Business Law Exam 3 Study Guide

Business Organization Liability

A business organization in which some of the partners are not liable for partnership debts is called a no liability partnership.

Americans with Disabilities Act

A civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.

Pre-Employment Drug Testing

A company likely has the right to test prospective employees for drug use in a pre-employment screening.

Drug-Free Workplace Act

A company with more than $25,000 worth of business with the federal government must state what action will be taken against employees who violate the company's drug-free policy.

Corporation Ownership Separation

A corporation separates ownership from responsibility.

Norris-La Guardia Act

A federal law that restricts the ability of courts to issue injunctions against nonviolent labor disputes.

Taft-Hartley Act

A federal law that restricts the activities and power of labor unions.

Wagner Act

A foundational labor law that protects the rights of workers to organize and collectively bargain.

Civil Rights Act of 1964

A landmark piece of legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin.

Universal Agent

A person authorized to execute all regular transactions connected with a business.

Gratuitous Agent

A person who volunteers with no expectation of being paid for her services.

Liability in Sole Proprietorships and Partnerships

A potential drawback of sole proprietorships and partnerships is that the parties involved have unlimited liability.

Express Ratification

A principal's clear signal to be bound to the otherwise unauthorized agreement.

Shareholder Relation to Creditors

A shareholder's relation to creditors of the corporation is generally that the shareholder has no relation to creditors.

National Union Relations Board

A term that does not refer to an existing agency in labor relations.

National Worker Relations Board

A term that does not refer to an existing agency in labor relations.

National Workplace Relations Board

A term that does not refer to an existing agency in labor relations.

Hazard communication standard

A written hazard communication program must include a list of hazardous chemicals, handling of safety data sheets, chemical labels, and worker training.

Agent's Duty of Obedience

Agents have a duty of obedience to their principals, which means that if the agent ignores the principal's instructions, she violates her duty.

Noncompete Agreements

Agreements where an employer has employees sign not to compete with the employer in the future.

Employment-at-will

Allows employees to quit their jobs for any reason at any time and allows employers to discharge employees for any reason at any time subject to contract obligations.

Pregnancy Discrimination Act

An act that prohibits discrimination based on pregnancy, childbirth, or related medical conditions.

Ending an Agency

An agency can be ended upon reasonable notice by either the agent or the principal.

National Employee Relations Board

An agency that was considered to monitor employee relations, but is not the primary agency like the NLRB.

Agent's Authority

An agent may not legally bind a principal to contracts without the principal agreeing to each contract.

Anti-raiding covenant

An agreement in which employees agree not to leave and go into competition against the employer or go to work for a competitor for a certain time.

Disclaimer in Handbook

An attempt by businesses to protect themselves from being found to create an implied contract.

Negligent Hiring Liability

An employer could be liable for acts of an employee based on negligent hiring.

Hazard Communication Standard

An employer with toxic and explosive chemicals must have an ambulance available within five minutes.

Independent Contractor Definition

An independent contractor is not an agent and an employee of the person who hired her.

Family and Medical Leave Act (FMLA)

Applies to private employers of 50 or more persons and government units.

Yellow-dog contracts

Contracts in which employees agree not to join a union as a condition of employment, made unlawful by the Norris-La Guardia Act.

Agency Coupled with an Interest

Created by an agent who has paid for the right to exercise authority with regard to a business.

National Labor Relations Board

Created to monitor unfair labor practices and assure that union representation elections are fair.

Categories of benefits of workers' compensation

Death, total disability, permanent partial disability, temporary partial disability, and medical expenses.

Scope of Authority

Determined by statements of the principal.

Directors Responsibility

Directors of a corporation are responsible for making basic corporate policy.

Family and Medical Leave Act

Employees may take leave to care for a spouse under this act.

Employment-at-Will

Employers can fire workers only for job performance reasons, but employees can quit for any reason.

Drug testing actions

Employers can screen job applicants for drug use before hiring and routinely test employees on an annual basis as part of a physical examination.

Employee Handbooks

Employers may wish to state that employee handbooks are not binding contracts.

Agency through Operation of Law

Established when an emergency exists and the 'agent's' actions are in the public interest.

NLRB remedies

Examples include posting a notice of unfair practices, issuing a cease and desist order, providing back pay, reinstating dismissed workers, and issuing an order to bargain with the union.

Legal Hiring Documents

For any person to be hired legally in the U.S., they must present documents to show their identity.

General Partners Liability

General partners in a limited partnership are personally liable to the partnership's creditors.

Federal labor code

Generally referred to as the National Labor Relations Act.

Workers' compensation law

Gives an employer immunity from employee tort suits arising from on-the-job accidents.

Agency by Operation of Law

If a hurricane is coming and you spend $800 to buy supplies to protect your neighbor's house against storm damage, when they are gone and cannot be reached, you may have created an agency by operation of law.

NLRB Unfair Labor Practice

If the NLRB finds an unfair labor practice, it can order back pay or rehiring if the worker was dismissed.

Piercing the Corporate Veil

If the court 'pierces the corporate veil' it may hold the shareholder(s) personally liable for corporate debts.

Agency Relationship Continuation

If the subject matter of an agency agreement is destroyed, the agency relationship continues until new subject matter is found.

