TAMU MGMT 311 Hailey Exam 4

Sole Proprietorship

-the simplest form of business where the owner is the business

-the owner reports income on his/her personal income tax return and is legally responsible for all debts and obligations incurred by the business

Partnership

-an agreement by 2 or more parties to carry on, as co-owners, a business for profit

-does not have to be written

-unlimited liability

-each partner has a direct and equal voice, each partner pays pro rata share of income taxes

Corporation

-a legal entity formed in compliance with statutory requirements

-the entity is distinct from its shareholders-owners

-limited liability of shareholders

-shareholders elect directors who set policy and appoint officers

-there is double taxation

Limited Partnership

-a partnership consisting of one or more general partners (who manage the business and are liable to the full extent of their personal assets for debts of the partnership) and one or more limited partners (who contributes only assets and are liable only to the extent of their contributions)

-unlimited liability to general partners

-limited partners can't have a voice

-taxed as a partnership

Limited Liability Company (LLC)

-a hybrid form of business enterprise that offers the limited lability of the corporation but the tax advantages of a partnership

-created by an agreement of member-owners of the company

-member-owners' liability is limited to the amount of capital contributions

-member-owners can fully participate in management

-is not taxed

-members are taxed on profits

Limited Liability Partnership (LLP)

-a form of partnership that allows professionals to enjoy the tax benefits of a partnership while limiting their personal liability for the malpractice of other partners

-created by agreement

-any partner liability we are not responsible for in most states

-management and taxation is the same as general partnership

Agent

a person who agrees to represent or act on behalf of another

Principal

the person whom the agent represents or acts on behalf of

Fiduciary

a person having a special duty created by agreeing to act for the benefit of another

Fiduciary Relationship

one that involves trust and confidence

Determining Employee Status

1. How much control can employer exercise over details of the work? (more control=more likely employee)

2. Is worker engaged in occupation/business distinct from that of employer?

3. is work usually done under employer's direction or by specialist without supervision?

4. does employer supply tools at place of work?

5. for how long is person employed?

6. what is method of payment? (by time period=employee, by job=contractor)

7. what degree of skill is required of worker?

IRS Criteria

has 20 factors to make sure taxes are paid correctly

Works for Hire

usually means the employer owns the copyrighted work

Agency by Agreement

may be an expressed or implied agreement

Expressed Agreement

-oral words or written words

-ex. a mom gives her daughter her credit card to buy groceries

Implied Agreement

-like an implied contract

-ex. a mom gives her daughter her credit card to keep, it is implied she can use it

Agency by Ratification

-principal accepts actions of another

-instead of giving the credit card, your daughter steals it and uses it

Agency by Estoppel

-principal is forced by law to accept the actions of another because principal gave the reason to believe an agency relationship existed

-the principal's action creates the appearance of an agency that does not actually exist

-a third person reasonably believed that the agency existed

Agency by Operation of Law

an agent is needed due to an emergency

Express Authority

1. can be wither oral or written

2. authority is clear, direct and in definite terms

3. equal dignity rule - in most states IF: the contract being executed is or must be in writing, then the agent's authority must be in writing, too (ex. real estate contract)

Exceptions to Equal Dignity Rule

1. executive officer in a corporation when acting for the corporation in an ordinary business situation

2. when the agent acts in the principal's presence

3. when agent's act of signing is merely superficial

Power of Attorney

special or general - gives an agent express authority (is the best evidence of written express authority)

Implied Authority

is reasonably necessary to carry out express authority; and can be confirmed by custom or inferred from the agent's position

Pattern of Conduct

court's hold the Principal liable based on their actions --- pattern of conduct over time --- not based on an agreement

Apparent Authority and Estoppel

the Principal is usually denying the agency relationship but the court holds the principal liable using the estoppel doctrine

Emergency Powers

-unforeseen emergency demands action by an agent to protect rights and/or property of the principal

-agent is unable to communicate with principal

-agent has emergency power

Ratification

principal accepts responsibility for agent's unauthorized actions

Disclosed Principal

principal's identity is known by the 3rd party at the time the contract is entered into with the agent

Partially Disclosed Principal

the principal's identity is not known by the 3rd party, but the 3rd party knows that the agent is or may be acting for a principal at the time of the contract

Undisclosed Principal

principal's identity is totally unknown by the 3rd party, and the 3rd party has no knowledge that the agent is acting on the principal's behalf at the time of the contract

