Acct 324 exam 3 ch.33, 34,35,42,43

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.

agency by ratification it has 2 requirements

1. an individual must misrepresent their identity as an agent for another party 2. the principal must accept or ratify the unauthorized act. 3. the principal must have complete knowledge of all materials regarding the contract 4. the principal must ratify the entirety of the agent's act

as long as these two criteria are met, 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

If an agent has misrepresented herself, the third party has two options

1. cancel the contract with the principal and be compensated for any money lost. 2. affirm the contract and sue the principal to recover damages

three types of validation are acceptable:

1. criterion-related validity- is the statistical relationship between test scores and objective criteria of job performance 2. content validity- isolates some skill used on the job and directly tests that skill 3. construct validity- wherein a psychological trait needed to perform the job is measured

Disparate Impact

A form of discrimination that arises when an employer's policy or practice appears to apply to everyone equally but its actual effect is that it disproportionately limits employment opportunities for a protected class. - occurs when an employer sets a requirement for employment that inadvertently precludes large numbers of a protected class from employment in a particular job

Disparate Treatment

A form of intentional discrimination in which an employee is hired, fired, denied a promotion, or the like, on the basis of membership in a protected class. - it occurs when an employee is treated differently on the basis of being a member of a protected class (i.e, race, religion, sex, national origin, or color)

Renunciation by the agent

An agent can terminate the agency relationship by renouncing the authority given him or her. The agent can be liable for breach of contract if the agency agreement stated a specific amount of time that the relationship is to exist.

collective bargaining

The process whereby workers organize collectively and bargain with employers regarding the conditions of employment.

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.

to exercise rights under FMLA

an employee whose need is foreseeable (such as childbirth) must advise the employer at least 30 days before the leave needs to begin. - if the leave is unforeseeable, the employee must give notice as soon as practicable, defined as within one or two business days after the need becomes known

Harassment in cyberspace

employers have a duty to monitor their employees' use of email and the internet. they cannot allow harassment, including retaliatory harassment on an online bulletin board. employers can reduce their liability exposure by conducting sexual harassment training and outlining clear workplace policies that prohibit harassing behavior, including behavior that takes place in cyberspace.

actual notice

must be given to third parties who have had business interactions with the agent; it directly informs them, orally or in writing, that the agency agreement has terminated

members

owners of a limited liability company

Termination of Agency Relationship

parties may choose to terminate an agency relationship, or it may terminate automatically by the lapse of time, fulfillment of purpose, or operation of law - if the relationship has ended, the agent no longer has authority to make agreements on behalf of principal, however, the agent's apparent authority continues until the principal notifies third parties that the relationship has ended

Constructive Notice

parties not directly related to an agent agreement may receive a ___, which is how termination of an agency agreement is generally announced. - usually consists of publication in a generally circulating newspaper for the area where the agency agreement is existed

Federal Unemployment Tax Act

passed in 1935, created a state system to provide unemployment compensation to qualified employees who lose their jobs. - employers pay taxes to the states, which deposit the money into the federal government's unemployment insurance fraud - each state has an account from which it can access money in accordance with state eligibility rules

duty to provide safe working conditions

the principal has a duty to provide safe working conditions for the agent, including equipment and premises. a principal aware of unsafe working conditions has a duty to warn the agent and make necessary repairs - federal and state statutes, such as the occupational safety and health act (OSHA), set specific standards for the working environment - employers that violate these standards may be subject to fines

Principal's Duties to Agent

the principal owes certain duties to the agent. if these duties are not fulfilled, the principal has violated the agent's rights and the agent can sue for contract or tort remedies. - the agent can also refuse to act on behalf of the principal until the failure is remedied

Agency laws are relevant to 3 types of business relationships:

the principal-agent relationship, the employer-employee relationship, and the employer-independent contractor relationship

Vicarious Liability

the principal/employer holds ___, which is liability assigned without fault for any harm the agent/employees causes while working for the principal - the principal/employer is liable not because he was personally at fault but because he negligently hired an agent. - the rationale is that if the employer is benefiting by the work of the employee, the employer should also be responsible for the harms the employee caused

Disclosed Principal

when the third party is aware that the agent is making an agreement on behalf of a principal and also knows who the principal is, the principal is a

S corporation

which is a corporation under federal tax law but is taxed like a partnership as long as it follows certain regulations - cannot have more than 100 shareholders - its income is taxed when earned - shareholders must report the income on their personal income tax forms - are formed under state law

most important amendments are COBRA and HIPAA

which provides important new protections for working Americans and their families who have preexisting medical conditions or might otherwise suffer discrimination in health coverage based on factors that relate to the individual's health - ERISA does not apply to health plans for government or church employees or to plans maintained to comply with disability, workers' compensation, or unemployment laws - under graduated vesting, an employee must be at least 20 percent vested after 2 years, 40 percent after 3 years, 60 percent after 4 years, 80 percent after 5 years, and 100 percent after 6 years

