Exam 2 terms
Specialized burden
shifting method of presenting circumstantial evidence of a cover-up upon which many Title VII plaintiffs rely. In such suits, the plaintiff is typically not proceeding under a mixed-motives approach, but rather trying to show that the only credible motive is an unlawful one.
• Disclosed Principle
third party knows or has reason to know (1) that the agent is acting for a principal and (2) the principal's identity
• Undisclosed Principle
when the third party lacks knowledge or reason to know both the principal's existence and the principal's identity.
Can an employee sue her employer under the Occupational Safety and Health Act?
• An employee cannot sue her employer for a violation of OSHA, however. The statute provides no private right of action to covered employees.
What does the book mean by saying workers' compensation is a social compromise?
• Because it involves strict liability and eliminates the three traditional employer defenses, workers' compensation greatly increases the probability that an injured employee will recover. • Such recoveries usually include (1) hospital and medical expenses (including vocational rehabilitation), (2) disability benefits, (3) specified recoveries for the loss of certain body parts, and (4) death benefits to survivors and/or dependents. • But the amount recoverable under each category of damages frequently is less than would be obtained in a successful negligence suit.
FLSA Remedies for Breach
• Both affected employees and the Labor Department can recover any unpaid minimum wages or overtime, plus an additional equal amount as liquidated damages, from an employer that has violated the FLSA's wages-and-hours provisions. Violations of the act's child labor provisions may result in civil penalties. Other FLSA remedies include injunctive relief and criminal liability for willful violations. exemptions from the FLSA's wages-and-hours provisions include executive, administrative, and professional personnel.
What does the Gaskell case tell us? How is it that the court finds direct evidence of discrimination but it does not grant Gaskell's motion for summary judgment? Why doesn't the court need to burden shift here?
• Involves a mixed-motives claim of disparate treatment on the basis of religion, in which the court must sort out the plaintiff's evidence of a discriminatory motive and the defendant's evidence that it was motivated by nondiscriminatory reasons. • These raised concerns that Gaskell was a "creationist." Several Search Committee members perceived that Gaskell blended religious thought with scientific theory, which they believed would adversely affect his ability to perform the outreach functions of the job. • According to the supervisor, a handful of students had mentioned in their teacher evaluations that it was refreshing to have a professor who believed in God, but that otherwise, Gaskell's views on religion had not interfered with his work. • UK ultimately hired Timothy Knauer, a former student and employee of UK's Department of Physics and Astronomy. Although UK concedes that Gaskell had more education and experience, it contends that it hired Knauer because he demonstrated more of the qualities that UK wanted in its Observatory Director. • Gaskell sued UK claiming that he was not hired because of his religion in violation of Title VII. Both parties moved for summary judgment. • Additional direct evidence of religious discrimination can be found in the deposition of Cavagnero, who stated that the debate generated by Gaskell's website and his religious beliefs, was an "element" in the decision not to hire Gaskell • UK's motion for summary judgment will be denied. The Court now turns to Gaskell's motion for partial summary judgment. • As the Sixth Circuit has stated, "in mixed-motive cases, a plaintiff can win simply by showing that the defendant's consideration of a protected characteristic 'was a motivating factor for any employment practice, even though other factors also motivated the practice.' " The McDonnell Douglas burden-shifting framework does not apply to mixed-motive claims.... • Mixed motive claim must show: (1) the defendant took an adverse employment action against the plaintiff; and (2) "race, color, religion, sex, or national origin was a motivating factor" for the defendant's adverse employment action.) • UK contends that the Search Committee did not act improperly when it considered Gaskell's comments about evolution because Gaskell made those comments public not only during his 1997 lecture at UK, but also by posting his lecture notes on his webpage. UK also contends that it did not consider Gaskell's religious beliefs, only his public comments that there were scientific problems with the theory of evolution. According to UK, the Search Committee was concerned that these publicly expressed views would impair Gaskell's ability to serve effectively as Observatory Director. • UK's motivation for its decision not to hire Gaskell is very fact intensive and difficult to determine at the summary judgment stage. Because UK has come forward with more than a scintilla of evidence to support its argument that religion was not a motivating factor in its decision, Gaskell's motion for partial summary judgment will be denied. • Gaskell's motion for partial summary judgment is denied; UK's motion for summary judgment is denied; and this matter remains pending.
Is the test to determine the existence of agency objective or subjective?
Objective- as the term manifest suggests
When Principle is Unidentified and agent has Apparent authority who is liable?
Principle Liable on the contract Agent liable on contract
When Principle is Unidentified and agent has actual authority who is liable?
Principle Liable on the contract Agent liable on contract
When principle is Undisclosed and agent has actual authority who is liable?
Principle Liable on the contract Agent liable on contract
Positional risk
Under this more liberal test, an injured employee recovers if her employment caused her to be at the place and time where her injury occurred. Here, the factory worker probably would recover. The Dulen case that follows shortly seems to adopt this test.
Can actual and apparent authority exist at the same time?
Yes
prima facie case
a case that eliminates the most common nondiscriminatory reasons for the challenged employment decision (e.g., hiring, promotion, or termination) and creates a presumption of discrimination. • The proof needed for a prima facie case varies with the nature of the challenged employment decision, but usually it is not onerous and is easily made. To establish a prima facie case to challenge a hiring decision, for example, the plaintiff must prove that she applied for the job and was minimally qualified for it, that she is a member of the protected class that she claims was the unlawful motivating factor the employer considered, that she was rejected, and that the employer continued to attempt to fill the job or filled it with someone who is not a member of the relevant protected class.
Special Agent
employed to conduct a single transaction or a small, simple group of transactions
National Labor Relations Board (NLRB).
Established by National Labor Relations Act of 1935 (1) Handling representation cases (which involve the process by which a union becomes the certified employee representative within a bargaining unit) (2) Deciding whether challenged employer or union activity is an unfair labor practice.
What is indemnification?
Indemnity is a contractual obligation of one party to compensate the loss occurred to the other party due to the act of the indemnitor or any other party. -EX: • sometimes a principal is required to indemnify an agent for tort liability the agent incurs. On the other hand, some torts committed by agents may involve a breach of duty to their principal, and the principal may be able to recover from an agent on this basis.
Can agents give themselves apparent authority?
no
Does the employee's protected status have to be the sole factor motivating the employment decision in title VII?
no
Express Ratification
occurs when the principal manifests assent that his legal relations be affected, such as stating orally that he wishes to be bound by a contract that has already been made.
Limited Liability Limited Partnership
- limited partnership whose partners have elected limited liability status for all the partners. -designed to give the same limited liability advantages to general partners in a limited partnership as have been granted to partners who manage an LLP or a limited liability company identical to a limited partnership in its management and the rights and duties of its partners. However, by electing LLLP status, both the limited partners and the general partners will have no liability for most obligations of the LLLP. • Nonetheless, a general partner will have unlimited liability for any torts he commits while acting for the LLLP. -Unaffected by death or withdrawal of partner -Usually only partners taxed; may elect to be taxed like a corporation
What kinds of things constitute an improper purpose?
1. defrauding creditors-(Forming a corporation with too high of a debt to equity ratio or looting causing benefits to shareholders but losses to creditors) 2. circumventing a statute- (finding ways to get around statues that are in place) 3. Evading an existing obligation- (for example reincorporating to try to break out of an existing contract)
Does the principal have to make a manifestation that the agent can act for her to give rise to estoppel liability?
No, Estoppel is different from apparent authority because it does not require that the purported principal has made any manifestation that the purported agent can act for her estoppel can arise when a principal is informed that his agent is representing to a third person that she has authority to act for the principal, when in fact she has no such actual or apparent authority. Because the agent has made the manifestation—not the principal—no actual or apparent authority exists.
Sole Proprietorship
One person owns the business Terminates at death or withdrawal Sole proprietor has complete control Unlimited liability Transfer of owners interests is impossible since there is no legal entity just the owner Only sole proprietor is taxed on federal income tax return
When principle is disclosed and agent has Apparent authority who has liability?
Principle liable on contract Agent not liable on contract unless agrees to be liable
When principle is disclosed and agent has actual authority who has liability?
Principle liable on contract Agent not liable on contract unless agrees to be liable
When principle is Undisclosed and agent has No authority who is liable?
Principle not liable on contract Agent liable
When Principle is Unidentified and agent has No authority who is liable?
Principle not liable on contract Agent usually liable for breach of implied warranty of authority
When principle is disclosed and agent has No authority who has liability?
Principle not liable on contract Agent usually liable for breach of implied warranty of authority
Power of sale
a secured loan agreement authorizing a lender (the agent) to sell property used as security if the borrower (the principal) defaults. (For instance, suppose that Allen lends Peters $500,000 and Peters gives Allen a lien or security interest on Peters's land to secure the loan. The agreement might authorize Allen to act as Peters's "agent" to sell the land if Peters fails to repay the loan.) power given the "agent" in such cases is not for the principal's benefit, it sometimes is said that a power given as a security or an agency coupled with an interest is not truly an agency.
Implied Ratification
arises when the principal's conduct justifies a reasonable assumption that he consents to the agent's act. *Can a principal's silence amount to ratification?* Yes this is implied, Sometimes, even a principal's silence, acquiescence, or failure to repudiate the transaction may constitute ratification. This can occur when the principal would be expected to object if he did not consent to the contract, the principal's silence leads the third party to believe that he does consent, and the principal is aware of all relevant facts.
Are there special rules for banks, insurance companies, and savings and loan associations?
for-profit corporations that especially affect the public interest, such as banks, insurance companies, and savings and loan associations, are usually required to incorporate under special statutes.
What is a disability?
(1) a physical or mental impairment that substantially limits one or more major life activities, or (2) a record of such an impairment, or (3) one's being regarded as having such an impairment. • (The last two categories protect those who have previously been misdiagnosed or who have recovered from earlier impairments.) • Not protected, however, are those who suffer discrimination for currently engaging in the illegal use of drugs.
When do voluntary racial preferences that favor minorities who are qualified for the job in question survive a Title VII attack?
(1) are intended to correct a racial imbalance involving underrepresentation of minorities in traditionally segregated job categories (2) do not "unnecessarily trammel" the rights of white employees or create an absolute bar to their advancement (3) are only temporary.
What are the four Title VII defenses listed in the book? Which defenses exonerate an employer? Which defenses still result in a violation of Title VII?