Authorized Acts

1. principal is obligated to perform the contract

2. agent's liability depends:

a. disclosed principal- agent has no contractual liability for principal's nonperformance

b. partially disclosed principal- agent is treated as a party to the contract

c. undisclosed principal- agent is liable but is entitled to indemnification from principal

Unauthorized Acts

principal is not liable, but agent is UNLESS the principal ratifies the act

Doctrine of Respondeat Superior

-the employer (principal) is liable for any harm caused to a third party by an employee (agent) committed by the employee (agent) within the course and scope of employment

-means "let the master respond"

2-Part Analysis of Respondeat Superior

1. an employee

2. if the harm is committed within the course and scope of employment

Going and Coming Rule

employee traveling to and from work is NOT acting in course and scope of employment

Special Errand Exception

if employee is on a special errand for employer at time of accident, employer is liable

What if the special errand is within the employee going to and from work?

from the moment they leave the office/home to when they get to the office/home, it is all under the course and scope if they are running a special errand on the way

Detour

a personal errand where the employee is mostly focused on work and is still in the course and scope

Frolic

a personal errand where the employee is not focused on work and is outside the course and scope

Liability for Independent Contractor's Torts General Rule

the person who hires an independent contractor is not liable if a 3rd party is injured by the acts of the independent contractor in performing the contract

Right to Control

the employer does not have the right to control the details of an independent contractor's performance

Inherently Dangerous (or Hazardous) Activities

if you hire an independent contractor to do a dangerous job, you don't escape liability (ex. explosives, toxic chemicals, skyscraper window washers, ect)

Employment at Will

when a person provides services to another for compensation without the duration of the relationship specified

Application to the Employment at Will Doctrine

the employment relationship may be terminated by either party at any time and for any reason, subject to certain exceptions

Exceptions to the Employment at Will Doctrine

1. Implied Contract

2. Implied Covenant of Good Faith

3. Public Policy

Implied Contract

-guarantees of continued employment can create an implied contract

-ex. "workers in our company won't be fired without good cause"

-ex. "you're going to have a job here as long as you do a good job"

Implied Covenant of Good Faith

-some states hold that the employment relationship creates an implied promise to act in good faith

-so, if the employer fires an employee for an arbitrary or unjustified reason, it may be considered bad faith

-ex. an employer fires an employee 3 days before their bonus

Public Policy

applies when the employer fires a worker for reasons that violate a fundamental public policy of the state

What is public policy and where do you find it?

-ideas or policies that are good for society as a whole

-common law, statutes, ect

Firing violates common law rules, including Tort Law

1. employer directs employee to commit a crime

2. fraud (tort) by the employer

Whistleblowing

when an employee tells a government official, upper management, or the press that her employer has engaged in some unsafe or illegal activity

Federal Whistleblower Protection Act of 1989

-applies only to Federal government workers

-most states have whistleblower statutes that protect employees

-many other statutes prevent retaliation (similar to whistleblowing)

Public Employee Whistleblower Act (Texas)

applies to state/county/city government workers

Nursing Home Workers Act (Texas)

must report elderly abuse

Wrongful Discharge

-the employer has fired the employee in violation of the employment contract between the parties; or

-the employer has fired the employee in violation of a statute or common law

Fair Labor Standards Act of 1938 (FLSA)

established child labor laws, minimum wages, and 40 hour work week limit and overtime pay requirements

Child Labor rules

Children under 14- very limited (ex. entertainment, work for parents, paperboy, ect)

Children ages 14 & 15- can work in non-hazardous occupations, there are day and hour limitations

Children ages 16 & 17- there are no more day and hour limitations

Minimum Wages

Federal: $7.25

State: states can choose their own minimum wage (TX does not)

Tipped Workers

direct wages of $2.13/hour plus tips must equal federal minimum wages

Overtime

any employee who agrees to work more than forty hours per week must be paid no less than one and a half times his regular pay for all hours over forty (they are free to do more than law allows)

Overtime Exempt Employees

1. Executives (CEOs, CFOs, etc)

2. Administrative

3. Professional (CPAs, doctors, etc)

4. Outside salesperson

5. Those creating computer code

6. And those making more than $684/week or $35,568/year

(if the worker is exempt, but gets paid < $35,568/year, employer is required to pay overtime)

Family Medical Leave Act of 1993 (FMLA)

