ACCT 324 Exam 3

secondary boycotts

An illegal labor action in which unionized employees who have a labor dispute with their employer boycott another company to force it to cease doing business with their employer.

shareholders

An investor who holds stock in a corporation, and thus is an owner of the corporation.

revocation of agency authority by principal

If the agency has breached the fiduciary duty to the principal, the principal can revoke the agent's authority without liability. principal can revoke at any time

rights and remedies of the agent

-tort and contract remedies -demand for an accounting -specific performance

Chapter 34

Liabilities to Third Parties and Termination

discrimination based on sexual orientation

No federal legislation currently prohibits discrimination based on sexual orientation. state law determines legality

agent

One authorized to act for/on behalf of principal

principal

One who hires agent to represent him/her

fiduciary

One with duty to act primarily for another person's benefit

informational picketing

Picketing designed to truthfully inform the public of a labor dispute between an employer and the employees.

durable power of attorney

Power of attorney intended to continue to be effective/take effect after principal incapacitated

Age Discrimination in Employment Act of 1967

Prohibits employers from refusing to hire, discharging, or discriminating in terms and conditions of employment on the basis of an employee's or applicant's being age 40 or older executive exemption: company can force retirement at age 65

joint venture

Relationship between two or more persons/corporations created for specific business undertaking

NLRA

does not protect personal grievances aired on social media does protect rights of employees to address issues with their work, with or without a union

crime and agency relationships

if an agent commits a crime, clearly the agent is liable for the crime

respondeat superior

principal/employer held liable for third party they negligently hired, not for being personally at fault

Americans with Disabilities Act

prohibits discrimination against the employees and job applicants with disabilities required elements: The plaintiff had a disability. The plaintiff was excluded from the job solely because of his or her disability. The plaintiff was otherwise qualified for the job.

duties of the agent

-duty of loyalty: An agent's obligation to act in the interest of the principal. Most important -duty of performance -duty of notification: An agent's obligation to inform the principal of the agent's actions on the principal's behalf and of all relevant information. -duty of obedience -duty of accounting if not followed principal has right to terminate contract and seek damages: constructive trust indemnification avoidance

Agency relationships can be created on the basis of any of the following four forms of authority:

1. By expressed agency or agency by agreement. 2. By implied authority. 3. By apparent agency or agency by estoppel. 4. By ratification.

chain style business operation (franchise)

A type of franchise in which the franchise operates under the franchisor's business name and is required to follow the franchisor's standards and methods of business operation.

distributorship (Franchise)

A type of franchise in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory.

manufacturing arrangement (franchise)

A type of franchise in which the franchisor provides the franchisee with a formula or ingredient that is necessary to manufacture a product.

Agent Misrepresentation

If an agent misrepresents himself or herself to a third party, the principal may be tortiously liable for the agent's misrepresentation. third party can: - Affirm the contract and sue the principal to recover the damages. - Cancel the contract with the principal and be compensated for money lost.

employment at will doctrine

The doctrine which provides that either the employer or the employee can terminate the employment relationship at any time.

Principal's Tortious Conduct

The law holds a principal directly responsible for his or her own tortious conduct under two conditions: (1) The principal directs the agent to commit a tortious act (2) the principal fails to provide proper instruments or tools or adequate instructions.

vicarious liability

The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for the damages caused by its employees.

S corporation

corporation under federal law but is taxed like a partnership as long as it follows certain regulations cannot have more than 100 sharholders

Taft-Hartley Act (1947) (labor management relations act)

designed to curtail some of the powers of the unions that they had acquired under the wagner act. Section 8 designates some union acts unfair

at-will employment

employee who is not employed under a contract or a collective bargaining agreement may quit at any time for any reason or no reason at all, with no required notice to the employer. Employer may also fire employee under the same standards only exception is if termination is illegal (violates state law, federal law, state constitution, public policy)

electronic communications privacy act of 1986 (ECPA)

employee's privacy rights extended to electronic forms of communication outlaws intentional interception of electronic communications

employment at will doctrine and willful termination

employer can fire employee for any reason with three exceptions 1. implied contract 2. violations of public policy 3. implied covenant of good faith and fair dealing employees in states that have adopted can sue for wrongful discharge