1. Same-decision defense. Title VII 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 absence of the unlawful motivating factor. In other words, if an employer proves it would have made the same decision regardless of the employee's protected status, the employee is not entitled to any personal recovery. The employer has violated the law and can be enjoined from continuing to do so, but the employee cannot recover money damages or be reinstated. An employee may still be entitled to recover his attorney fees for the attorney's work on the successful portion of the mixed-motives claim. In the preceding Gaskell case, for instance, if a jury found that UK was motivated not to choose Gaskell as Observatory Director because of his religion, the same-decision defense might allow UK to escape paying money damages (e.g., back pay, compensatory, and punitive damages) to Gaskell. For example, UK might try to prove that it would not have hired Gaskell because of reports of his obstinacy at his previous employment, regardless of his religious beliefs. 2. Seniority. Title VII is not violated if the employer treats employees differently pursuant to a bona fide seniority system. To be bona fide, such a system at least must treat all employees equally on its face, not have been created for discriminatory reasons, and not operate in a discriminatory fashion. 3. The various "merit" defenses. An employer also escapes Title VII liability if it acts pursuant to a bona fide merit system, a system basing earnings on quantity or quality of production, or the results of a professionally developed ability test. Presumably, such systems and tests at least must meet the general standards for seniority systems stated above. Also, the EEOC has promulgated lengthy Uniform Guidelines on Employee Selection Procedures that speak to these and other matters. 4. The BFOQ defense. Finally, Title VII allows employers to discriminate on the bases of sex, religion, or national origin where one of those traits is a bona fide occupational qualification (BFOQ) that is reasonably necessary to the business in question. The BFOQ defense is applied to cases of disparate treatment, whereas the business necessity defense, which was discussed earlier, applies in disparate impact cases. The BFOQ defense does not protect race or color discrimination. As the following Berry case makes clear, moreover, the defense is a narrow one. Generally, it is available only where a certain sex, religion, or national origin is necessary for effective job performance. For example, a BFOQ probably would exist where a female is employed to model women's clothing or to fit women's undergarments. But the BFOQ defense usually is unavailable where the discrimination is based on stereotypes (e.g., that women are less aggressive than men) or on the preferences of coworkers or customers (e.g., the preference of airline travelers for female rather than male flight attendants). The defense also is unavailable where the employer's discriminatory practice promotes goals, such as fetal protection, that do not concern effective job performance. In addition, required or desired traits or characteristics cannot be the basis for a BFOQ defense unless those traits or characteristics are synonymous with a particular sex, religion, or national origin. Otherwise, an individualized evaluation of the trait or characteristic in each applicant is required.
Increased risk
Here, the employee recovers only if the nature of her job increases her risk of injury above the risk to which the general public is exposed. Under this test, a factory worker assaulted by a trespasser probably would not recover, while a security guard assaulted by the same trespasser probably would.
What is the Ellerth/Farragher affirmative defense? What is the result of the defense?
If a supervisor engages in such offensive behavior, the employer will be automatically vicariously liable, unless the employer can prove (1) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or otherwise to avoid harm. • The affirmative defense places a premium on an employer's proactive education about and response to alleged harassment. Responsible employers accomplish this, in part, by creating, adopting, and educating their employees about specific, comprehensive policies that define and prohibit harassment, as well as provide multiple avenues of complaint for alleged victims. The affirmative defense also reinforces a victim's responsibility to notify her employer about the offending conduct and to take advantage of an employer's attempts to be proactive.
When principle is Undisclosed and agent has apparent authority who is liable?
Impossible
What does the MDM case show us?
The MDM case, which follows, applies the Restatement (Third) definition of agency. That case shows that an agent is a fiduciary of the principal and not vice versa. - CX is the principle so MDM has a fiduciary duty to them not vice versa
Workers' Compensation
They allow injured employees to recover under strict liability, thus removing any need to prove employer negligence. They also eliminate the employer's three traditional defenses: contributory negligence, assumption of risk, and the fellow-servant rule. In addition, they make workers' compensation an employee's exclusive remedy against her employer for covered injuries. Workers' compensation protects only employees and not independent contractors • Many states exempt casual, agricultural, and domestic employees, among others. State and local government employees may be covered by workers' compensation or by some alternative state system. Also, states usually exempt certain employers—for example, firms employing less than a stated number of employees (*often three*). • In cases in which an employer intentionally injures an employee, the injured employee can usually sue the employer outside of workers' compensation. • . In some states, this intentional injury exception has expanded beyond intentional torts to situations in which the employer did something or maintained a condition in the workplace that the employer knew was substantially certain to harm the employee.
General Agent
continuously employed to conduct a series of transactions
• Nonexistent Principle
principal does not exist
Darco case
• 2 truck drivers where having sex in the truck when the truck was struck by a train • Dulen sought workers' compensation benefits for what he maintained were on-the-job injuries. After various Oklahoma courts ruled in Dulen's favor, Darco appealed to the Supreme Court of Oklahoma. • When examining the compensation tribunal's factual resolutions, this court applies the any-competent-evidence standard. The trial judge's findings may not be disturbed on review if supported by competent proof. • Oklahoma's jurisprudence has long recognized that a compensable work-related injury must both: (1) occur in the course of, and (2) arise out of the worker's employment. • Assuming as a fact that when the collision occurred, Dulen was having sex while also driving the rig, the trial judge could still find that this servant's acts constituted no more than a careless, negligent, or forbidden genre of performance, but did not amount to pure frolic which was tantamount to total abandonment of the master's business. • An injury is compensable if it arises out of the claimant's employment—i.e., was caused by a risk to which the employee was subjected by his work. • Assuming Dulen and Freeman were engaged in sexual intercourse, (1) there is undisputed proof that, when the collision occurred, Dulen remained at the steering wheel and hence cannot be deemed to have then "abandoned" his assigned work station; and (2) there is competent evidence to support the trial judge's finding which ascribes the accident's cause, not to copulation-related inattention, but to defective railroad-crossing warning equipment. • Trial court order sustained; Dulen recovers.
Does it matter if the alleged harasser was a supervisor?
• A supervisor is someone who has authority to make or recommend tangible employment decisions (for example, termination, promotion, pay, work assignment, etc.) affecting the victim. A supervisor might be the immediate manager of the victim or someone in successively higher authority. • Because an employer has given the supervisor the power to make or recommend tangible employment decisions, the supervisor acts for and on behalf of the employer in a way that other employees do not. • In addition, when a supervisor engages in harassment, he is aided in his misconduct by that authority. As a result, the Supreme Court has held that an employer is automatically vicariously liable for a supervisor's harassing behavior when that harassment involves or ends in a tangible job detriment for the victim.
What is the procedure for filing a Title VII claim? Is it easy or complicated? Is it typically enforced by the EEOC or by the injured private party? What must the person do first? What is a right to sue letter? Can a private party sue without a right to sue letter? What is the statute of limitations?
• Although the EEOC sometimes sues to enforce Title VII, the usual Title VII suit is a private claim. • 1) Private parties with a Title VII claim have no automatic right to sue. Instead, they first must file a charge with the EEOC, or with a state agency in states having suitable fair employment laws and enforcement schemes. • 2) This allows the EEOC or the state agency to investigate the claim, attempt conciliation if the claim has substance, or sue the employer itself. • 3) The EEOC has entered worksharing agreements with many of the state agencies. Among other things, the agreements relieve an employee of the hassle of separately filing charges with the EEOC and with the state agency. Instead, when an employee files a charge with a state agency that is party to a worksharing agreement, the charge is considered "dual filed" at the EEOC (and vice versa). Usually, the charge is investigated by the organization with which it was originally filed. • 4) Regardless of whether the EEOC or a state agency conducts the investigation or attempts conciliation, at the close of the process the employee will receive a "right-to-sue letter." Until the employee receives the letter, a court has no authority to adjudicate the claim. Once the employee receives the letter, she has 90 days in which to file her lawsuit in court.
For Title VII purposes, is religion defined narrowly or broadly?
• Broadly • The EEOC says that it includes any set of moral beliefs that are sincerely held with the same strength as traditional religious views. • forbids religious discrimination against atheists. It also forbids discrimination based on religious observances or practices—for example, grooming, clothing, or the refusal to work on the Sabbath. • But such discrimination is permissible if an employer cannot reasonably accommodate the religious practice without suffering undue hardship. • Undue hardship exists when the accommodation imposes more than a minimal burden on an employer. • Supreme Court clarified that a claim of failure to accommodate to an employee's religious observance or practice is simply a type of disparate treatment claim • employee is not required to prove the employer had knowledge of the religious nature of the observance or practice, provided he employee can prove that the employer's negative treatment of the employee (or applicant) was motivated at least in part by the observance or practice.
What is a close corporation?
• Corporations with very few shareholders whose shares are not available to the general public • Typically close corporation, the controlling shareholders are the only managers of the business.
What are the two Title VII theories of discrimination? What is the difference between the two? Are they suits claiming individual discrimination or discrimination of a group of people?
• Disparate treatment-involve allegations that an employer treated an employee differently because of the employee's protected status (race, color, religion, sex, or national origin). • Encompasses both individual claims by a single employee or systemic claims by a group of mistreated employees. • Disparate impact-involve allegations that an employer's policies or practices that are seemingly neutral with regard to race, color, religion, sex, or national origin have a disproportionate negative impact (or "adverse impact") on members of one of those groups. • Disparate impact theory is most often used when the alleged discrimination affects many employees.
disparate impact title VII claim
• Does not require proof of the employer's motive. • Instead, disparate impact focuses on results. If a policy or practice—for example, a height, weight, or high school diploma requirement for hiring or a written test for hiring or promotion—results in an adverse impact on a protected group, the employer may have violated Title VII, even though the requirement is neutral as to Title VII's protected classes and the employer had no specific desire to discriminate against the affected employees. • A prima facie case of disparate impact involves showing that the challenged, facially neutral practice has an adverse impact on the plaintiff's race, color, religion, sex, or national origin. • Adverse impact is usually established by statistical evidence showing that the practice results in disproportionately harsher outcomes for the protected class. • If the plaintiffs show a disparate impact, the employer loses unless it demonstrates that the challenged practice is job-related for the position in question and consistent with business necessity. • Even if the employer makes this demonstration, the plaintiffs have another option: to show that the employer's legitimate business needs can be advanced by an alternative employment practice that is less discriminatory than the challenged practice. (new test/ requirement that would have less of an impact on the protected class)
How did the LMRA change NLRA?
• In 1947 congress passed the Labor Management Relations Act (LMRA or Taft-Hartley Act) • The act declared that certain acts by unions are unfair labor practices. These include: (1) restraining or coercing employees in the exercise of their guaranteed bargaining rights (e.g., their right to refrain from joining a union) (2) causing an employer to discriminate against an employee who is not a union member, (3) refusing to bargain collectively with an employer (4) conducting a secondary strike or a secondary boycott for a specified illegal purpose,5 (5) requiring employees covered by union-shop contracts to pay excessive or discriminatory initiation fees or dues (6) featherbedding (forcing an employer to pay for work not actually performed). -established an 80-day cooling-off period for strikes that the president finds likely to endanger national safety or health. In addition, it created a Federal Mediation and Conciliation Service to assist employers and unions in settling labor disputes.
What is the purpose of ERISA?