The NLRB has jurdisction over all employees except those

who work in federal, state, and local government and those covered by the railway labor act; independent contractors, agricultural workers; household domestics; persons employed by a spouse or parent; and supervisors, managerial employees, and confidential employees

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.

two distinct forms of sexual harassment are recognized

- 1st and generally easiest to prove, is quid pro quo, which occurs when a supervisor makes a sexual demand on someone and this demand is reasonably perceived as a term or condition of employment. the basis for this rule is that the supervisor would not make similar demands on someone of the same sex - 2nd involves the creation of a hostile work environment, has evolved over the years through a series of statutes and cases.

consequences of being a separate legal entity

- 1st the corporation can be sued and can be held liable for its debts, shareholders cannot - liability is usually limited to the amount they have invested in their share purchases, which supplies the company with capital - 2nd the corporation is not dissolved when shareholders die -3rd the corporation must pay taxes on its profits, and its shareholders must pay taxes on dividends they receive from ti

disadvantage of franchisor

- can become liable for the franchise if it exerts too much control - has little control over the franchise

when may an employee be fired?

- during the 18th and 19th centuries in the United States, employees had no protection in the workplace. - today an employee who is not employed under a contract or a collective bargaining agreement is considered to be an at-will employee - this means that the employee may quit at any time for any reason or no reason at all, with no required notice to the employer. - similarly, an employer may fire the employee at any time, with no notice, for almost any reason, the exception to the at-will rule is that an employer may not fire an employee for an illegal reason, any termination based on a violation of a state statute, a state constitution, a federal law, the US constitution, or public policy is illegal.

advantage of franchisor

- earns increased income from the franchise - takes low risk in starting a franchise

key reasons for the rapid acceptance of limited liability companies

- is not required to allocate profits and losses in proportion to ownership interests; nor is it required to hold an annual meeting and draft meeting minutes, so record keeping is simpler and more flexible - does not give up his or her right to participate in management of the LLC - is the flexibility it offers members in terms of alternative ways to structure its management - is the IRS generally treats it like a partnership or sole proprietorship - is that members need not to be citizens or permanent residents of the US

Key sections of the Wagner Act

- section 7, which provides, "employees shall have the right to self-organization, to join, form or assist labor organizations, to bargain collectively through representatives of their own choosing, and engage in concerted activities for the purpose of collective bargaining or other mutual aid and protection - section 8a which specifies the actions that are prohibited as employer unfair labor practices - also created an administrative agency, the national labor relations board, to interpret and enforce the NLRA, it provides judicial review in designated federal courts of appeal

Advantages of Partnership

- the partners, each considered an agent of the partnership, are generally not required to create an official or even a written agreement to establish it - the partnership is not considered a legal entity, income from the business is taxed as individual income from each partner - partners can also deduct business losses from their taxable income

To establish employer liability, the third party must show that the wrongful act occurred within the scope of the employment ______.

1. did the employer authorize the employee's act? 2. did the act occur within the time and space limits of employment? 3. was the act performed, at least in part, on behalf of the employer? 4. to what extent were the employer's interests advanced by the act? 5. to what extent were the private interests of the employee involved? 6. did the employer provide the means (tools) by which the act occurred? 7. did the employee use force not expected by the employer? 8. did the employer known that the act would include the commission of a serious crime?

Employer privacy policies should cover the following issues:

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

Bargaining collectively in good faith means that the parties must ______.

1. meet at reasonable times and confer in good faith 2. sign a written agreement if one is reached 3. when intent on terminating or modifying an existing contract, give 60 days' notice to the other party, with an offer to confer over proposals, and give 30 days' notice to the federal or state mediation services in the event of a pending dispute over the new agreement 4. neither strike nor engage in a lockout during the 60 day notice - an employer who fails to bargain in good faith is committing an unfair labor practice under section 8a - the most common violation by a union s bargaining for clauses that fall outside the scope of mandatory bargaining.

providing disparate-treatment discrimination in employment under title VII is a three-step process:

1. plaintiff (the employee) must demonstrate a prima facie case of discrimination 2. defendant (the employer) must articulate a legitimate, nondiscriminatory business reason for the action. 3. plaintiff (the employee) must show that the reason given by the defendant (the employer) is more pretext. - prima facie case of discrimination. prima face is latin for "at first view" and means that the evidence is sufficient to raise a presumption.

Under ERISA, employers must provide participants with all of the following:

1. plan information 2. assurance that those in charge of managing plan assets have fiduciary responsibility. 3. a grievance and appeals process for participants to get benefits from their plans. 4. the right to sue for benefits and breaches of fiduciary duty

agency agreements usually do not need to be in writing, with two important exceptions

1. the agreement must be in writing whenever an agent will enter into a contract that the statute of frauds requires to be in writing 2. the agreement must be in writing whenever an agent is given power of attorney

in certain situations, the agent is the only liable party for the contract. these situations include

1. the contract expressly excludes the principal from the contract. 2. the agent enters into a contract that is a negotiable instrument. 3. the 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. 4. the principal or the agent knows a third party would not enter into a contract with the principal if the principal's identity were disclosed but the agent does so anyway.