Disparate Impact

when plaintiff attempts to establish that while an employer's policy or practice appears to apply to everyone equally, its actual effect is that it disproportionately1 limits employment opportunities for a protected class

may employers use social media in employment decisions

yes, but care must be taken to not run afoul of state and federal employment laws and regulations. Largest concern is discrimination

breach of implied warranty

An agent who exceeds his or her authority when the principal is disclosed or partially disclosed is liable for

notifies the agent that the relationship has been terminated

An agent's apparent authority continues until the principal: Blank______.

implied covenant of good faith and fair dealing exception

An exception to the employment at-will doctrine that imposes a duty on the employer to treat employees fairly with respect to termination. least common exception

employer control

When courts are deciding whether a worker is an employee or an independent contractor, the most important consideration is: Blank______.

In non-contractual relationships, in order to force the principal to perform the contract, the agent may seek which of the following?

When the agency relationship is not contractual or the contract is for personal services, an agent does not have the right to specific performance. The agent may recover for services rendered and/or future damages but may not force the principal to fulfill the specific contractual agreements or even to continue to employ the agent.

franchise

business that exists because of an arrangement between an owner of a trade name or trademark and a person who sells goods or service under the name or trademark

Creation of Agency Relationship

can only be created for a lawful purpose, and almost anyone can serve as an agent agency relationships are consensual relationships formed by informal oral agreements or formal written contracts

contractual liability of the principal and agent

1. classification of the principal: must be classified as either disclosed, partially disclosed, or undisclosed 2. authorized acts: acts within the scope of the agent's authority 3. unauthorized acts: go beyond scope of the agent's authority

At a minimum, employer privacy policies should cover...

1. employer monitoring of phone conversations 2. employer surveillance policies 3. employee access to medical and personal records 4. drug testing policies 5. lie detector policies 6. ownership of computers and all issues unique to the electronic workplace 7. workplace dating policies

primary boycotts

A boycott against an employer with whom the union is directly engaged in a labor dispute.

franchise agreement

A contract whereby a company (the franchisor) grants permission (a license) to another entity (the franchisee) to use the franchisor's name, trademark, or copyright in the operation of a business and associated sale of goods in return for payment.

general power of attorney

A type of express authority that allows an agent to conduct all business for the principal.

Chapter 33

Agency Formation and Duties

Agency by Implied Authority

Agency formed by implication, through conduct of parties

employment discrimination internally

CRA 1991 extended VII and ADA to citizens working abroad for American employers or for foreign corporations controlled by a US employer, unless enforcement would violate foreign law

Employer-Employee Relationship

Employer hires employee to perform some sort of physical service employer responsible for the torts of their employees

Employer-Independent Contractor Relationship

Employer hires persons (other than employee) to conduct some sort of task; employer has no control over details of conduct of independent contractor

Omnibus Crime Control and Safe Streets Act of 1968

Employers cannot listen to private telephone conversations of employees or disclose the content of those conversations, Employers may ban personal calls and monitor calls for compliance, provided that they discontinue listening to any conversation once they determine it is personal, Violators subject to fines of up to $10,000.

Ch. 43

Employment Discrimination

Ch. 42

Employment and Labor Law

Fair Labor Standards Act (FLSA)

Federal law by congress that establishes a minimum wage and requirements for overtime pay and child labor

Workers' Compensation Laws

State statutes that establish an administrative process for compensating workers for injuries that arise in the course of their employment, regardless of fault. Must meet three criteria 1. they are an employee 2. injury occurred on the job 3. both employee and employer covered under state worker's compensation program employee must notify employer of injuries within 30 to 60 days system employs administrative adjudication for justice generally cover Rehabilitation expenses, Medical bills, Hospital bills and missed wages employees must contribute to unemployment fund once every year

immigration customs and enforcement (ICE)

The US Immigration and Customs Enforcement (ICE) enforces federal laws governing border control, customs, trade, and immigration to promote homeland security and public safety.

Franchisor

The owner of the trade name or trademark in a franchise. must give sufficient notice of termination of franchise agreement if requirements not being met by franchisee The franchisor takes a low risk in starting the franchise. The franchisor may require the franchisee to purchase certain supplies from the franchisor at a set price. can become liable for franchise obligations if it exerts too much control over the business operations of the franchise.

franchisee

The seller of goods or services under a trade name or trademark in a franchise.

sole proprietor

The single person at the head of a sole proprietorship.

agency relationships can be created on the basis of...