• ERISA does not require employers to establish or fund pension plans and does not set benefit levels. Instead, it tries to check abuses and to protect employees' expectations that promised pension benefits will be paid. • ERISA imposes fiduciary duties on pension fund managers. For example, it requires that managers diversify the plan's investments to minimize the risk of large losses, unless this is clearly imprudent. ERISA also imposes record-keeping, reporting, and disclosure requirements. For instance, it requires that covered plans provide annual reports to their participants and specifies the contents of those reports. • In addition, the act has a provision guaranteeing employee participation in the plan. For example, certain employees who complete one year of service with an employer cannot be denied plan participation. • Furthermore, ERISA contains funding requirements for protecting plan participants against loss of pension income. • Finally, ERISA contains complex vesting requirements that determine when an employee's right to receive pension benefits becomes nonforfeitable. These requirements help prevent employers from using a late vesting date to avoid pension obligations to employees who change jobs or are fired before that date. • ERISA's remedies include civil suits by plan participants and beneficiaries, equitable relief, and criminal penalties.
Employers Defense against EPA claims
• Employer must prove one of the EPA's four defenses or it will lose the case: he employer has a defense if it shows that the pay disparity is based on (1) seniority (2) merit (3) quality or quantity of production (e.g., a piecework system) (4) any factor other than sex.
Are employers expected to shoulder more inconvenience and expense to accommodate disabled employees or religious employees?
• For disabled more than religion
Hobby Lobby case
• Health care is the topic in question • Providing contraception to woman for free (specifically abortions because Hobby Lobby is a catholic firm) • Hobby lobby as a for profit corporation said they don't want to provide contraceptive care anymore • Court ruled in favor of hobby lobby • 1st time ever • Does the Religious Freedom Restoration Act of 1993 allow a for-profit company to deny its employees health coverage of contraception to which the employees would otherwise be entitled based on the religious objections of the company's owners? • Yes. The Court held that Congress intended for the RFRA to be read as applying to corporations since they are composed of individuals who use them to achieve desired ends. Because the contraception requirement forces religious corporations to fund what they consider abortion, which goes against their stated religious principles, or face significant fines, it creates a substantial burden that is not the *least restrictive method* of satisfying the government's interests. • In his concurrence, Justice Anthony M. Kennedy wrote that the government had not met its burden to show that there was a meaningful difference between non-profit religious institutions and for-profit religious corporations under the RFRA. Because the contraception requirement accommodates the former while imposing a more restrictive requirement on the later without showing proper cause, the requirement violates the RFRA. 5-4 majority
What is the purpose of the Occupational Safety and Health Act?
• 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. • In addition to the general duty clause requirement, employers are required to comply with many detailed regulations promulgated by the Occupational Safety and Health Administration (OSHA). • One of these regulations, for example, requires employers to inform employees who could be exposed to hazardous chemicals in the workplace about the chemicals and to provide employees with training so that they can effectively protect themselves from harm. The act also requires employers to report to the secretary of labor any on-the-job injuries that require hospitalization. • The Occupational Safety and Health Act applies to *all employers* engaged in a business affecting interstate commerce. • Exempted, however, are the U.S. government, the states and their political subdivisions, and certain industries regulated by other federal safety legislation like the Mine Safety and Health Act.
What are the different versions of the test for "arising out of the employment"?
• Increased risk • Positional risk
Johnson v. Fluor case
• In June 2011, Johnson filed a union grievance against her supervisor, Homer Jones. Pursuant to that grievance, Jones was removed from Johnson's chain of command, and Johnson subsequently reported to Jones's supervisor, Glenn Jarreau. Later in June, though, Johnson reported to her union steward that for more than a year, Jarreau had acted unprofessionally and inappropriately toward her. The union steward notified FMS management about Johnson's allegations. FMS conducted an investigation in them and terminated Jarreau's employment in early July. • Johnson filed a charge of discrimination with the EEOC, claiming that Jarreau had sexually harassed her. Following the EEOC investigation process, Johnson filed suit against FMS under Title VII claiming hostile environment sexual harassment. FMS filed a motion for summary judgment in part on the basis that the undisputed facts established that FMS was entitled to immunity under the Farragher/Ellerth affirmative defense. • Accordingly, the Court finds that Johnson has failed to show that a genuine issue of material fact exists as to whether FMS took prompt and remedial action in response to her complaint. • No matter how loudly Johnson proclaims that she did not know of FMS's policies or the Union's grievance procedure, her actions, specifically the filing of her Union grievance against Jones before she reported Jarreau's alleged behavior, demonstrate that Johnson knew and understood FMS's grievance process. • Hence, the Court finds that Johnson has failed to demonstrate that a genuine issue of material fact exists regarding her failure to take advantage of corrective opportunities. • Based on the foregoing, the Court finds that, because Johnson has failed to satisfy her evidentiary burden on summary judgment as to the Ellerth/Faragher affirmative defense, her hostile work environment claim shall be dismissed.
FMLA (Family and Medical Leave Act)
• In general, the act covers those employed for at least 12 months, and for 1,250 hours during those 12 months, by an employer *employing 50 or more employees* at the employee's work site or within a 75-mile radius of that work site. Covered employers include federal, state, and local government agencies. • covered employees are entitled to a total of 12 workweeks of leave during a 12-month period for one or more of the following reasons:(1) the birth of a child and the need to care for that child; (2) the adoption of a child; (3) the need to care for a spouse, child, or parent with a serious health condition; and (4) the employee's own serious health condition. Only covers "serious health condition" is complex. It generally requires inpatient care in a hospital or continuing care by a health care provider. • Usually, the leave is without pay. Upon the employee's return from leave, the employer ordinarily must put her in the same or an equivalent position and must not deny her any benefits accrued before the leave began.
Does Title VII sex discrimination include discrimination based on homosexuality or transexuality? Does it cover men? Does it cover pregnancy?
• Just discrimination against men and women • forbids discrimination on the bases of pregnancy and childbirth and requires employers to treat these conditions like any other condition similarly affecting working ability in their sick leave programs, medical benefit and disability plans, and so forth. • sexual stereotyping violates Title VII. • Defined as employer behavior that; (1) denies an employee opportunities by requiring that he or she must have traits traditionally associated with his or her sex (e.g., requiring a woman to have a nurturing demeanor) or (2) penalizes him or her for lacking such traits (e.g., penalizing a man for lacking aggression or for shying away from physical confrontation).
EEOC v. Kohl's case
• Manning filed a charge of discrimination with the EEOC, claiming among other things disability discrimination and failure to accommodate under the ADA. After investigation, the EEOC sued Kohl's on Manning's behalf. • The U.S. District Court for the District of Maine granted summary judgment to Kohl's, finding that Manning had failed to engage in good faith in the interactive process of determining a reasonable accommodation. • As best as I can tell, this is the first time that any circuit court has held that an employer can reject an accommodation request backed up by a doctor's note, refuse to offer an accommodation that it has determined it can make, falsely claim that any accommodation must be offered to all workers whether disabled or not, and then declare the employee's ADA rights forfeited when she gives up.
Do states have their own anti discrimination laws?
• Most states have statutes that parallel Title VII, the EPA, the ADEA, and the ADA. • These statutes sometimes provide more extensive protection than their federal counterparts. • In addition, some states prohibit forms of discrimination not barred by federal law. • Examples include discrimination on the bases of one's marital status, physical appearance, sexual orientation, political affiliation, and off-the-job smoking.
What is the NLRA?
• National Labor Relations Act of 1935 (the NLRA or Wagner Act). The NLRA gave employees the right to organize by enabling them to form, join, and assist labor organizations. It also allowed them to bargain collectively through their own representatives. In addition, the Wagner Act prohibited certain unfair labor practices that were believed to discourage collective bargaining. These practices include: (1) interfering with employees' rights to form, join, and assist labor unions (2) dominating or interfering with the formation or administration of a labor union, or giving a union financial or other support (3) discriminating against employees in hiring, tenure, or any term of employment due to their union membership (4) discriminating against employees because they have filed charges or given testimony under the NLRA (5) refusing to bargain collectively with any duly designated employee representative.
Can an employee sue her employer under the FMLA? What will her remedies be?
• No, FMLA permits civil actions by the secretary of labor, with any sums recovered distributed to affected employees. In such actions, employees may also obtain equitable relief, including reinstatement and promotion.
How does OSHA ensure compliance? What does OSHA typically do in the case of a violation?
• OSHA can inspect places of employment for violations of the act and its regulations. If an employer is found to violate the act's general duty clause or any specific standard, OSHA issues a written citation. • The main sanctions for violations of the act and the regulations are various civil penalties. In addition, any employer who commits a willful violation resulting in death to an employee may suffer a fine, imprisonment, or both. Also, the secretary of labor may seek injunctive relief when an employment hazard presents an imminent danger of death or physical harm that cannot be promptly eliminated by normal citation procedures.
Title VII
• prohibits discrimination based on race, color, religion, sex, and national origin in hiring, firing, job assignments, pay, access to training and apprenticeship programs, and most other employment decisions. • Covers all employers employing *15 or more* employees and engaging in an industry affecting interstate commerce. • In addition, Title VII covers certain unions—mainly those with 15 or more members—in their capacity as employee representative.
What happens if the employer fails to rebut the presumption on a prima facie case?
• Once the plaintiff establishes a prima facie case, the employer must rebut the presumption of discrimination by producing evidence that the challenged employment decision was taken for legitimate, nondiscriminatory reasons. If the employer refuses or fails to produce such evidence, the plaintiff automatically wins. In response to a prima facie case challenging a hiring decision, for example, the employer might produce evidence that it rejected the plaintiff because she was late to the interview. • If the employer produces satisfactory nondiscriminatory reasons, the plaintiff must then show that the discrimination actually occurred, typically by showing that the employer's reasons were a mere pretext for discrimination. For example, she might show that the employer has hired men for similar positions despite their tardiness for an interview.
What kinds of evidence can be used in a Title VII disparate treatment case?
• Proving an unlawful motivating factor is easy in cases where the employer announces an express policy of disfavoring one of Title VII's protected classes. • Similarly, sometimes a supervisor or manager makes an oral or written statement admitting to treating an employee differently based on her protected status. • Circumstantial evidence relies on reasonable inferences, rather than on admissions or policies, to prove the employer's unlawful motive. The Supreme Court clarified that circumstantial evidence is just as useful as direct evidence to prove claims of employment discrimination.
What does RFRA prohibit?
• Religious freedom restoration act • Prohibits government from substantially burdening a person's exercise of religion • Covers any exercise of religion, whether or not compelled by, or central to, a system of religious belief • Even if from a rule of general applicability • Must be; • In furtherance of a compelling governmental interest AND • Least restrictive means of furthering compelling governmental interest
How is social security funded?
• Social Security mainly is financed by the Federal Insurance Contributions Act (FICA). 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. • FICA revenues finance various forms of financial assistance besides the old-age benefits that people usually call Social Security. These include survivors' benefits to family members of deceased workers, disability benefits, and medical and hospitalization benefits for the elderly (the Medicare system).
Are all former employees entitled to unemployment compensation?
• States often condition the receipt of benefits on the recipient's having worked for a covered employer for a specified time period, and/or having earned a certain minimum income over such a period. • Generally, those who voluntarily quit work without good cause, are fired for bad conduct, fail to actively seek suitable new work, or refuse such work are ineligible for benefits.