For instance, an implied contract can arise if

1. the employment handbook contains the steps for progressive discipline leading to discharge 2. the handbook makes no mention of words employment at will 3. the employee relies on that handbook

to prove such harassment, a plaintiff must demonstrate the following

1. the plaintiff suffered intentional, unwanted discrimination because of the plaintiff's sex. 2. the harassment was severe or pervasive 3. the harassment negatively affected the terms, conditions, or privileges of the plaintiff's work environment 4. the harassment was both subjectively and unobjectively unwelcome. 5. management knew about the harassment, or should have known, and did nothing to stop it

agency relationships can be formed if and only if

1. they are being created for a lawful purpose 2. the person who is to act as an agent has contractual capacity

primary boycott

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

Franchise

A business arrangement between an owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark.

Business Trust

A business organization governed by a group of trustees who operate the trust for beneficiaries. - a written trust agreement establishes the duties and powers of the trustees and the interest of beneficiaries - in a corporation, the trustees and beneficiaries enjoy limited liability, and in most states business trusts are taxed like corporations

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. - may occur as part of a strike or independently - is designed to truthfully inform the public of a labor dispute between an employer and the employees

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. - is a mix of corporation and partnership

limited partnership

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 partnerships' debts and the limited partners assume no responsibility beyond their originally invested capital - if a limited partner dies, the limited partnership is usually unaffected. if a general partner dies, however, the limited partnership is dissolved

boycott

A refusal to deal with, purchase goods from, or work for a business. like a strike, it is a technique for prohibiting a company from carrying on its business so that it will accede to the union demands

Workers' Compensation Laws

A state law that provides for financial compensation to employees or their dependents when the covered employee is injured on the job. - ensure that covered workers injured on the job can receive financial compensation through an administrative procedure, rather than having to sue their employer

strike

A temporary, concerted withdrawal of labor. it is the most powerful weapon employees use to secure recognition and improve their working conditions, but it is also potentially the most dangerous

chain-style business operation

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. ex. McDonalds, Burger King

Distributorships

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

manufacturing agreement

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

fulfillment of purpose

Agent's authority to perform a specific terminates when the agent performs the act or achieves the result.

National Labor Relations Board (NLRB)

An administrative agency created by the Wagner Act to interpret and enforce the National Labor Relations Act (NLRA). three primary functions are - monitor the conduct of the employer and the union during an election to determine whether workers want to be represented by a union - prevent and remedy unfair labor practices by employers or unions - establish rules interpreting the act

apparent agency or agency by estoppel

An agency relationship created by operation of law when one party, by her actions, causes a third party to believe someone is her agent even though that person actually has no authority to act as her agent.

joint venture

An association between two or more parties wherein the parties share profits and management responsibilities with respect to a specific project. - relationship may entail financing, producing, and selling goods, securities, or commodities. - usually share the profits and losses equally - can be agreements between small or very large businesses - is not automatically terminated when one of the members dies, is usually terminated when all the stock has been sold or at the discretion of the members - less authority then general partners bc they are not agents of the other members - share equal management of the task for which they come together

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. - because there is no clear agreement on what constitutes fair treatment of an employee, most states do not use this exception

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. - protected activities vary among states and include but are not limited to, serving on jury duty, doing military service, filing for or testifying at hearings for workers' compensation claims, and whistle blowing

secondary boycott

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.

Synidcate

An investment group that comes together for the explicit purpose of financing a specific large project. - are often used to purchase professional sports teams and are quite for their ability to raise large amounts of money in a short time - usually considered a type of joint venture; thus they are almost always governed by partnership law

shareholder

An investor who holds stock in a corporation, and thus is an owner of the corporation. - elect a board of directors, which is responsible for managing the business

Limited Liability Company (LLC)

An unincorporated business that is taxed like a partnership, with the members paying personal income taxes, but has the limited liability of a corporation. - combines tax advantages and management flexibility of a partnership with the limited liability of a corporation

signal picketing

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

Harassment by Non-employees under Title VII

Employers may be held liable for harassment of their employees by non-employees under very limited circumstances. If an employer knows that a customer repeatedly harasses an employee yet the employer does nothing to remedy the situation, the employer may be liable.

Family and Medical Leave Act

Federal act requiring that employers provide all eligible employees with up to 12 weeks of leave during any 12-month period for several family-related occurrences (e.g., birth of a child, adoption, care of a sick spouse). - went into effect in 1993 - guarantees all employees who have worked at least 25 hours of the week for each of months

The civil rights act of 1964

Federal law (as amended by the Civil Rights Act of 1991) that protects employees against discrimination based on race, color, religion, national origin, and sex; also prohibits harassment based on the same protected categories.

Pregnancy Discrimination Act of 1978

Federal law that amended Title VII of the Civil Rights Act of 1964 by expanding the definition of sex discrimination to include discrimination based on pregnancy. - under the act, temporary disability caused by pregnancy must be treated the same as any other temporarily disability

Electronic Communications Privacy Act (ECPA) of 1986

Federal law that extended employees' privacy rights to electronic forms of communication including email and cell phones; outlaws the intentional interception of electronic communications and the intentional disclosure or use of the information obtained through such interception.