They can be formed by formal written contracts. They are consensual. They can be formed by informal oral agreements.

discrimination against smokers

Thirty states protect a smoker's right to smoke outside the workplace, other states however may fire or refuse to hire based on being a smoker

Drug-Free Workplace Act

U.S. law that requires federal contractors with contracts of $100,000 or more as well as recipients of grants from federal government of at least 25,000 to certify they are maintaining a drug-free workplace.

reasonable expectation of privacy

Under the ECPA, the protection afforded to individuals' communications against unauthorized surveillance or access; applies only minimally to communications via an employer's equipment.

cooperative

a business organization in which the members usually pool their resources together to gain some kind of advantage in the market

Joint stock company

a partnership agreement in which company members hold transferable shares while all the goods of the company are held in the names of the partners mixture of a corporation and a partnership

Pregnancy Discrimination Act of 1987

amended Title VII of CRA to expand the definition of sex discrimination to include discrimination based on pregnancy.

syndicate

an investment group that comes together for the explicit purpose of financing a specific large project

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

ensures that employees that lose their jobs or necessary hours will be able to continue receiving benefits under the employer's policy for up to 18 months by paying the premiums for the policy benefits do not arise if... 1. The employer decides to eliminate benefits for all current employees. 2. The employee is fired for gross misconduct.

principal-agent relationship

exists when an employer hires an employee to enter into contracts on its behalf

wagner act of 1935

explicitly encourages formation of labor unions and provide for collective bargaining between employers and unions as a means of obtaining peaceful settlement of labor disputes

laws governing employers

federal: provides a minimum level of protection for employees state: may provide employees more rights, but not less than they have under federal

General Partnership

for most purposes, partnership is not a legal entity, each partner has equal control and unlimited liability for partnership debts, profits are taxed as income for the partners A written partnership agreement is not required to form a partnership.

franchise termination

franchisor must: 1. documented the warnings given to the franchisee for violations of the franchise agreement 2. good cause

Disparate Treatment

if employee has been hired, fired, denied a promotion or the like on the basis of membership protected under VII, it is a form of intentional discrimination and qualifies to sue for disparate treatment discrimination proving is a three step process: 1. employee must demonstrate a prima facie (evidence is sufficient to raise a presumption that discrimination occurred) case of discrimination 2. employer must articulate a legitimate, nondiscriminatory business reason for the action 3. employee must show reason given by employer is a mere pretext

principal's liability and the independent contractor

individual who hires individual contractor cannot be held liable for contractor's tortious actions under doctrine of respondant superior unless contractor engages in hazardous activities principal held liable for agent as long as agent is acting within their authorized actions The tort liability of a principal can be established either directly or indirectly.

collective bargaining

negotiations between an employer and a group of employees to determine the conditions of employment

Civil Rights Act - title VII

prohibits discrimination based on race, color, religion, national origin or sex prohibits harassment based on same protected categories defenses to charge of discrimination under VII: - merit: hiring partially based on test scores 1. Criterion-related validity: statistical relationship 2. Construct validity: measures psychological trait 3. Content validity: isolates and directly tests a skill - seniority: 1. follows industry practices 2. did not have its origin in discrimination 3. applies equally to all persons 4. system maintained free of any illegal discriminatory practice - bona fide occupational qualification: employer allowed to discriminate based on sex, religion or national origin damages: - 2 years of payback - compensatory damages - punitive damages - attorney fees - court costs - court orders - remedial seniority

Occupational Safety and Health Administration of 1970 (OSHA)

responsible for setting safety standards, enforces acts through inspections and levying fines against violators criminal penalties can be imposed against an employer if willful violation results in the death of a worker

corporation

separate legal entity wherein the owners' liability is limited to the amount of their contribution and profits are taxed as income to the corporation sells ownership to investors

limited partnership

similar to general partnerships but their liability is limited to the extent of their capital contributions

filing claim under VII

step 1: file a charge includes the name of the charging party, the name(s) of the defendant(s), and the nature of the discriminatory act step 2: EEOC conciliation attempts can issue right-to-sue letter which allows plaintiff to file for private action