Berry Case
• Stripper at pin ups that got pregnant and was fired • Though she was nominally fired for leaving before the end of her shift and refusing to pay the standard "leave early fee" that was required when a dancer does not complete her entire shift, ultimately Berry claimed that she was fired for being pregnant, claiming that she was told by Pin Ups management personnel that she could not work there while she was pregnant. • Pregnant women had worked there before • The Defendant moved for summary judgment, asserting that even assuming Berry was indeed discharged due to her pregnancy, the discharge was justified under the "bona fide occupational qualification" defense under Title VII. • The Pregnancy Discrimination Act ("PDA")—which amended Title VII—defines the term " 'because of sex' ... [to] include ... because of or on the basis of pregnancy, childbirth, or related medical conditions." • Under Title VII, however, "an employer may discriminate on the basis of ... sex ... in those certain instances where ... sex ... is a bona fide occupational qualification [("BFOQ")] • In response, the Defendant first argues that "sex appeal" may be a BFOQ. Technically, this is incorrect. • For these reasons, the Court DENIES the Defendant's Motion for Partial Summary Judgment.
What is quid pro quo harassment?
• Supervisor makes some express or implied linkage between an employee's submission to sexually oriented behavior and a tangible job consequence. • For example, suppose that a supervisor fires a secretary because she refuses to have sexual relations with him or refuses to go out on a date with him. Such conduct violates Title VII whether or not the supervisor expressly tells the secretary that she will be fired for refusing to submit. Title VII is also violated when a supervisor denies a subordinate a deserved promotion or other job benefit for refusing to submit to the harassment. In such circumstances, the employer is automatically vicariously liable to the victim and has no defense.
What is the effect of the Americans with Disabilities Amendments Act of 2008?
• The ADA amendments specify that major life activities include (but are not limited to) tasks such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working. They also include the operation of major bodily functions, such as (but not limited to) the operation of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions. • Employers cannot take into consideration medicine or any assisting tech for people with disabilities when determining if that disability severely limits major life functions • The ADA Amendments Act also states that a person meets the standard of "being regarded as having such an impairment" if he has been discriminated against because of an actual or perceived physical or mental impairment, whether or not the impairment limits or is perceived to limit a major life activity.
Equal Pay Act
• The Equal Pay Act (EPA), which forbids sex discrimination regarding pay, was a 1963 amendment to the FLSA. Its coverage resembles the coverage of the FLSA's minimum wage provisions. Unlike the FLSA, however, the EPA covers executive, administrative, and professional employees. • EPA case involves a woman who claims that she has received lower pay than a male employee performing substantially equal work for the same employer. • The substantially equal work requirement is met if the plaintiff's job and the higher-paid male employee's job involve each of the following: (1) equal effort (2) equal skill (3) equal responsibility (4) similar working conditions.
What does the FLSA regulate?
• The FLSA regulates wages and hours by entitling covered employees to (1) a specified minimum wage whose amount changes over time and (2) a time-and-a half rate for work exceeding 40 hours per week. • The FLSA's complicated coverage provisions basically enable its wages-and-hours standards to reach most significantly sized businesses that are engaged in interstate commerce or produce goods for such commerce. • Forbids oppressive child labor by any employer engaged in interstate commerce or in the production of goods for such commerce and also forbids the interstate shipment of goods produced in an establishment where oppressive child labor occurs. Oppressive child labor includes (1) most employment of children below the age of 14; (2) employment of children aged 14-15, unless they work in an occupation specifically approved by the Department of Labor; and (3) employment of children aged 16-17 who work in occupations declared particularly hazardous by the Labor Department.
What is joint and severally liable?
• This means that a third party may join the principal and the agent in one suit and get a judgment against each, or may sue either or both individually and get a judgment against either or both. • However, once a third party actually collects in full from either the principal or the agent, no further recovery is possible.
How does an employee prove a disparate treatment claim under Title VII?
• Title VII prohibits employers from making employment decisions based, even in part, on an employee's protected status. An employee proves a disparate treatment claim if he can "demonstrate that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice."9 This is often referred to as a "mixed-motives" claim, in which an employer's decision is an amalgam of both prohibited and lawful motives. • employer may limit an employee's recovery in mixed-motives cases by proving that it would have made the same challenged employment decision even in the absence of the unlawful motive (i.e., the "same-decision defense"); nonetheless, if one of the factors in the employer's challenged decision was the employee's protected status, the employer has violated Title VII.
What is the work-related injury requirement? What are the two elements to meet this requirement?
• To be work-related, the injury must: (1) Arise out of the employment (2) Happen in the course of the employment.
Who pays for unemployment compensation?
• Today, each state administers its own unemployment compensation system under federal guidelines. The system's costs are met by subjecting employers to federal and state unemployment compensation taxes.
Remediation for employee under EPA
• Under the EPA, however, employee suits are for the amount of back pay lost because of an employer's discrimination, not for unpaid minimum wages or overtime. An employee may also recover an equal sum as liquidated damages. • The EPA is enforced by the Equal Employment Opportunity Commission (EEOC) rather than the Labor Department. Unlike some of the employment discrimination statutes, however, the EPA does not require that private plaintiffs submit their complaints to the EEOC or a state agency before mounting suit.
Remedies for VII Suit
• Various remedies are possible once private plaintiffs or the EEOC wins a Title VII suit. • If intentional discrimination has caused lost wages, employees can obtain back pay. At the court's discretion, successful private plaintiffs also may recover reasonable attorney's fees. • In addition, victims of intentional discrimination can recover compensatory damages for harms such as emotional distress, sickness, loss of reputation, or denial of credit. • Victims of intentional discrimination also can recover punitive damages where the defendant discriminated with malice or with reckless indifference to the plaintiff's rights. • Title VII caps the sum of the plaintiff's recoverable compensatory and punitive damages to certain amounts that vary with the size of the employer. For example, they cannot total more than $300,000 for an employer with more than 500 employees. • Court ordered remedies are permissible if: • (1) an employer has engaged in severe, widespread, or longstanding discrimination • (2) the order does not unduly restrict the employment interests of white people • (3) it does not force an employer to hire unqualified workers.
Is retaliation prohibited by Title VII?
• Yes, Title VII, for example, prohibits retaliation against individuals who oppose any practice the statute makes unlawful or who make a charge, testify, assist, or participate in any manner in a Title VII investigation, proceeding, or hearing
Can an employer be liable for unwelcome harassment if there is no tangible job detriment accompanying it? When?
• Yes, supervisor makes some express or implied linkage between an employee's submission to sexually oriented behavior and a tangible job consequence. For example, suppose that a supervisor fires a secretary because she refuses to have sexual relations with him or refuses to go out on a date with him. Such conduct violates Title VII whether or not the supervisor expressly tells the secretary that she will be fired for refusing to submit. Title VII is also violated when a supervisor denies a subordinate a deserved promotion or other job benefit for refusing to submit to the harassment. In such circumstances, the employer is automatically vicariously liable to the victim and has no defense. • Such conduct is often referred to as hostile environment harassment. • Generally, the victim must show that the harassment was unwelcome. • the behavior must be sufficiently severe or pervasive to create an environment that a reasonable victim would find hostile or abusive. • Finally, the alleged harasser must have targeted his victims because of their sex.
How is workers' compensation administered and funded?
• administered by a state agency that adjudicates workers' claims and oversees the system • Its decisions on such claims normally are appealable to the state courts. • The states fund workers' compensation by compelling covered employers to (1) purchase private insurance, (2) self-insure (e.g., by maintaining a contingency fund), or (3) make payments into a state insurance fund. • Because employers generally pass on the costs of insurance to their customers, workers' compensation tends to spread the economic risk of workplace injuries throughout society.
When is an employer liable for sexual harassment?
• courts have long held that an employer may be liable if it allows its employees to be subjected to unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. • Sexual harassment is a form of disparate treatment sex discrimination because the victim is subjected to different (and disadvantageous) terms or conditions of employment because of her sex.
What is national origin discrimination?
• discrimination based on: • (1) the country of one's or one's ancestors' origin or (2) one's possession of physical, cultural, or linguistic characteristics identified with people of a particular nation. • In fact, if the discrimination is based on physical, cultural, or linguistic traits identified with a particular nation, even the plaintiff's ancestors need not have been born there. Thus, a person of pure French ancestry may have a Title VII case if she suffers discrimination because she looks like, acts like, or talks like a German. • Employers who hire only U.S. citizens may violate Title VII if their policy has the purpose or effect of discriminating against one or more national origin groups. This could happen where the employer is located in an area where aliens of a particular nationality are heavily concentrated. • Also, employment criteria such as height, weight, and fluency in English may violate Title VII if they have a disparate impact on a national origin group and are not job related.
Labor Management Reporting and Disclosure Act (Landrum-Griffin Act) of 1959
• during the 1950s uncovered corruption in internal union affairs and also revealed that the internal procedures of many unions were undemocratic • The act established a "bill of rights" for union members and attempted to make internal union affairs more democratic. • It also amended the NLRA by adding to the LMRA's list of unfair union labor practices. The proportion of U.S. workers who are members of labor unions has decreased fairly steadily over the past 40 years. Today, less than 13 percent of the workforce are members of labor unions.
Who does the ADA (Americans with Disabilities Act) protect? Which employers are subject to the ADA? What are the different theories? Are there defenses? What are the remedies?
• forbids covered entities from discriminating against qualified individuals with a disability because of that disability. • This portion of the ADA is primarily enforced by the EEOC, and its procedures and remedies are the same as for Title VII. • covering employers who are engaged in interstate commerce and who employ 15 or more employees.
Executive Order 11246
• forbids race, color, national origin, religion, and sex discrimination by certain federal contractors. • The order is enforced by the Labor Department's Office of Federal Contract Compliance Programs (OFCCP). • In the past, OFCCP enforcement has included affirmative action requirements and occasionally quota like preferences benefiting racial minorities.