1. Employers who have 50 or more employers must provide employees with up to 12 weeks unpaid family or medical leave during any 12-month period (don't need to take all 12 at once, employees can use paid vacation leave and paid sick leave)

2. During the leave, the employer must continue the worker's health-care coverage

3. Employee is guaranteed to return to the same or a comparable (same pay, benefits, seniority, ect) position after leave

Exceptions to FMLA Coverage

1. "Key" employee exception - top 10% of the earners of wages, usually an executive, not guaranteed their same job back

2. Must have worked at least 1 year with the company

3. Must have worked at least 1250 hours in the preceding year

Requirements for Family or Medical Leave

1. to care for newborn within 1 year of birth (both male and female)

2. to care for adopted or foster child within 1 year of placement

3. to care for employee's child, spouse, or parent with a "serious health condition"

4. when an employee has a "serious health condition" making them unable to perform essential functions of their job

5. Exigent circumstances arising out of the fact that spouse, son, daughter, or parent is covered military member on active duty - get up to 26 weeks in 12-month period to care for family member

Occupational Safety & Health Act of 1970

provides for specific standards that an employee must meet in an attempt to ensure safe and healthful working conditions for employees

Occupational Safety & Health Act Agencies

1. Occupational Safety & Health Administration (OSHA)- sets forth standards, makes inspections, ends enforces the Act

2. National Institute for Occupational Safety & Health- conducts research on safety and health problems and recommends standards for OSHA to adopt

3. Occupational Safety & Health Review Commission- an independent agency that handles appeals from actions taken by OSHA

Occupational Safety & Health Act Procedures and Violations

1. OSHA compliance officers may inspect facilities

2. Employee may report OSHA violations

3. Employee cannot be fired for refusing, in good faith, to work in a high-risk area if bodily harm or death might result

4. Employer must report all work-related injuries and diseases to OSHA

5. If an employee is killed in a work-related accident or 3 or more workers are hospitalized in one incident, the employer must notify OSHA within 8 hours or will be fined, and an inspection of the premises is mandatory

State Worker's Compensation Laws

an insurance plan that covers on the job injuries

Requirements for Receiving Worker's Comp

1. must have an employment relationship (don't have to be an employee)

2. worker's injury must have been "accidental"

3. worker's injury must have occurred on the job or in the course of employment

Worker's Comp vs Litigation

1. an employee's acceptance of worker's comp benefits bars the employee from suing for injuries caused by employer's negligence

2. employer cannot raise common law defenses

3. an employee can sue the employer who intentionally injures the worker

HIPAA

is not a discrimination law, but a privacy law

Electronic Monitoring in the Workplace

1. Employee Privacy Protection

a. Tort laws - intrusion (most common); private and public/government employees have these protections; courts balance the employee's reasonable expectation of privacy vs employer's interests

b. Statutory Protections:

The Electronic Communications Privacy Act of 1986- prohibits the intentional interception of any wire or electronic communication or the intentional disclosure or use of information obtained by the interception

Exceptions to the Electronic Communications Privacy Act of 1986

1. Consent

2. Business-extension exception- employer may monitor employee electronic communications in the ordinary course of business

When does an employee have a reasonable expectation of privacy?

When they use their personal devices

Lie Detector Tests-Employee Polygraph Protection Act

Prohibits employers from:

1. requiring or causing employees or job applicants to take lie-detector tests or suggesting that they do so:

2. using, accepting, referring to, or asking about the results of lie detector tests taken by employees or applicants; and

3. taking or threatening negative employment-related action against employees or applicants based on results of or refusal to take lie detector tests

Exceptions to the Employee Polygraph Protection Act

1. government employees

2. security service firms

3. drug companies

4. employers investigating losses, like theft (must have reasonable suspicion)

Drug Testing

a. Government employees- the fourth amendment applies

b. Private employees- the fourth amendment does not apply, however some state statutes allow for it

Protected Classes

1. Race

2. Color

3. Religion

4. Sex/Gender

5. National Origin

Equal Employment Opportunity Commission (EEOC)

plaintiff must exhaust EEOC procedures before courts have subject matter jurisdiction to hear the case

Procedures under Title VII

1. EEOC

2. Employee must file claim with EEOC first

Disparate Treatment

intentional discrimination

Disparate Treatment Prima Facie Case

1. plaintiff is a member of the protected class (everyone is part of a protected class);

2. plaintiff applied and was qualified for the job;

3. plaintiff was rejected by the employer;