Sole Proprietorship

the owner has total control and unlimited personal liability. Profits taxed directly as personal income to the sole proprietor. Fewer legal formalities to form

agency

the relationship between principal and agent

Limited Liability Company (LLC)

unincorporated form of business organization that combines tax benefits of and management flexibility of a partnership with the limited liability of a corporation has members(owners) To obtain limited liability, a member does not have to relinquish his or her right to participate in management. operating agreement: foundational contract among the entity's owners.

substantial departure

"frolic of his own" employer is not held liable (unless deviation was not substantial) ex: delivery driver getting coffee and hitting someone in line

Beneficiaries

(1) A person who can expect to benefit from a relationship (2) A person who receives, or will receive, the proceeds from an insurance policy or a will.

Constructive Trust

(1) An implied trust in which a party is named to hold the trust for its rightful owner (2) An equitable trust imposed on someone who wrongfully obtains or holds legal right to property he or she should not possess. only for property. principal has first right of refusal

duties of principal

- Duty of compensation: A principal's obligation to pay an agent for his or her services. - Duty of reimbursement and indemnification - Duty of cooperation - Duty of safe working conditions if not followed, agent can sue for contract or tort remedies. can also refuse to act on behalf of principal until damages are resolved.

termination by acts of parties

- Lapse of Time - Fulfillment of Purpose - Occurrence of Specific Event - Mutual Agreement - Revocation of Authority - Renunciation By Agent

termination by operation of law

- death - insanity - bankruptcy - change in circumstances - change in law - impossibility of performance - disloyalty of agent - war

rights and remedies of the principal

-constructive trust -avoidance: ability to nullify any contract the agent negotiated if agent breaches their contract or duties -indemnification: recover amount assessed to third party if causing breach was due to agent's negligence

durable power of attorney

A document which specifies that an agent's authority is intended to continue beyond the principal's incapacitation.

picketing

A labor activity in which individuals place themselves outside an employer's place of business for the purpose of informing passersby of the facts of a labor dispute.

limited partnership (LP)

A partnership consisting of at least one general partner and at least one limited partner in which the general partners assume all liability for the partnership's debts and the limited partners assume no responsibility beyond their originally invested capital.

limited liability partnership (LLP)

A partnership in which all the partners assume liability for any partner's professional malpractice to the extent of the partnership's assets.

undisclosed principal

A principal whose existence is not known by a third party. That is, the third party does not know that an agent is acting on behalf of a principal. agent is held liable to the third party principal is liable to the agent unless: - contract excludes principal - contract is a negotiable instrument - agent knows that revealing the principal's identity would lead third party to not enter into a contract - third party enters into a contract with the agent such that the agent's performance is required and the third party may reject the performance of the principal.

disclosed principal

A principal whose identity is known to a third party. The third party is aware that the agent is making an agreement on behalf of the principal. principal is liable to third party

partially disclosed principal (unidentified principal)

A principal whose identity is not known by a third party, although the third party is aware that the agent is making an agreement on behalf of a principal. principal is typically held liable, agent may be held liable for contractual nonperformance

unemployment compensation

A system of government payments to people who are out of work and looking for a job. created by federal unemployment tax act (FUTA) unemployment system managed by the states

Special Power of Attorney

A type of express authority that allows an agent to act on behalf of the principal only in regard to specifically outlined acts.

expressed agency

Agency formed by making written/oral agreement

Agency by Estoppel (Apparent Agency)

Agency formed when principal leads third party to believe that another individual serves as his/her agent (although principal had actually made no agreement with purported agent)

agency by ratification

Agency that exists when individual misrepresents himself/herself as agent for another party, and principal accepts/ratifies unauthorized act 1. individual must misrepresent themself as agent for another party 2. principal must accept/ratify the entirety of the unauthorized act

Family and Medical Leave Act 1993 (FMLA)

Allows employees of government agencies and companies to take up to three months of unpaid leave during or after a pregnancy. for pregnancy leave mother must notify employment at least 30 days prior to the birth requires employers to return employees to same or very similar position when returning from leave. If unable to return employer no longer holds responsibility if employer fails to comply employee can recover attorney fees, benefits lost, unpaid salary, denied compensation, and monetary loss equivalent to 12 weeks of pay must have 50 of greater employees to be eligible