Johnson v. J. Walter Thompson case
• he harassed her. His alleged campaign of harassment included making jokes about rape and sexual assault, directed at both Johnson and others; physically touching and assaulting Johnson; making routine references to sex; making comments sexualizing and demeaning women's bodies; and denigrating women, including Johnson, for being "bossy." • Johnson complained about this behavior on numerous occasions to various high-ranking officials at JWT and WPP. According to Johnson, all of these complaints were for naught. • Johnson ultimately filed suit against JWT and WPP for, among other claims, violating Title VII's prohibition against sex discrimination, alleging a hostile environment based on sex. • The defendants moved to dismiss Johnson's complaint for failure to state a claim upon which relief can be granted. The District Court's ruling on that motion follows. • To state a claim for a hostile work environment in violation of Title VII, a plaintiff must plead facts that would tend to show that the complained of conduct: (1) is objectively severe or pervasive—that is, creates an environment that a reasonable person would find hostile or abusive; (2) creates an environment that the plaintiff subjectively perceives as hostile or abusive; and (3) creates such an environment because of the plaintiff's sex." • 1) Objective Hostility- The first element of a claim • The alleged conduct, viewed together, must be "sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment." • "even if overtly gender-based discriminatory conduct is merely episodic and not itself severe, the addition of 'physically threatening ... behavior may cause 'offensive or boorish conduct' to cross the line into 'actionable sexual harassment.' " • Defendants argue that many such comments suggest merely a lack of civility, and, in any event, were not gender-motivated because some of the comments were made in mixed company (and therefore not specifically directed at women). • Defendants argue that still other remarks allegedly made by Martinez should be discounted because they are not overtly or intentionally "sexual." • But every comment underpinning a hostile work environment claim need not be "sexual in nature." • Johnson has pleaded enough to support a plausible inference that an objectively hostile work environment existed.... • 2) Subject Hostility-Second element of hostile work environment claim • "The effect on the employee's psychological well-being is ... relevant to determining whether the plaintiff actually found the environment abusive," but such a showing is not "required." • Defendants do not appear to contest the effect of the alleged conduct on Johnson herself. Indeed, Johnson claims that she was "intimidate[d] and humiliate[d]" by Martinez's treatment of her. • 3) Causation- third element • Johnson alleges a fair number of interactions and comments that, on their face, were sex-based, such as commenting on women's bodies, including Johnson's, and making sexual remarks about women (including that a female employee is "young, willing, and ready"). • In threatening to "rape" Johnson (even jokingly) and asking which other female employees he could rape, Martinez asserted power over Johnson in an explicitly sexualized and gendered form.* • Martinez's repeatedly touching Johnson (including grabbing her by the neck and shoving her, as well as taking her apple from her hand, taking a bite, and returning it) as part of a broader effort to intimidate her physically because of her sex. • Conclusion • The totality of Martinez's alleged conduct, both overtly sex-based or sexual and not, can be read as a campaign to assert power over Johnson—to sexualize her, to demean her, to professionally diminish her, and to deprive her of bodily security—because of her sex. Johnson's Title VII hostile work environment claim therefore survives the motion to dismiss. • For the foregoing reasons, Defendants' motion to dismiss is DENIED.
What is a reasonable accommodation?
• includes making existing facilities readily accessible and usable, acquiring new equipment, restructuring jobs, modifying work schedules, and reassigning workers to vacant positions, among other options.
What is social security?
• law requires that employers help ensure their employees' financial security after the employment ends. One example is the federal Social Security system.
Does an agent need to be an employee in direct liability cases? Is there a scope of employment requirement?
• no scope-of-employment requirement exists in direct liability cases, and the agent need not be an employee
Who does the ADEA (Age Discrimination in Employment Act) protect? What employers are subject to the ADEA?
• prohibits age-based employment discrimination against employees who are at least 40 years of age. • U.S. Supreme Court decided that it is not a violation of the ADEA for an employer to favor older employees over younger employees, even if the younger employees are in the 40-and-over age range. • Coverage • covers individuals, partnerships, labor organizations and employment agencies (as to their employees), and corporations that: • (1) engage in an industry affecting interstate commerce • (2) employ at least 20 persons. • In addition, the ADEA reaches labor union practices affecting union members; usually, unions with 25 or more members are covered. • The ADEA protects against age discrimination in many employment contexts, including hiring, firing, pay, job assignment, and fringe benefits. • Procedural Requirments • plaintiff must file a charge with the EEOC/ EEOC also may sue to enforce the ADEA • For both government and private suits, the statute of limitations is three years from the date of an alleged willful violation and two years from the date of an alleged nonwillful violation. • Proof • Like Title VII, the ADEA includes both disparate treatment and disparate impact theories of discrimination. • ADEA does not incorporate mixed-motives claims of disparate treatment • Plaintiffs, thus, must prove that age was the "but-for" cause of the challenged employment decision • disparate impact theory is available under the ADEA • Most notably, when a plaintiff proves that an employer's age-neutral policy or practice results in an adverse impact on the basis of age, the employer's defense is not to prove business necessity. Rather, based on the ADEA's reasonable factors other than age defense, the employer only needs to prove that the policy or practice was reasonable under the circumstances. • Obviously, because what is reasonable may not be necessary, employers generally find ADEA disparate impact claims easier to defend than analogous Title VII claims. • ADEA has a bona fide occupational qualification (BFOQ) defense (must show that its age classification is reasonably necessary to the proper performance—usually the safe performance—of the job in question)
What is the purpose of the USERRA (Uniformed Services Employment and Reemployment Rights Act)? Does it apply to an employer with only one employee? When must an employer reinstate an employee to his "rightful position"? Are there defenses? What is the escalator principle? Why is USERRA sometimes considered an onerous law for small businesses?
• prohibits employers of any size from discriminating against members of the uniformed military service, including reservists and members of the National Guard. In addition to the general nondiscrimination mandate, USERRA also grants such employees the right of reemployment following an absence from the workplace for military service, for up to five years. As long as the employee provides the employer advance written or oral notice of the leave, receives an honorable discharge, and makes a timely request for reemployment, the employer must reinstate the employee to his rightful position upon his return. • Under USERRA's "escalator principle," a returning service member's rightful position is the job that he would have attained had he not been absent for military service, with the same seniority, status, and pay, with other rights and benefits determined by seniority. The escalator principle incorporates any routine promotions and pay raises the employee would have gotten. • Employers are provided limited defenses to the reemployment requirement, including (1) that a change in circumstances that renders reemployment "unreasonable or impossible" (e.g., the business closed or the position has been completely eliminated), (2) that retraining or accommodating a disabled veteran would impose an "undue hardship," or (3) that the original position carried no expectation of continued employment (e.g., seasonal or project-based employment).
What is the purpose of the Immigration Reform and Control Act? Can an employee pursue both an IRCA claim and a Title VII claim?
• prohibits employers with four or more employees from refusing to hire or terminating an employee on the basis of national origin or citizenship. • This prohibition overlaps with Title VII's ban on national origin discrimination; however, a complainant *cannot pursue claims* under both statutes. • IRCA's nondiscrimination mandate applies only to U.S. citizens and legal immigrants. • IRCA also prohibits employers from knowingly employing or recruiting unauthorized immigrants.
What is the purpose of GINA (Genetic Information Nondiscrimination Act)?
• prohibits employment discrimination on the basis of an individual's genetic information and prohibits employers from requesting, collecting, or purchasing genetic information.
What is a publicly held corporation?
• shares are generally available to public investors. The publicly held corporation tends to be managed by professional managers who own small percentages of the corporation. • Nearly all the shareholders of the typical publicly held corporation are merely investors who are not concerned in the management of the corporation.
Section 1981
•Protects discrimination against race, Racially characterized national origin, perhaps aliens Section 1981 is important because it gives covered plaintiffs certain advantages that Title VII does not provide. • Title VII's methods of proof in Section 1981 cases, Title VII's limitations on covered employers and its complex procedural requirements do not apply. • Also, damages are apt to be greater under Section 1981; in particular, Title VII's limits on compensatory and punitive damages are inapplicable. covered plaintiffs often include a Section 1981 claim along with a Title VII claim in their complaint. • Because Title VII's limitations on covered employers and its complex procedural requirements do not apply to section 1981
What are the different kinds of legislation that protect wages, pensions, and benefits?
•Unemployment Compensation •Social Security •ERISA •Fair Labor Standards Act
Does a principal have to notify third parties of termination? When? How?
Apparent authority ends only when the third party receives appropriate notice of the termination, that is, when it is no longer reasonable for a third party to believe that the agent has actual authority. Under the Restatement (Third) of Agency, an agent's apparent authority may continue even after the principal's death or loss of capacity. An agent may act with apparent authority following the principal's death or loss of capacity because the basis of apparent authority is a principal's manifestation to third parties, coupled with a third party's reasonable belief that the agent acts with actual authority. When third parties do not have notice that the principal has died or lost capacity, they may reasonably believe the agent to be authorized. The rule that the principal's death does not automatically terminate apparent authority is consistent with the interest of protecting third parties who act without knowledge of the principal's death or loss of capacity. To protect themselves against unwanted liability, however, prudent principals will want to notify third parties themselves. The required type of notification varies with the third party in question. 1. For third parties who have previously dealt with the agent or who have begun to deal with the agent, actual notification is necessary. This can be accomplished by (1) a direct personal statement to the third party or (2) a writing delivered to the third party personally, to his place of business, or to some other place reasonably believed to be appropriate. 2. For all other parties, constructive notification suffices. Usually, these other parties are aware of the agency but did no business with the agent. Constructive notification normally can be accomplished by advertising the agency's termination in a newspaper of general circulation in the place where the agency business regularly was carried on. If no suitable publication exists, notification by other means reasonably likely to inform third parties—for example, posting a notice in public places or at a website—may be enough.
Gniadek case
a summer camp counselor's actual authority terminated when the summer season ended. His apparent authority ceased when a camper learned that he had finished his stint at the camp. For that and other reasons, the camp that previously employed him was not liable for his assault of the camper. During the night, Newton assaulted Gniadek. Newton was charged with assault and consented to a charge of assault in the third degree in the Connecticut Superior Court. He was sentenced to five years in jail. After learning about the assault, the camp sent Newton a letter informing him that his volunteer services were no longer needed at Camp Sunshine. The letter also instructed him not to "solicit, recruit, speak on behalf of, or represent Camp Sunshine." In 2008, Gniadek sued Camp Sunshine alleging, among other grounds, vicarious liability of Camp Sunshine for the acts of Newton. At the close of discovery, the trial court granted the camp's motion for summary judgment, finding that Newton was not Camp Sunshine's agent at the time of the assault. Gniadek appealed to the Supreme Judicial Court of Connecticut. Supreme Court ruling Gniadek contends that Newton committed his tort under the apparent authority of the Camp. The Restatement (Third) of Agency § 7.08 specifically addresses tortious liability for acts of agents cloaked with apparent authority. That section states: "A principal is subject to vicarious liability for a tort committed by an agent in dealing or communicating with a third party on or purportedly on behalf of the principal when actions taken by the agent with apparent authority constitute the tort or enable the agent to conceal its commission." Here, when Newton invited Gniadek to accompany him on a trip to New York, he told her that he had finished with Camp. By this statement, he conveyed that he was no longer acting with the actual authority of Camp Sunshine. the assault was not committed with apparent authority. Newton's conduct does not fall within the scope of section 7.08. Judgment for Camp Sunshine affirmed.
What are the three different classifications of corporations?
(1) Corporations for profit (2) Corporations not for profit (3) Government-owned corporations.
An agency can terminate in many ways that fall under two general headings:
(1) termination by act of the parties (2) termination by operation of law.
What is the effect of intervening events?
*Certain events occurring after an agent's contract but before the principal's ratification may cut off the principal's power to ratify. (1) the third party's withdrawal from the contract (2) the third party's death or loss of capacity, (3) the principal's failure to ratify within a reasonable time (assuming that the principal's silence did not already work a ratification) (4) where it would be inequitable to bind the third party.