Landrum-Griffin Act

Federal law that primarily governs the internal operations of labor unions. It requires financial disclosures by unions, establishes penalties for financial abuses by union officials, and includes "Labor's Bill of Rights" to protect employees from their own unions.

Equal Pay Act of 1963

Federal law that prohibits an employer from paying workers of one gender less than the wages paid to employees of the opposite gender for work that requires equal skill, effort, and responsibility.

Americans with Disabilities Act

Federal law that prohibits discrimination against employees and job applicants with disabilities.

Age Discrimination in Employment Act of 1967

Federal law that 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.

Employee Retirement Income Security Act

Federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. - has been amended several times

Consolidated Omnibus Budget Reconciliation Act

Federal law which ensures that when employees lose their jobs or have their hours reduced to a level at which they would not be eligible to receive medical, dental, or optical benefits from their employer, the employees will be able to continue receiving benefits under the employer's policy for up to 18 months by paying the premiums for the policy. COBRA benefits do not arise under either or two conditions - the employee is fired for gross misconduct - the employer decides to eliminate benefits for all current employees - employers who fail to comply with the law may be required to pay up to 10 percent of the annual cost of the group plan or $500,000, whichever is less

Fair Labor Standards Act

Federal law which requires that a minimum wage of a specified amount be paid to all employees in covered industries; also mandates that employees who work more than 40 hours in a week be paid no less than 1½ times their regular wage for all hours beyond 40 worked in a given week. - 4 categories of employees are excluded: executives, administrative employees, professional employees, outside salespersons

Taft-Hartley Act

Federal legislation designed to curtail some of the powers that unions had acquired under the Wagner Act; designates certain union actions as unfair. Also called Labor-Management Relations Act. - section 8a of the Wagner act designated certain employer actions as unfair - section 8b of the taft Hartley act designated certain union actions as unfair

Omnibus Crime Control and Safe Streets Act of 1968

Federal statute that prohibits employers from listening to the private telephone conversations of employees or disclosing the contents of these conversations. Employers may ban personal calls and monitor calls for compliance as long as they discontinue listening to any conversation once they determine it is personal.

unauthorized acts

If an agent has no authority to act on behalf of a principal but still enters into a contract with a third party, the principal, regardless of the classification, is not bound to the contract unless the principal ratifies the agreement. - when the agent exceeds his authority to act on behalf of the principal, the agent will likely be personally liable to the third party. - agents who go beyond their authority when the principal is disclosed or partially disclosed are liable for a breach of implied warranty, they cannot be liable for breach of a contract because they were never an intended party to the contract, even when exceeding their authority.

Immigration Reform and Control Act

The Immigration Reform and Control Act was passed in order to control and deter illegal immigration to the United States. Its major provisions stipulate legalization of undocumented aliens who had been continuously unlawfully present since 1982, legalization of certain agricultural workers, sanctions for employers who knowingly hire undocumented workers, and increased enforcement at US borders.

Immigration and Customs Enforcement

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

employee at will doctrine

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

at-will employment

The employment relationship that exists when employers can hire any employee they choose and dismiss an employee with or without cause at any time. Employees can also elect to work for the employer or to terminate the relationship anytime they desire to do so. - applied in all states with no exceptions until 1959

Wagner Act

The first major piece of federal legislation adopted explicitly to encourage the formation of labor unions and provide for collective bargaining between employers and unions as a means of obtaining the peaceful settlement of labor disputes.

Franchisor

The owner of the trade name or trademark in a 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.

unemployement compensation

The state system, created by the Federal Unemployment Tax Act, that provides unemployment compensation to qualified employees who lose their jobs.

sexual harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that makes submission a condition of employment or a factor in employment decisions or that creates an intimidating, hostile, or offensive work environment. The two types are hostile environment and quid pro quo.

Damages under Title VII

Up to two years of back pay, compensatory damages, punitive damages (limited in some cases), attorney fees, court costs, court orders (including reinstatement), and remedial seniority - if the jury finds in favor of the defendant-employer, the plaintiff-employee receives nothing.

Employer-Employee Relationship

Whenever an employer hires an employee to perform some sort of physical service ___, in which the employee is subject to the employer's control - all employees are considered agents of the employer, even those not legally authorized to enter into contracts binding their employer or to interact with third parties - not all agents are employees

Sole Proprietorship

a business organization in which you, as the sole proprietor, are in sole control of the management and the profits - requires very few legal formalities - has complete control of the management of the organization, with freedom to hire employees, - determine business hours, and expand or change the nature of the business - keeps all the profits from the business - you are personally liable for any losses or obligations associated with the business, you can be sued - are terminated automatically when the sole proprietors dies

respondent superior

a latin phrase meaning "let the superior speak" applies in the context of the principal/employer-agent/ employee relationship