Agency by Agreement (Express)

An agency created in a written or oral agreement.

agency coupled with an interest

An agency relationship that is created for the benefit of the agent, not the principal. does not allow the principal to terminate it principal dismissed when they have performed their duty

implied-contract exception

An exception to the employment at-will doctrine which provides that an implied employment contract may arise from statements the employer makes in an employment handbook or materials advertising the position.

public policy exception

An exception to the employment-at-will doctrine that prohibits employers from firing employees for doing something that is consistent with furthering public policy. protects whistle-blowing, serving on jury duty, doing military service, filing for or testifying at worker's compensation claims

signal picketing

An unprotected form of picketing in which services and/or deliveries to the employer are cut off.

business trust

Business organization governed by group of trustees, who operate trust for beneficiaries The trustees and beneficiaries of a business trust enjoy limited liability. trustees: (1) In a bankruptcy proceeding, an individual who takes over administration of a debtor's estate. (2) A person who operates a business trust for beneficiaries.

Oncale v. Sundowner Offshore Service, Inc.

Court ruling that same-gender harassment is actionable under Title VII.

National Labor Relations Board

Created by the Wagner Act, administrative agency, interprets and enforces NLRA and provides for judicial review in designated federal courts of appeal

Defense of Marriage Act (DOMA) of 1996

Declares that states are not obligated to recognize any same sex marriages that might not be legally sanctioned in other states, defined marriage and spouse in heterosexual terms for federal law. Overturned in 2015

power of attorney

Document giving agent authority to sign legal documents on behalf of principal often given for health care and business purposes

Immigration Reform and Control Act of 1986

Federal law requiring employers to verify and maintain records on applicants' legal rights to work in the United States good faith effort to ensure employees legally permitted to work in the US

Employee Retirement Income Security Act (ERISA) of 1974

Federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related pension and health plans in private industries

agency relationship

Fiduciary relationship in which agent acts on behalf of principal They can be formed by formal written contracts. They are consensual. They can be formed by informal oral agreements. cannot be formed by those without capacity do not normally need to be in writing with the exception of 1. when agent enters into contract required to be in writing under statue of fraud 2. when agent is given power of attorney

Ch. 35

Forms of Business Organization

was never an intended party to the contract

If a principal is disclosed, an agent who exceeds her authority cannot be sued for breach of contract because he or she: Blank______.

actual notice

Notice of agency termination that is given by directly informing third parties, either orally or in writing.

constructive notice

Notice of agency termination that is usually given by publishing an announcement in a newspaper.

equal pay act of 1963

Prohibits an employer from paying workers of one gender less than wages paid to employees of opposite gender for work that requires equal skill, effort, and responsibility ways to legitimize unequal pay: - The extra duties are substantial, as opposed to inconsequential. - The extra duties are available on a nondiscriminatory basis. - extra duties actually performed by those receiving extra pay - extra duties regularly constitute a significant portion of the employee's job - extra duties are commensurate with the pay differential defenses against EPA: - bona fide seniority system - bona fide merit system - pay system based on quality or quantity of output - factors other than sex

agreement is terminated

What happens when an agent acquires interests that conflict with the principal?

restatement of agency

Which of the following is a recognized source for the definition of agency?

Landrum-Griffin Act of 1959

governs the internal operations of labor unions contains "labor's bill of rights" protects employees from their own unions requires certain financial disclosures by unions and establishes civil and criminal penalties for financial abuses by union officials.

Uniform Partnership Act (UPA)

governs voluntary associations between two or more people who co-own a business for profit in most states in the absence of an express agreement.

sexual harassment

unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that implicitly or explicitly makes submission a term or condition of employment, creates hostile or intimidating work environment two types of harassment: - hostile-environment 1. suffered intentional unwanted discrimination based on sex 2. harassment was sever or pervasive 3. harassment negatively affected terms, privileges or conditions of the work environment 4. Harassment was both subjectively and objectively unwanted 5. management knew of harassment or should have known of harassment and did nothing to stop it - quid pro quo

If a third party successfully demonstrates that he or she reasonably believed there was an actual agency relationship between two persons that had an apparent agency, then the principal must: _______.

uphold any agreements made by the agent