Partnership
-Basically a sole proprietorship with 2 owners who share all the profits. -• Partners assume unlimited liability for all the obligations of the business. • Like the sole proprietorship, the partnership is not a tax-paying entity for federal income tax purposes. All of the income of the partnership is income to its partners and must be reported on the individual partners' federal income tax • When a partner dies or otherwise leaves the business, the partnership usually continues. • A partner's ownership interest in a partnership is not freely transferable: A purchaser of the partner's interest is not a partner of the partnership, unless the other partners agree to admit the purchaser as a partner.
Limited Liability Partnership (LLP)
-Business form created for professionals -A partnership that has elected to obtain limited liability for its partners by filing with the secretary of state -identical to a partnership except that an LLP partner has no liability for most LLP obligations -LLP partner retains unlimited liability for his own wrongful acts, such as his malpractice liability to a client. -May elect to have the LLP taxed like a partnership or a corporation. • If an 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.
Corporations
-By agreement of owners; must comply with corporate statute -Unaffected by death or withdrawal of shareholder -Managed by board of directors -Liability is limited to capital contribution, except for owners individual torts -ownership is freely transferable although shareholders may agree otherwise -Double taxation- Corporate taxed; shareholders taxed on dividends
When is a principal directly liable for an agent's torts?
1) Principle intends and direct agent's intentional tort, recklessness, or negligence, or 2) Principle is negligent regarding hiring or training of agent • Usually, this means the principal directs the agent's conduct and intends that it occur. In such cases, the agent's behavior might be intentional, reckless, or negligent. For instance if Lawn Mower Company directs its agent Agnew to sell defective lawn mowers to Landscape Company, Lawn Mower Company is directly liable to Landscape Company. Likewise, Procenture Consulting Company would be liable for harm to clients caused by its ordering its consulting employees to complete an engagement in an unreasonable, substandard manner.
When is a principle liable for the torts of a Non employee agent?
1. A principal can be directly liable for tortious behavior connected with the retention of a nonemployee agent. One example is the hiring of a dangerously incompetent nonemployee agent. 2. A principal is liable for harm resulting from the nonemployee agent's failure to perform a duty of care, which duty the principal owes to other persons but has delegated to the agent. A duty of care is a duty whose proper performance is so important that a principal cannot avoid liability by delegating it to an agent. This is often termed a nondelegable duty. Examples include a carrier's duty to transport its passengers safely, a municipality's duty to keep its streets in repair, a railroad's duty to maintain safe crossings, and a landlord's duties to make repairs and to use care in doing so. Thus, a landlord who retains a nonemployee agent to repair the stairs in an apartment building is liable for injuries caused by the agent's failure to repair the stairs properly.
When are agents not liable for their own torts?
1. An agent can escape liability if she is exercising a privilege of the principal. Suppose that Tingle grants Parkham a right-of-way to transport his farm products over a private road crossing Tingle's land. Parkham's agent Adams would not be liable in trespass for driving across Tingle's land to transport farm products if she did so at Parkham's command. However, an agent must not exceed the scope of the privilege and must act for the purpose for which the privilege was given. Thus, Adams would not be protected if she took her Jeep on a midnight joyride across Tingle's land. Also, the privilege given the agent must be delegable in the first place. If Tingle had given the easement to Parkham exclusively, Adams would not be privileged to drive across Tingle's land. 2. A principal who is privileged to take certain actions in defense of his person or property may often authorize an agent to do the same. In such cases, the agent escapes liability if the principal could have done so. For example, a Walmart warehouse guard may use force to protect the property in Walmart's warehouse. 3. An agent who makes misrepresentations while conducting the principal's business is not liable in tort unless he either knew or had reason to know their falsity. Suppose Parker authorizes Arnold to sell his house, falsely telling Arnold that the house is fully insulated. Arnold does not know that the statement is false and could not discover its falsity through a reasonable inspection. If Arnold tells Thomas that the house is fully insulated and Thomas relies on this statement in purchasing the house, Parker is directly liable to Thomas, but Arnold is not liable. 4. An agent is not liable for injuries to third persons caused by defective tools or instrumentalities furnished by the principal unless the agent had actual knowledge or reason to know of the defect.
Termination by Act of the Parties
1. At a time or upon the happening of an event stated in the agreement. If no such time or event is stated, the agency terminates after a reasonable time. 2. When a specified result has been accomplished, if the agency was created to accomplish a specified result. For example, if an agency's only objective is to sell certain property, the agency terminates when the property is sold. 3. By mutual agreement of the principal and the agent, at any time. 4. At the option of either party. This is called revocation- when done by the principal and renunciation- when done by the agent. Revocation or renunciation occurs when either party manifests to the other that he does not wish the agency to continue. This includes conduct inconsistent with the agency's continuance. For example, an agent may learn that his principal has hired another agent to perform the same job.
Most courts find that an employee's conduct is within the scope of his employment if it meets each of the following four tests:
1. It was of the kind that the employee was employed to perform. To meet this test, an employee's conduct need only be of the same general nature as work expressly authorized or be incidental to its performance. 2. It occurred substantially within the authorized time period. This is simply the employee's assigned time of work. Beyond this, there is an extra period of time during which the employment may continue. 3. It occurred substantially within the location authorized by the employer. This includes locations not unreasonably distant from the authorized location. 4. It was motivated at least in part by the purpose of serving the employer. This test is met when the employee's conduct was motivated to any appreciable extent by the desire to serve the employer. Thus, an employee's tort may be within the scope of employment even if the motives for committing it were partly personal.
requirements to Ratification
1. The act ratified must be one that was valid at the time it was performed. For example, an agent's illegal contract cannot be made binding by the principal's subsequent ratification. However, a contract that was voidable when made due to the principal's incapacity may be ratified by a principal who has later attained or regained capacity. 2. The principal must have been in existence at the time the agent acted. However, as discussed in Chapter 42, corporations may bind themselves to their promoters' pre-incorporation contracts by adopting such contracts. 3. 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 for herself. The agent need not, however, have disclosed the principal's identity. 4. The principal must have legal capacity at the time of ratification. For instance, an insane principal cannot ratify. 5. The principal must have knowledge of all material facts regarding the prior act or contract at the time it is ratified. Here, an agent's knowledge is not imputed to the principal. 6. The principal must ratify the entire act or contract. He cannot ratify the beneficial parts of a contract and reject those that are detrimental. 7. In ratifying, the principal must use the same formalities required to give the agent authority to execute the transaction. As Chapter 35 stated, few formalities normally are needed to give an agent authority. But when the original agency contract requires a writing, ratification likewise must be written. Note that a principal's ratification is binding even if not communicated to the third party. Also, once a principal has ratified a contract, the principal is estopped from denying its ratification if the other party has been induced to make a detrimental change in position.
There are other grounds for termination not listed in the Restatement (Third):
1. The agent's loss of capacity to perform the agency business. The scope of this basis for termination is unclear. As Chapter 36 states, an agent who becomes insane or otherwise incapacitated after the agency is formed still can bind his principal to contracts with third parties. Thus, it probably makes little sense to treat the agency as terminated in such cases. As a result, termination under this heading may be limited to such situations as the loss of a license needed to perform agency duties. 2. Changes in the law that make the agency business illegal (e.g., when drugs to be sold by an agent are banned by the government). 3. The principal's bankruptcy—as to transactions the agent should realize the principal no longer desires. For example, consider the likely effect of the principal's bankruptcy on an agency to purchase antiques for the principal's home versus its likely effect on an agency to purchase necessities of life for the principal. 4. The agent's bankruptcy—where the agent's financial condition affects his ability to serve the principal. This could occur when an agent is employed to purchase goods on his own credit for the principal. 5. Impossibility of performance by the agent. This covers various events, some of which fall within the categories just stated, for example, (a) destruction of the agency subject matter, (b) termination of the principal's interest in the agency subject matter (as, for example, by the principal's bankruptcy), and (c) changes in the law or in other circumstances that make it impossible for the agent to accomplish the agency's aims. 6. A serious breach of the agent's duty of loyalty. 7. The outbreak of war—when this leads the agent to the reasonable belief that his services are no longer desired. An example might be the outbreak of war between the principal's country and the agent's country.
Termination by Operation of Law
1. The death of an individual principal. Under the Restatement (Third) of Agency, this termination is effective only when the agent has notice of the principal's death. 2. The death of an individual agent. 3. The principal's permanent loss of capacity. This is a permanent loss of capacity occurring after creation of the agency—most often, due to the principal's insanity. The principal's permanent incapacity ends the agency even without notice to the agent. 4. The cessation of existence or suspension of power of an agent or principal that is not an individual, such as the dissolution of a corporation or partnership. 5. Upon the occurrence of circumstances from which the agent should reasonably conclude that the principal no longer would want the agent to take action for the principal. Changed circumstances include: Changes in the value of the agency property or subject matter (e.g., a significant decline in the value of land to be sold by an agent). Changes in business conditions (e.g., a much lower supply and a much increased price for goods to be purchased by an agent). The loss or destruction of the agency property or subject matter or the termination of the principal's interest therein (e.g., when a house to be sold by a real estate broker burns down or is taken by a mortgage holder to satisfy a debt owed by the principal).
When won't an agent be liable for making an unauthorized contract?
1. The third party actually knows that the agent lacks authority. Note from the previous example, however, that the agent still is liable where the third party merely had reason to know that authority was lacking. 2. The principal subsequently ratifies the contract. Here, the principal is bound, and there is no reason to bind the agent. 3. The agent adequately notifies the third party that he does not warrant his authority to contract.
When is a principal liable for torts committed by an agent? Direct Vs. Vicarious
A principal's liability for an agent's torts may be found on either of two bases: 1. Vicarious liability, including respondeat superior. 2. Direct liability. Direct liability requires that the principal be at fault; a principal's vicarious liability requires only that the agent be at fault. For some torts, a principal may have both direct and vicarious liability.
How must professionals incorporate?
All of the states require professionals who wish to incorporate, such as physicians, dentists, lawyers, and accountants, to incorporate under professional corporation acts.
S-Corporation
By agreement of Owners; Must comply with corporation statute; must elect s corporation status under Internal Revenue Code Unaffected by death or withdrawal of shareholder controlled by board of directors Liability is limited to capital contribution, except for owners individual torts Income and losses of the business are reported on the shareholders' individual federal income tax returns. A corporation electing S corporation status may have no more than 100 shareholders, have only one class of shares, and be owned only by individuals and trusts. ADV: • Losses of the business are deductible on individual federal income tax returns. DIS ADV: because the S corporation is limited to 100 shareholders, its ability to raise capital is severely limited While legally permitted to sell their shares, S corporation shareholders may be unable to find investors willing to buy their shares or may be restricted from selling their shares pursuant to an agreement between the shareholders.
Can all of a principal's duties be delegated to an agent?
Certain duties or acts must be performed personally and cannot be delegated to an agent. Examples include making statements under oath, voting in public elections, and signing a will. The same is true for service contracts in which the principal's personal performance is crucial, such as, certain contracts by lawyers, doctors, athletes, and entertainers. For example, the guitarist for Lady Gaga may not delegate to another guitarist his duty to perform at a Lady Gaga concert in Soldier Field.
What are the three main considerations involved in choosing a form of business?