Corporation

a legal entity formed by selling shares of stock to investors, who then become shareholders and the owners of the company

revocation of authority

a principal can be revoked at any time, such revocation might constitute a breach of contract with the agent, leaving the principal for damages. - if the agent has somehow breached the fiduciary duty to the principal, however, the principal can revoke the agent's authority without liability

War

a principal has agent in Iran authorized to conduct business dealings on the principal's behalf. If the United States goes to war with Iran, this agency relationship will no longer be in existence because there is no way to enforce the rights of the parties

Principal's Tortious Conduct

a principal who directs the agent to commit a tort is authorizing the agent's unlawful behavior and thus is liable for any damages caused by the tort. the principal who ratifies an agent's tortious act knowing that the agent acted illegally is liable, even if principal does not condone the agent's conduct

power of attorney

a special type of express agent authority, is a specific form of express authority , usually in writing , granting an agent specific powers

Indemnification

a third party believes that an agent is acting with actual or apparent authority may sue the principal for any breach of contract. however, if the breach was caused by the agent's negligence, the principal has a right to indemnification; that is, when sued by a third party, a principal may sue the agent to recover the amount assessed to the third party

Parterniship

a voluntary association between two or more persons who co-own a business for profit - in a few states, a partnership is not considered a separate legal entity and is dissolved when any partner dies - the Uniform Partnership Act governs partnerships in most states in the absence of an express agreement

durable power of attorney

a written document expressing his or her wishes for an agent's authority not to be affected by the principal's subsequent incapacity - might become active only after a principal becomes incapacitated in any matter - specifies that the agent's authority is intended to continue beyond the principal's incapacitation

mutual agreement by the parties

agency is a consensual agreement between two parties - cancel the agreement and terminate the relationship

Constructive Trust

agency relationship exists primarily for the benefit of the principal. therefore, principles are the legal owners of anything an agent may come to possess through the employment or agency relationship - when an agent illegally benefits from the agency relationship, the principal may enact a ___, on the profits, goods, or property in question

Creation of Agency Relationship

agency relationships are consensual relationships formed by informal oral agreements or formal written contracts. 2 criteria for the creation of agency relationships - 1. like contracts, they can be created only for a lawful purpose; thus a principal could not hire an agent to kill someone on the principal's behalf -2. almost anyone can act as an agent; however, an individual who does not have contractual capacity, such as a minor, cannot hire an agent to make contracts on the minor's behalf

demand for accounting

agents who feel they are not being properly compensated, especially when working on commission, may demand an accounting and may withhold further performance of their duties until the principal supplies appropriate accounting data

limited liability partnership

all the partners assume liability for one partner's professional malpractice, but only to the extent of the partnership's assets; the other partners' personal assets cannot be taken - each partner is liable for own negligence and the negligence of those that she supervises

general power of authority

allows the agent to conduct all business for the principal

Disloyalty of Agent

an agency agreement is terminated whenever the agent, unknown to the principal, acquires interest against the principal's interest. - it is also terminated if the agent breaches the duty of loyalty he or she has to the principal

Agency by Implied Authority

an agency relationship is not created by an express agreement but is instead implied by the conduct of the parties - implied authority cannot conflict with any express authority

Authorized Acts

an agent who acts within the scope of her authority on behalf of a disclosed or partially disclosed principal is not liable for the acts of the principal. the principal is liable only if the agent has authority to act on the principal's behalf

Tort liability and the agency relationship

an agent who commits a tort that injures a third party is personally liable for his or her actions, regardless of both the classification and the liability of the principal. the principal may also be held liable for the agent's authorized or unauthorized acts. furthermore, tortious liability of the principal can be established directly or indirectly.

Independent Contractor

an independent contractor is not an employee of the individual who hires him or her to do the work. the individual doing the hiring does not control the details of the independent contractor's performance. - an individual who hires an independent contractor cannot be held liable for the independent contractor's tortious actions under the doctrine of respondeat superior - if the independent contractor engages in extremely hazardous activities, such as blasting operations, for the principal, the principal will be responsible for any damages by independent contractor

agent's duties to the principal

because the agent makes agreements on behalf of the principal in a fiduciary relationship of trust and confidence, he or she can also harm the principal - suppose an agent makes numerous contracts the principal could not possibly carry out all at once. the third parties may sue the principal for not carrying out the agreements. - if the agent breaches their duties, the principal can sue the agent and may be entitled to a variety of contract and tort remedies beyond those stated in the contract

Title VII

deals with discrimination in employment - prohibits employers from hiring, firing, or otherwise discriminating in terms and conditions of employment and prohibits segregation employees in a manner that would affect their employment opportunities on the basis of their race, color, religion, sex, or national origin - applies to employers who have 15 or 20 employees for 20 consecutive weeks within one year and who are engaged in a business that affects commerce

bonafide occupational qualification

defense allows an employer to discriminate in hiring on the basis of sex, religion, or national origin (but not race or color) when doing so is necessary for the performance of the job

