when third party knows or has reason to know that the agent is acting for a principal, but lacks knowledge or reason to know the principal's identity, the principal is
unidentified
termination by operation of law
usually involves situations where it is reasonable to believe that the principal would not wish the agent to act further or when accomplishment of the agency objectives have become impossible or illegal
an agent's knowledge of facts is imputed to the principal means that the principal's rights and liabilities are
what they would have been if the principal had known what the agent knew
revocation
when done by the principal -in general, the recalling or voiding of a prior action -in contract law, the withdrawal of an offer by the offeror prior to effective acceptance by the offerree
parties have the power to terminate cases... but not the right to do so
when one party terminates in violation of the agreement, they stop performing, but they are liable for damages to the other party
when an employee's conduct is motivated to any appreciable extent by the desire to serve the employer, then his tort would be
within the scope of employment