Control Taxation Liability
What is the difference between an employee and a nonemployee agent?
Employee (servant) Nonemployee agent (independent contractor) [The Restatement (Third) does not use the term independent contractor because that term can designate either an agent or a non-agent, creating further ambiguity.] No sharp line separates employees from nonemployee agents.
domination
If a shareholder causes a corporation to act to the personal benefit of the shareholder • For example, a majority shareholder's directing a corporation to pay the shareholder's personal expenses is domination. Domination is also proved if the controlling shareholders cause the corporation to fail to observe corporate formalities (such as failing to hold shareholder and director meetings or to maintain separate accounting records).
• Reid factors
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; and the tax treatment of the hired party.
Exculpatory Clause
Such clauses typically state that the agent has authority only to make the representations contained in the contract and that only those representations bind the principal. Exculpatory clauses do not protect a principal who intends or expects that an agent will make false statements. Otherwise, though, they insulate the principal from tort liability if the agent misrepresents a material fact. But the third party still may rescind the transaction because it would be unjust to let the principal benefit from the transaction while disclaiming responsibility for it.
Why is a 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 the agent's loss of capacity, (3) the agent's death, and (4) the principal's death. However, unless it is held for the benefit of a third party, the agent can voluntarily surrender it. Of course, it terminates when the principal performs her obligation.
What is estoppel? What gives rise to estoppel liability?
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. The liable person must either: 1) Intentionally or carelessly cause the third party's belief, or 2) Having notice that such belief might cause a third party to change his position, fail to take reasonable steps to notify the third person of the facts.
Actual Authority
consent must be communicated to the agent 2 forms: Expressed: Actual authority that the principal has manifested to the agent in very specific or detailed language. For example, a principal—a homeowner—may tell her agent—a tree removal expert—that the agent is authorized to "remove the diseased ash tree in my front yard." Implied: An agent generally has implied authority to act in a way the agent reasonably believes is necessary to perform his duties. For example, the tree removal expert in the example above would have authority to choose a method for removing the tree, such as topping the tree first and removing it in sections or felling the tree with one cut. Relevant factors include the principal's statements, or actions, the nature of the agency, the acts reasonably necessary to carry on the agency business, and the acts customarily done when conducting that business.
Green v. Cosby Case
covers both direct liability and respondeat superior • after having been sexually assaulted by an entertainer, William H. Cosby, Jr. (Defendant), he publicly defamed her in statements made by individuals operating at his discretion and/or within the scope of their employment. • Respondeat superior is a "doctrine holding an employer or principal liable for the employee's or agent's wrongful acts committed within the scope of the employment or agency." • Under the direct liability theory, Defendant would be held liable on the basis of his own fault for his conduct and involvement regarding the statements. • The Court thus accepts all of the Plaintiffs' well-pled averments as true and finds respondeat superior liability is sufficiently pled. • At this stage of the litigation, it would be unreasonable for the Court to view these particular circumstances, responding to very serious accusations of the nature involved here, as not having the direct involvement of Defendant. • The Court thus finds direct liability is sufficiently pled and Defendant's motions to dismiss are denied in their entirety.
professional corporation
identical to a business corporation in most respects. It is formed only by a filing with the secretary of state, and it is managed by a board of directors, unless a statute permits it to be managed like a partnership. The rigid management structure makes the professional corporation inappropriate for some smaller professional practices. Fewer and fewer professionals incorporate each year. All of the liability and taxation advantages of the professional corporation have been assumed by the LLP. In addition, most professionals like the flexible management structure of the LLP better. • professional shareholders have no personal liability for the obligations of the professional corporation, such as a building lease, they retain unlimited liability to their clients for their professional malpractice. • A professional will have no personal liability, however, for the malpractice of a fellow shareholder or associate. • Typically, only professionals holding the same type of license to practice a profession may be shareholders of a professional corporation. • Professional corporation shareholders may elect for the corporation to be taxed like a corporation, or they may elect S corporation tax treatment.
• Unidentified Principle
if the third party (1) knows or has reason to know that the agent is acting for a principal but (2) lacks knowledge or reason to know the principal's identity.
How are most for profit corporations incorporated?
incorporated under the general incorporation law of a state.
Apparent Authority
must be communicated to the third party Sometimes, an agent who lacks actual authority may still appear to have such authority, and third parties may reasonably rely on this appearance of authority. To protect third parties in such situations, agency law lets agents bind the principal on the basis of their apparent authority. Apparent authority arises when the principal's manifestations cause a third party to believe reasonably that the agent is authorized to act in a certain way. Apparent authority depends on what the principal communicates to the third party—either directly or through the agent. A principal might clothe an agent through statements to the third party, telling an agent to do so, or allowing an agent to behave in a way that creates an appearance of authority. The principal's communications to the agent are irrelevant unless they become known to the third party or affect the agent's behavior.
Limited Partnership (LP)
one or more general partners and one or more limited partners General partners have rights and liabilities similar to partners in a partnership. They manage the business of the limited partnership and have unlimited liability for the obligations of the limited partnership. Limited partners usually have no liability for the obligations of the limited partnership once they have paid their capital contributions to the limited partnership. Limited partners have no right to manage the business, but if they do manage, they nonetheless retain their limited liability. Like an LLP, a limited partnership may elect to be taxed either as a partnership or as a corporation. • When a partner dies or otherwise leaves the business, the limited partnership is not dissolved, unless there is no remaining general partner or no remaining limited partner.
What are the duties an agent owes to the principal?
• (1) avoiding conflicts of interest with the principal • (2) not disclosing confidential information received from the principal.
An agent may expressly bind herself by:
• (1) making the contract in her own name rather than in the principal's name • (2) joining the principal as an obligor on the contract • (3) acting as surety or guarantor for the principal.
Who can be an agent? What is capacity?
• A person has the capacity to be a principal if that person has capacity to do the acts for which the agent has been retained. • For example, a person competent to make a contract to purchase a building has the capacity to appoint an agent for that purpose. • Usually, any person may be an agent, including a person who cannot make his own contracts. An agent must merely understand that he is acting for someone else and is under her control.
When does an agent have the authority to bind a principal to a contract?
• A principal normally is liable on a contract made by his agent if the agent had actual or apparent authority to make the contract.
What is the effect of ratification?
• A process whereby a principal binds himself to an unauthorized act done by an agent, or by a person purporting to act as an agent. • Ratification relates back to the time when the contract was made. It binds the principal as if the agent had possessed authority at that time.
What is direct liability?
• Principle is directly liable for the acts of his agent • Examples of direct liability for negligence include (1) giving the agent improper or unclear instructions; (2) failing to make and enforce appropriate regulations to govern the agent's conduct; (3) hiring an unsuitable agent; (4) failing to discharge an unsuitable agent; (5) furnishing an agent with improper tools, instruments, or materials; and (6) failing to properly supervise an agent. Today, suits for negligent hiring are common.
When does an agent risk breaching a fiduciary duty? Agent Gratuitous Agent Subagent
• Agent- The principal's many remedies for an agent's breach of her fiduciary duty include termination of the agency and recovery of damages from the agent. • Gratuitous Agent- usually has the same fiduciary duty as a paid agent, but need not perform as promised. She normally can terminate the agency without incurring liability. However, a gratuitous agent is liable for failing to perform as promised when her promise causes the principal to rely upon her to undertake certain acts, and the principal suffers losses because he refrained from performing those acts himself. • Subagent- owes the agent (his principal) all the duties agents owe their principals. A subagent who knows of the original principal's existence also owes that principal all the duties agents owe their principals, except for duties arising solely from the original principal's contract with the agent. Finally, the agent who appointed the subagent generally is liable to the original principal when the principal is harmed by the subagent's
gratuitous agents
• An agent who receives no compensation for his services • Gratuitous agents have the same power to bind their principals as do paid agents with the same authority. • However, the fact that an agent is gratuitous sometimes lowers the duties principal and agent owe each other and also may increase the parties' ability to terminate the agency without incurring liability.
What is the purpose of apparent authority?
• Apparent authority protects third parties who reasonably rely on the principal's manifestations that the agent has authority. • It assumes special importance in cases where the principal has told the agent not to make certain contracts that the agent ordinarily would have actual authority to make, but the third party knows nothing about this limitation and has no reason to know about it.
What is a fiduciary's duty?
• As a fiduciary, the agent must use the entrusted power and property in the best interest of the principal.
What is actual authority based on?
• Authority the principal wants the agent to possess. It is based on communications or manifestations from the principal to the agent.
What is piercing the corporate veil? When will a court pierce the corporate veil (what are the requirements)?
• Corporation law erects an imaginary wall between a corporation and its shareholders that protects shareholders from liability for a corporation's actions. Once shareholders have made their promised capital contributions to the corporation, they have no further financial liability. • Holding a shareholder responsible for acts of a corporation due to a shareholder's domination and improper use of the corporation. *2 Requirements must exist* (1) domination of a corporation by its shareholders (2) use of that domination for an improper purpose.
What is implied authority?
• Do whatever it is reasonable to assume that his principal wanted him to do, in light of the principal's manifestations to the agent and the principal's objectives of the agency. • Relevant factors include the principal's express statements, the nature of the agency, the acts reasonably necessary to carry on the agency business, the acts customarily done when conducting that business, and the relations between principal and agent. • usually derives from a grant of express authority by the principal • Courts generally derive implied authority from the nature of the agency business, the relations between principal and agent, customs in the trade, and other facts and circumstances (unless expressly stated by the principle) *Examples* 1. An agent hired to manage a business normally has implied authority to make contracts that are reasonably necessary for conducting the business or that are customary in the business. These include contracts for obtaining equipment and supplies, making repairs, employing employees, and selling goods or services. However, a manager ordinarily has no power to borrow money or issue negotiable instruments in the principal's name unless the principal is a banking or financial concern regularly performing such activities. 2. An agent given full control over real property has implied authority to contract for repairs and insurance and may rent the property if this is customary. But such an agent may not sell the property or allow any third-party liens or other interests to be taken on it. 3. Agents appointed to sell the principal's goods may have implied authority to make customary warranties on those goods. In states that still recognize the distinction, a general agent described in Chapter 35 is more likely to have such authority than a special agent.
three main reasons persons organize a business as a limited partnership (LP)
• 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.
When is an agency relationship created?
• If the facts establish an agency, neither party need know about the agency's existence or subjectively desire that it exist. In fact, an agency may be present even when the parties expressly say that they do not intend to create it, or intend to create some other legal relationship instead.
thin capitalization
• Shareholders must organize a corporation with sufficient capital to meet the initial capital needs of the business. • Inadequate capitalization, called thin capitalization, is proved when capitalization is very small in relation to the nature of the business of the corporation and the risks the business necessarily entails.
What is the most important factor in determining whether someone is an employee or a nonemployee agent?
• The most important of these factors is the principal's right to control the manner and means of the agent's performance or work. • Employees typically are subject to such control. Nonemployee agents, on the other hand, generally contract with the principal to produce a result and determine for themselves how that result will be accomplished.