Occurrence of a specific event

depending on its purpose, an agency relationship can be terminated on the occurrence of a specific event - once the sale is final the agency relationship will terminate

federal laws governing employers

employees are protected in the workplace by a number of both federal and state laws. federal laws apply to everyone in the United States. federal law may be described as a "minimum" level of protection for all workers. state laws may give employees more, but not less, protection than federal laws.

advantages and disadvantages of workers' compensation

employees benefit from workers' compensation laws because with very little effort they receive an almost certain recovery when injured, although the amount is less than they would have received from a successful negligence case against their employers. employers must pay into the worker's compensation fund every year, but they thereby ensure that their employee injury costs are fixed and they will not have to pay a huge negligence award to an injured employee because workers' compensation is the employee's exclusive remedy

when their FMLA terminates

employees must be restored to the same position they held, or one with substantially equivalent skills, effort, responsibility, and authority. if an employee is unable to return at the end of the 12-week period, the employer need not hold the position open any longer

drug testing in the workplace

employers that receive federal financial assistance or have federal contracts worth over $25,000 must develop an antidrug policy for employees, provide drug-free awareness programs for them, and warn them of penalties for violating company drug policies - private employers engaged in drug testing are not limited by the US Constitution as are public employers, but they still need to be aware of state statutory and constitutional limits

Powers of Attorney

establishes an agency by agreement that gives an agent authority to sign legal documents on behalf of the principal - are often given for business and health care purposes

Termination of Franchise

franchise agreement establishes how the franchise will be terminated, the business is usually established for a trial period such as a year. if the franchise does not meet the requirements in the agreement, the franchisor can terminate it but must give sufficient notice. - also usually must have cause. - the franchisor needs to have documented the warnings sent to the franchise regarding violations - the typical agreement gives the franchisor broad authority to terminate

general power of attorney

grants broad authority, while a specific power of attorney gives authority only for the specific areas or purposes listed in the agreement

Special Power of Attorney

grants the agent express authority over specifically outlined acts

Employee or Independent Contractor

has important implications because the employer-employee relationship is subject to the worker's compensation, workplace safety, employment discrimination, and unemployment statutes, while the employer-independent contractor relationship is not - employers are generally liable in tort for actions of their employees - most important consideration is employer control, if the employer has the right o substantially control the worker's day-to-day operations, the worker is generally is considered an employee - the IRS needs to determine when people are employees and when they are independent contractors because of different tax liabilities employers face, when the IRS determines an independent contractor is really an employee, the employer becomes liable for all applicable taxes - is also determines who owns the output of the work of the project

National Labor Relations Act

has issued a number of rulings involving questions about social media policies. they have indicated that these cases are extremely fact-specific and have provided the following general guidance - employer policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees - an employee's comments on social media generally not protected if they are mere gripes not made in relation to group activity among employees

Uniform Guidelines on Employee Selection Procedures

have guided government agencies charged with enforcing civil rights, and they provide guidance to employers and other interested persons about when ability tests are valid and job-related. - tests must be validated by American Psychological Association

Penalties under OSHA

if OSHA inspectors find violations in the workplace, they may issue citations. penalties for violations may range from $0 to $70,000 per violation, depending on the likelihood that the violation would lead to serious injury to an employee. penalties may reduced if an employer has a small number of employees, has demonstrated good faith, or has few or no previous violations. if a willful violation results in the death of a worker, criminal penalties may be imposed

Insanity

if a principal or agent becomes insane, the agency relationship is finished. - some states have modified this law so that agency contract still exists unless the person has been adjudicated insane

lapse of time

if an agency agreement specifies that the relationship will exist for a certain amount of time, it will end when that time expires

Crime and Agency Relationships

if an agent commits a crime, clearly the agent is liable for the crime. if the agent commits the crime in the scope of employment for a principal without the principal's authorization, the principal is not liable for the agent's crime - one of the elements establishing that crime has been committed is intent - if a principal is unaware or had no intent for the agent to commit a crime, there is no rationale for the principal's criminal liability - the only time the principal can be liable for crime of an agent is when the principal has authorized criminal act

premise rule

if an employee is on company property, the courts generally find that she was on the job

Remedies for violations of FMLA

if an employer fails to comply with FMLA, the plaintiff may recover damages for unpaid wages or salary, lost benefits, denied compensation, and actual monetary losses up to an amount equivalent to the employee's wages for 12 weeks, as well as attorney fees and court costs. if the plaintiff can prove bad faith on the part of the employer, double damages may be awarded. an employee may also be entitled to reinstatement or promotion

change circumstances

if an unusual change in circumstances leads the agent to believe that the principal's instructions do not apply, the agency relationship terminates

Impossibility

if the agent loses qualifications needed to perform duties for the principal, the agency relationship also ends because of impossibility

Bankruptcy

if the principal or agent files bankruptcy petition, the agency relationship is generally no longer in existence, particularly if the agent is filing for bankruptcy and the agent's credit is important to the agency relationship. - insolvency, the inability to pay debts or the condition in which liabilities outweigh assets, does not necessarily result in the termination of the agency relationship

Death

if the principal or the agent dies, the agency relationship is automatically terminated. even if one party is unaware of the other party's death, the relationship no longer exists

Undisclosed Principal

if the third party does not know that an agent is acting on behalf of a principal

right of indemnification

if the third party is able to establish employee negligence such that the employer is liable, the employer has the right to recover from the employee any damages paid to the third party as a result of the employee's negligence. the right to recover damages is referred to as the, however, if the employee is innocent of negligence, the employer is also free of liability.