4. employer continued to seek applicants for the position or filled the position with a person not in that protected class

Burden of Proof

1. plaintiff must prove the prima facie case

2. burden then shifts to employer to show a legitimate reason for not hiring plaintiff

3. burden shifts back to plaintiff to prove that the employer's reason was a mere pretext

Disparate Impact

-unintentional discrimination

a. Prima Facie case

b. burden of proof shifts to employer who tries to justify the practice or requirement (employer defenses include: job-related reason or a business necessity; but can also be justifications like insubordination, lack of work experience, etc)

c. it is not a defense that the employer did not intend to discriminate

Disparate Impact Prima Facie Case

Plaintiff proves:

1. the employer has a facially neutral employment practice or job requirement;

2. policy is neutrally applied; and

3. policy has a significant adverse impact on a protected class

Example of Disparate Impact

-a plaintiff can win a weight requirement case for a police job

-the requirement should be a physical ability test instead

Discrimination based on Race, Color, and National Origin

1. race is interpreted broadly to apply to the ancestry or ethnic characteristics of a group of persons, such as Native Americans

2. National origin refers to discrimination based on a person's birth in another country or ancestry or culture, such as Hispanic

3. Reverse Discrimination- discrimination against members of a majority group

English Only Policies

-a rule where you can only speak English at work

-this would be discrimination

Discrimination Based on Religion - Disparate Treatment

hiring based on religion for a religious organization

Discrimination Based on Religion - Disparate Impact

-involves policies and practices of employer which the employee claims violate their religious beliefs, practices and observances

a. Accommodation by Employer- the employer must accommodate the employee's religious observances, practices, and beliefs, unless it would be an undue hardship on the employer

b. Accommodations are balanced against an Undue Hardship- employer doesn't have to put an undue hardship on the business

Discrimination based on (Sex) Gender

-there is no legislative history on what Congress meant when it outlaws discrimination on the basis of "sex" which is now routinely called "gender"

1. employers cannot classify jobs as male/female unless gender is a BFOQ

2. height, wight, physical ability requirements can have disparate impact on women

3. but, is it discrimination to have separate physical ability standards for men and women? No

4. employers cannot have separate seniority lists...1 for men and 1 for women

5. Pregnancy Discrimination Act of 1978 amended Title VII, expanding the definition of gender discrimination to include discrimination based on pregnancy, child birth, or related medical conditions (this is not a leave law)

Equal Pay Act of 1963 (amendment to FLSA)

requires equal pay for male and female employees working at the same establishment doing similar work

"Substantially Equal" Test

we look at what they do everyday and if they essentially do the same thing

Four Exceptions to Equal Pay Act

1. a seniority system

2. a merit system

3. a system that measures earnings by quantity/quality of production; or

4. a differential based on any factor other than sex

Constructive Discharge

-employees who leave their jobs voluntarily can claim they were "constructively discharged" if the employer causes the employee's working conditions to be so intolerable that a reasonable person would be compelled to quit

-constructive discharge applies to all forms of discrimination under several statutes, Civil Rights Act, Age and Disability Statutes

-it is most commonly used in sexual harassment cases

Sexual Harassment

1. Quid Pro Quo

2. Hostile Working Environment

3. Retaliation by Employers

4. Employer Liability for Co-Worker Sexual Harassment

5. Employer Liability for Sexual Harassment by Nonemployees

6. Same-Gender Harassment

7. Sexual-Orientation Harassment

Sexual Harassment - Quid Pro Quo

-"this for that"

-tangible employment action results from a refusal to submit to a sexual demand

-employer is strictly liable for QPQ in the workplace without regard to policies

-the courts view QPQ as the employer's absolute responsibility

-employer controls the workplace and the supervisor/manager acts with the authority of the company/employer to cause economic injury to the victim

Sexual Harassment - Hostile Working Environment

-no tangible losses are present, but the victim suffers from an environment at work which is hostile based on sex

-ex. proposition, touching, joking, and inuendo severe enough to make the workplace hostile

-employer can be liable, but has an affirmative defense

Affirmative Defense for Employer in HWE

1. employer took reasonable care to prevent and promptly correct the behavior, and

2. employee unreasonably failed to take advantage of the corrective opportunities

Employer Liability for Co-Worker Sexual Harassment

-employer is liable

-if the plaintiff can prove employer knew or should have known and failed to take prompt reasonable corrective actions