North Atlantic Instruments Vs. Haber Case
• In the absence of an agreement to the contrary, after the agency ends almost all fiduciary duties terminate. For example, an agent may compete with her principal after termination of the agency. As the following North Atlantic Instruments, Inc. case illustrates, however, the duty not to use or disclose confidential information continues after the agency ends. The former agent may, however, utilize general knowledge and skills acquired during the agency. • Background • In July 1997, Haber left North Atlantic to join Apex Signal Corp., a company that manufactures products targeting the same niche market as North Atlantic's TMI division. • he began calling the client contacts he had used and developed while at North Atlantic and TMI and asking that they leave North Atlantic to do business with Apex. • Haber's Employment Agreement requires that he "keep secret and retain in the strictest confidence all confidential matters which relate to [North Atlantic], including, without limitation, customer lists, trade secrets, pricing policies and other confidential business affairs of [North Atlantic] ... and any affiliate." The agreement also prohibits him from "disclos[ing] any such confidential matter to anyone." The Employment Agreement contains no limitation on its duration; rather it applies both "during [and] after his period of service with [North Atlantic]." In this way, it makes explicit an employee's implied duties under New York law with respect to confidential information. • Because North Atlantic has demonstrated a likelihood of success on the merits and because it would suffer irreparable harm in the absence of an injunction, we conclude that the District Court did not exceed its allowable discretion in granting a preliminary injunction. • Judgment in favor of North Atlantic affirmed.
CBS vs SEC Case
• In the following case, the court determined that entertainers Janet Jackson and Justin Timberlake were not employees of CBS during the Super Bowl broadcast of their infamous halftime show. • Background • CBS was vicariously liable for the willful actions of its employees, Jackson and Timberlake. CBS asked the Third Circuit Court of Appeals to review the FCC decision. • The respondeat superior doctrine provides that "[a]n employer is subject to liability for torts committed by employees while acting within the scope of their employment." Restatement (Third) of Agency § 2.04 (2006) • Determining whether CBS may be liable under respondent superior first requires selection of the applicable legal standard for differentiating an "employee" from an "independent contractor." • Reid factors- In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; and the tax treatment of the hired party. • On balance, the relevant factors here weigh heavily in favor of a determination that Jackson and Timberlake were independent contractors rather than employees of CBS. Accordingly, the doctrine of respondent superior does not apply on these facts. • FCC order vacated in favor of CBS.
DePetris & Bachrach LLP v. Srour Case
• In this case, the Court finds that the doctrine of apparent authority is irrelevant because the causes of action alleged are not seeking to hold the principals liable on the ground that defendants-respondents had apparent authority to make promises of payment. • Rather, these causes of actions are seeking to hold the agents, defendants-respondents, liable for contracts or representations they purported to make on behalf of the principal while acting without authority from the principal. The trial court thus erred in relying on the principle of apparent authority. •However higher up court found the president of a dissolved corporation liable for breaching the agent's implied warranty of authority. • Judgment modified in part and affirmed in part.
Frontier Leasing Vs. Links Engineering
• Iowa Supreme Court considered whether a golf course professional had authority to lease a beverage cart on behalf of the golf course and whether the golf course had ratified the lease or was estopped to deny the authority of the golf pro to make the lease. • Clute submitted an affidavit stating Fleming did not have authorization to enter into financing agreements. Nonetheless, Bluff Creek had made some payments on the cart lease to C&J Leasing prior to Clute learning about the lease. • Bluff Creek was sued for breach of contract. The district court issued a summary judgment that Fleming had authority to bind Bluff Creek on the contract and that Bluff Creek was liable to the lessor, Frontier Leasing Corporation, which had acquired from C&J Leasing the rights to collect on the lease. • Supreme Court • Actual authority includes both express and implied authority. Express authority is derived from specific instructions by the principal in setting out duties, while implied authority is actual authority circumstantially proved. • Under the doctrine of estoppel, the principal is liable if he (1) causes a third party to believe an agent has the authority to act, or (2) has notice that a third party believes an agent has the authority and does not take steps to notify the third party of the lack of authority. • Ruling • Because reasonable minds could draw different inferences from the record as to whether Fleming had authority to bind Bluff Creek to the equipment lease, we reverse the district court's grant of summary judgment. • Judgment for Bluff Creek affirmed. Remanded to the trial court.
What law typically governs agency relationships?
• Much of the law of agency, which is largely state law in the United States, has been codified or adopted by the state legislatures or their courts in the form of the Restatement (Third) of Agency (2006), a project of the American Law Institute (ALI). • The Restatement (Third) was adopted by the ALI in 2006, replacing the Restatement (Second), which had been the chief source of agency law since its adoption in 1958.
Can an agency relationship be created orally?
• Often, parties create an agency by a written contract. But an agency contract may be oral unless state law provides otherwise. Some states, for example, require written evidence of contracts to pay an agent a commission for the sale of real estate. More important, the agency relation need not be contractual at all. Thus, consideration required to form a contract is not necessary to form an agency.
looting
• Transfers of corporate assets to shareholders for less than fair market value • Looting may occur also when one corporation (called the parent corporation) owns at least a majority of the shares of another corporation (called the subsidiary corporation). Ordinarily, the parent is liable for its own obligations and the subsidiary is liable for its own obligations, but the parent is not liable for its subsidiary's debts and the subsidiary is not liable for the parent's debts. Nonetheless, because a parent corporation is able to elect the directors of its subsidiary and therefore can control the management of the subsidiary, the parent may cause its subsidiary to transact with the parent in a manner that benefits the parent but harms the subsidiary. • For example, a parent corporation may direct its subsidiary to sell its assets to the parent for less than fair value. Because the subsidiary has given more assets to the parent than it has received from the parent, creditors of the subsidiary have been defrauded. Consequently, a court will pierce the veil between the parent and its subsidiary and hold the parent liable to the creditors of the subsidiary. • To prevent the piercing of veils between them, affiliated corporations must not commingle their assets. Each corporation must have its own books of accounts. Transactions between affiliated corporations must be recorded on the books of both corporations, and such transactions must be executed at fair value.
What is respondeat superior?
• Under this doctrine, a principal who is an employer is liable for torts committed by agents (1) who are employees and (2) who commit the tort while acting within the scope of their employment. Respondeat superior makes the principal liable both for an employee's negligence and for her intentional torts. • Respondeat superior is a rule of imputed or vicarious liability because it bases an employer's liability on her relationship with the employee rather than her own fault. This imputation of liability reflects the following beliefs: (1) that the economic burdens of employee torts can best be borne by employers; (2) that employers often can protect themselves against such burdens by self-insuring or purchasing insurance; and (3) that the resulting costs frequently can be passed on to consumers, thus "socializing" the economic risk posed by employee torts.
Can direct liability and respondeat superior liability arise at the same time?
• Yes, principal might incur both direct liability and respondeat superior liability in cases where due to the principal's fault, an employee commits a tort within the scope of her employment.
What are subagents?
• a person appointed by an agent to perform tasks that the agent has undertaken to perform for his principal (Agent of an agent) • For example, if you retain accounting firm PricewaterhouseCoopers as your agent, the accountant actually handling your affairs is PWC's agent and your subagent. • When an agent appoints a true subagent, the agent becomes a principal with respect to the subagent, his agent. • But a subagent is also the original principal's agent.
What is express authority?
• actual authority that the principal has specified in very specific or detailed language
What is the effect if an agent contracts for a legally existing and competent principal while lacking authority to do so?
• agent also may be liable to a third party if he contracts for a legally existing and competent principal while lacking authority to do so. • Here, the principal is not bound on the contract. Yet it is arguably unfair to leave the third party without any recovery. Thus, an agent normally is bound on the theory that he made an implied warranty of his authority to contract. This liability exists regardless of whether the agent is otherwise bound to the third party.
Conflict of interests between principle and agent.
• an agent may not acquire a material benefit from a third party in connection with an agency transaction • agent may not deal with himself • Unless the principal agrees otherwise, an agent also may not compete with the principal regarding the agency business and not assist the principal's competitors so long as he remains an agent. • Finally, an agent who is authorized to make a certain transaction may not act on behalf of the other party to the transaction unless the principal knowingly consents. Thus, one ordinarily may not act as agent for both parties to a transaction without first disclosing the double role to, and obtaining the consent of, both principals
What is apparent authority? How does it arise (what is it based on)?
• arises when the principal's manifestations cause a third party to form a reasonable belief that the agent is authorized to act in a certain way • Apparent authority is based on: • (1) manifestations by the principal to the third party • (2) that cause the third party to believe reasonably that the agent has such authority. • 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.
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 or managers who will operate the business. • Members have limited liability for the obligations of the LLC. • All states except California permit professionals to organize as LLCs. • Professionals in a professional LLC have unlimited liability, however, for their own malpractice. Taxing: Like an LLP or LLLP, members of an LLC may elect to have the LLC taxed like a partnership or a corporation. The death, retirement, or bankruptcy of any member usually does not dissolve or cause the liquidation of the LLC. LLC has no limit on the number or type of owners, as does an S corporation.
What is imputed notification?
• principal's rights and liabilities are what they would have been if the principal had known what the agent knew • Generally, an agent's knowledge of facts or reason to know facts is imputed to a principal when it is material to the agent's duties to the principal. No imputation occurs, however, if the agent acts adversely to the principal with an intent to act solely for the agent's own purposes or those of another person.
Tredwell Case
• the court found that an agent acted for an unidentified principal when he disclosed he was transacting for a corporation, but gave the wrong corporate name to the third party with whom he transacted. • Case info • Derr had hired subcontractors to do the work on the Treadwells' property. • Treadwells visited the site and found that Derr had abandoned the job with the house unfinished because the company was not making any money on the job. The Treadwells had paid Derr approximately $91,000 before construction halted. • The trial court awarded the Treadwells damages against J.D. Construction Co. and JCDER but found that Derr was not personally liable for the damages. The Treadwells appealed to the Supreme Judicial Court of Maine, asking that Derr also be held liable. • Supreme Court • The Treadwells argue that the trial court should have awarded damages against Derr individually since he signed the contract for a non-existent corporation. • In the alternative, they contend that the trial court should have pierced the corporate veil and held Derr responsible because he failed to disclose the existence of JCDER, Inc. • Derr's use of an assumed trade name was not sufficient to disclose his agency relationship with JCDER, Inc. JCDER, Inc., was therefore an unidentified or partially disclosed principal. • *As a matter of law, Derr is personally liable for performance of contracts entered into as agent for the non-existent J.D. Construction, Co., Inc., or the undisclosed principal JCDER, Inc.* • Judgment reversed in favor of the Treadwells.
What is an agency relationship?
• two-party relationship in which one party (the agent) has the power to act on behalf of, and under the control of, the other party (the principal). Examples include a Toyota dealership hiring a salesman to sell cars, Google employing a software engineer to write computer code, and you engaging a real estate agent to sell your home. • Agency is a fiduciary relationship because the principal entrusts the agent with power to make contracts for the principal and to possess and use the principal's property. As a fiduciary, the agent must use the entrusted power and property in the best interest of the principal.