Partially Disclosed Principal or unidentified principal

if the third party is aware of the principal's existence but not his or her identity, we classify the principal as a

Fiduciary

is a person who has a duty to act primarily for another person's benefit

agency coupled with an interest

is a special kind of agency relationship created for the agent's benefit, not the principal's. the principal may terminate this relationship, which is called power given as security. - rather it is terminated when an event occurs that discharges the principal's obligation.

cooperative

is an organization formed by individuals who usually pool their resources to gain an advantage in the market. - receive dividends in proportion to how many times per year they engage in business with the cooperative - may unincorporated or incorporated - unincorporated companies are treated like partnerships, meaning members share joint liability for the cooperative's actions - incorporated companies enjoy limited liability just as do the shareholders of a corporation

formation of limited liability companies

is formed by filing articles of organization in the state in which members want to establish their LLC. - precise requirements vary by state to state, typically the articles include the name of business, which must include the words Limited liability company or the initials LLC, its principal address, the name and address of a registered agent for service, the names of the owners, and information about how the company's management will be structured - typically want to do business in more states than just the state where they are formed, and they usually need to register in every additional state in which they tend to operate, a process referred to as qualification

agency

is generally defined as a relationship between a principal and an agent

Gratuitous Agent

is one who acts without consideration; that is, such is not paid for his or her services. - function much like regular agents, with a few exceptions

agency law

is primarily state law, it can vary from state to state - is especially important for US firms doing business globally. while foreign countries offer fresh markets and eager consumers, US companies often run into legal difficulties due to language barriers or lack of knowledge about local laws - to avoid such problems, many companies hire agents familiar with local laws, customs, and customers to help them function smoothly in foreign markets

Limited Liability Company

is relatively new, each member has limited liability dependent on the investment he or she makes, while still receiving the tax breaks often afforded to those in a partnership - is created with an agreement between members - for an LLC to obtain limited liability, the owner does not have to give up his right to participate in management of the LLC - the Uniform Limited Liability Company Act has been drafted to govern them has not been accepted by many states

Disadvantages of Partnership

is that partners are personally liable for the firm's debts

Duty of Loyalty

is the most important duty an agent owes to a principal. because of their fiduciary relationship, the agent has a responsibility to act in the interest of the principal, including avoiding conflicts of interest and protecting the principal's confidentiality - an agent cannot represent both the principal and a third party in an agreement, because there could be a conflict of interest. the agent also has a duty to notify the principal of any offers from third parties - also requires that the agent keep confidential any information about the principal, during the course of agency as well as after the agency relationship has been terminated, cannot disclose or misuse any information received during or after the agency relationship with the principal

classification of principal important because

it helps determine the principal's liability. if a principal is partially disclosed, the agent and the principal are both considered both parties to the contract and each may be liable separately from the other

Occupational Safety and Health Act

regulates workplace safety, which requires that every employer "furnish to each of his employees... employment ... free from recognized hazards that are likely to cause death or serious physical harm. - promulgates workplace safety standards, inspects facilities for compliance, and brings enforcement actions against violators - under the law, employers must prominently display in the workforce either the federal or a state OSHA poster with information about employees' safety and health rights - employers with 11 or more employees must keep records of work-related injuries and illness except in low-hazard industries such as retail, service, finance, insurance, and real estate

2 basic types of power of attorney

special and general

duty of notification

the agent has to communicate not only offers from third parties, but also any information he or she thinks could be important to the principal - if a third party has made an agreement with a principal through an agent and fails to meet the agreement, the agent must notify the principal in a timely manner - the law typically assumes that the principal is aware of all information revealed to the agent, regardless of whether the agent shares it with the principal

Agency Relationship

the agent is authorized to act for and on behalf of the principal, who hires the agent to represent the principal

respondeat superior

the agent is liable for any torts the agent commits. the principal is responsible for the negligent acts of the employee under the doctrine, the principal may also be liable for any international torts of the employee - an employer may be responsible for any tortious acts of the employee if the employer knew or should have known that the employee had a tendency to commit such acts

Duty of Obedience

the agent must follow the lawful instruction and direction of the principal. - an agent who makes an unauthorized agreement has failed to meet the duty of obedience, however, if the principal gives unlawful or unethical instructions, the agent is not required to behave in accordance with them

duty of accounting

the agent must keep an accurate account of the transactions of money and property made on behalf of the principal - if the principal asks to see this accounting, the agent has a duty to provide it - the agent must also keep separate accounts for the principal's funds and the agent's funds and not allow them to mix

duty of performance

the agent owes the principal is twofold. - 1st the agent must perform the duties as specified in the agency agreement - 2nd the agent must perform the specified duties with the same skill, care, and professionalism as a reasonable person in the same situation would provide