Vicarious Liability

In Armstrong v. Food Lion, where employees at a grocery store beat two customers, the court held the store liable under the rule of vicarious liability.

K.C. Roofing Center Case

In K.C. Roofing Center v. On Top Roofing, the courts held that the owners of a corporation were not liable for the debts of the business entity.

Zhou v. Bickley Case

In Zhou v. Bickley, Zhou helped Bickley start a motorcycle repair shop. When they got into a dispute later, the courts held that Zhou and Bickley were partners, so each was owed the fair market value of his share in the organization.

Partnership

In a partnership, partners are presumed to place their individual interests above those of the partnership.

Sole Proprietorship

In a sole proprietorship, legally the owner is the business and the business is the owner.

Limited Partners Liability Loss

In general, limited partners lose their limited liability status by participating in managerial decisions in the partnership.

Workers' Compensation

In workers' compensation cases, the employer is shielded from tort liability.

Limited Partnership Liability

Like a general partnership, all partners in a limited partnership have unlimited personal liability for the debts of the business venture.

Limited Liability Companies

Limited liability companies are taxed like partnerships, but have the liability rules of a corporation.

Perpetual Life of Companies

Limited liability companies, like corporations, are presumed to have perpetual life.

Limited Partners Management

Limited partners may not participate in the management of the limited partnership or they lose certain legal protections.

Wagner Act, Taft-Hartley Act, Landrum-Griffin Act

Make up the National Labor Relations Act.

NLRA coverage exclusions

Managers, independent contractors, and government workers are not covered by the NLRA.

Principal's Duty to Compensate

Means that the principal must pay the agent for the reasonable value of the services provided.

NLRA

National Labor Relations Act, which does not cover managers, independent contractors, and government workers.

Termination by Operation of Law

Occurs when the house burns down, terminating Adam and Tushar's agency.

Control in Independent Contractor Relationships

One factor that courts may consider when trying to decide if an independent contract or employee relationship exists is whether or not the contractor has the right to direct or control the work of the employer.

OSHA penalties

Penalties may be imposed for willful or repeated violations, serious violations, non-serious violations, and failure to correct a violation.

Remedies the NLRB may impose

Posting a notice of unfair practices, issuing a cease and desist order, providing back pay for lost wages, reinstating dismissed workers, and issuing an order to bargain with the union.

Principal's Obligation

Principals have an obligation to reimburse their agents for their normal business expenses related to the agency, unless otherwise agreed.

Title VII

Provides equal employment opportunity protection for people who are members of 'protected classes.'

Public-policy exceptions

Recognized limits to the employment-at-will doctrine allowing termination of employees for refusing to commit an illegal act, performing a public duty, or exercising freedom of speech rights.

National Labor Relations Act

Requires employers and unions to deal in good faith in collective bargaining.

Shareholder Voting

Shareholders may not authorize third parties to vote on their behalf at shareholder meetings.

General Agent

Someone designated to do all acts that can be legally granted to an agent.

Guz v. Bechtel National

The California high court held that Guz had a suit for both breach of implied contract and of implied covenant.

Negligent Hiring

The Pizza Parlor could be held liable for negligent hiring if Karen causes an accident while on the job.

Agency Relationship

The agent becomes a representative of the principal.

Southern Equipment Co. Case

The appeals court held that Southern Equipment was not liable because they engaged Royalty Builders to do the work.

Articles of Incorporation

The articles of incorporation set the rules that regulate the internal structure of a corporation.

Articles of Incorporation Contents

The articles of incorporation usually include all of the following except the name of the CEO.

Termination of Limited Partnership

The bankruptcy of a limited partner does not force termination.

Corporate Bylaws

The corporate bylaws are the rules that regulate the internal structure of a corporation.

Franchise Document

The document that sets forth the rights and obligations of the franchisor and franchisee is known as the franchise contract.

Franchise Types

The franchisee follows the business model set out by the parent company in business format franchising.

Governing Committee of a Corporation

The governing committee of a corporation is the board of directors.

I-9 form

The most common way for employers to verify a prospective employee's legal right to work in the United States.

Neighbor's Action

The neighbor's action to carry out valuables before the house burns is a trespass, which is illegal.

Owners of a Corporation

The owners of a corporation are called shareholders.

Principal's Liability

The principal is possibly liable for the torts of the agent if the agent's tort was authorized by the principal.

Respondeat Superior

The rule of law that imposes liability on an employer for a tort committed by an employee.

Winding Up Partnership Affairs

The winding up of partnership affairs completes any unfinished business and distributing the partnership's assets.

Agency Relationship Representation

Through an agency relationship, the agent becomes a representative of the principal.

Objective of workers' compensation law

To reduce payment of fees to lawyers and expert witnesses.

Partnership Formation

Under traditional common law rules, a partnership could only be formed with the consent of the state.

Limited Liability Company Perpetual Life

Unlike a corporation, a limited liability company is not allowed perpetual life.

Piercing the Corporate Veil Definition

When a court holds shareholders personally liable for corporate debts it is said to be 'piercing the corporate veil.'

Whistle-blowing

When an employee reports an employer's illegal act.

FMLA coverage exclusions

Workers not covered include those among the 50 percent highest paid, those employed for less than 12 months, and those who worked fewer than 1,250 hours in the past year.