While FMLA does not require leave to be paid,

the employer must continue health insurance benefits. the employer may also require that an employee substitute paid time off for unpaid leave

introduction to labor and employment law

the employment relationship is a contractual relationship between the employer and employee: the employer agrees to pay the employee a certain amount of money in exchange for the employee's agreement to render specific services

the restatement of agency defines agency as

the fiduciary relationship that results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act

General Partnership

the partners divide the profits (usually equally) and the management responsibilities and share unlimited personal liability for the firm's debts

To sue for Disparate Treatment under Title VII:

the plaintiff must be a member of a protected class as listed in the act. in other words, the employee must have been discriminated against on the basis of race, color, national origin, religion or sex. if the employee has been hired, fired, denied a promotion, or the like, on the basis of membership in a protected class, this is a form of intentional discrimination and qualifies the employee to sue for disparate-treatment discrimination

proving disparate -impact discrimination under title VII

the plaintiff proves a case based on disparate impact by first establishing statistically that the rule disproportionately restricts employment opportunities for a protected class. the burden proof then shifts to the defendant, who can avoid liability by demonstrating that the practice or policy is a business necessity. the plaintiff, at this point, can still recover by proving that the "necessity" was promulgated as a pretext for discrimination.

duty of cooperation

the principal also owes a duty of cooperation to the agent and must therefore assist the agent in the performance of their duties. - furthermore, the principal can do nothing to interfere with the agent's reasonable conduct

duty to compensate

the principal has a ___ the agent for services provided, unless the parties have agreed the agent will act gratuitously. the agency contract will usually specify the type and amount of compensation as well as the time at which it will be paid. -if there is no agreement on the amount, the courts suggest compensation should be calculated according to the customary fee in the situation

duty of reimbursement and indemnification

the principal has a duty of reimbursement and indemnification to the agent. if an agent makes authorized expenditures in the course of working on behalf of the principal, the principal has a duty to reimburse the agent for that amount of money. - if an agent takes a trip on behalf of the principal, the principal must have authorized this trip if the agent is reimbursed - the principal has the duty to indemnify or reimburse the agent for any losses the agent incurs while working within the scope of authority on the principal's behalf - an agent makes an agreement with a third party on behalf of the principal and the principal fails to uphold the agreement, the third party could sue the agent for damages, but the principal has a duty to indemnify the agent for the losses the third party regains

Employer-Independent Contractor Relationship

the restatement of agency defines an indecent contractor as " a person who contracts with another to do something for another person but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of undertaking - building contractors, doctors, stockbrokers, and lawyers are the types of independent contractors - also agents, but not employees, not all are agents - cannot enter into contracts on behalf of the principal unless the principal unless the principal authorizes them to do so

benefits under state workers' compensation

to recover benefits, the injured party must demonstrate that (1) they are an employee, (2) both employer and employee are covered by the state workers' compensation program, and (3) the injury occurred on the job - the accident leading to the injury must have taken place during the time and within the scope of the claimant's employment - an employee injured on the job must notify the employer of the injury and file a claim with the state workers' compensation board, usually within 30 to 60 days - most statutes cover medical, hospital, and rehabilitation expenses and generally lost expenses.

tort and contract remedies

tort and contract remedies available when a principal violates an agency agreement are the standard tort and contract remedies

principal-agent relationship

typically exists when an employer hires an employee to enter into contracts on its behalf - most basic type of agency relationship

Agent Misrepresentation

unlike tort liability, which is based on whether the agent/employee was acting in the scope of employment, misrepresentation liability depends on whether the principal authorized the agent's act. if the principal authorizes the agent to engage in an act and the agent misrepresents herself intentionally or unintentionally, the principal is always liable in tort to someone who relied on the agent's misrepresentation

Merit Defense

usually raised when hiring or promotion decisions are partially based on test scores. - professionally developed ability tests that are not designed, intended, or used to discriminate may be used. - as long as they are manifestly related to the job performance, they do not violate the act

same-sex harassment

was not covered by title VII, the issue was resolved in 1998 when the Supreme Court heard the case of Once v. Sundowner Offshore services, inc. - that sex discrimination consisting of same-sex sexual harassment is actionable under title VII. the Supreme Court reversed the court's order and remanded the case for further proceedings

Specific Performance

when a contract exists and a principal agrees to certain conditions but fails to perform, under contract remedies the agent may seek court assistance in forcing the principal to perform the contract as stipulated - however, when the agency relationship is not contractual or the contract is for personal services, an agent does not have this right - 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 continue to employ the agent

change in law

when a new law makes the commission of an existing agency agreement illegal, the agreement is terminated

Avoidance

when an agent breaches an agency contract or his fiduciary duties, the principal may use her right of avoidance to nullify at her discretion any contract the agent notified

expressed agency or agency by agreement

when parties form an agency relationship by making a written or oral agreement - is the most common type of agency