Business Law: Agency, Employment, and Employment Discrimination Review

Flashcards covering core vocabulary, statutory concepts, and common-law principles of agency authority, employment regulations, workers' rights, and Title VII discrimination law.

Independent contractor

A hired party who controls their own work, sets their own hours, brings their own crew, cannot make contracts as an agent, and whose principal lacks the right to control how the job is done.

General agent

An agent authorized to conduct and handle all affairs connected with a particular type of business, in contrast to a special agent who handles a single transaction or a universal agent authorized for all lawfully delegable matters.

Apparent authority

Authority arising when a principal's words or conduct lead a third party to reasonably believe an agent possesses authority, and the third party relies on that belief; it never arises from an agent's own statements.

Ratification

A principal's approval of an unauthorized act through words or conduct without requiring a signed writing, provided the principal has full knowledge of material facts, had capacity to authorize the act, and the agent purported to act on their behalf.

Secret limitations

Private instructions given to an agent that do not bind third parties who lack knowledge of them, allowing third parties to take the agent's apparent authority at face value.

Duty of loyalty

An agent's fiduciary obligation that strictly prohibits obtaining any secret benefit, rebate, or secret payment from third parties in exchange for directing the principal's business.

Termination by operation of law (Death of principal)

The automatic ending of an agency relationship upon the death of the principal without requiring notice, rendering subsequent contracts non-binding on the principal's estate unless an exception such as a durable power of attorney applies.

Notice of termination

The notification a principal is legally required to give to third parties upon discharging an agent; failing to provide notice allows the former agent to retain apparent authority to bind the principal.

Uniform Durable Power of Attorney Act (UDPAA)

A statutory framework establishing that a durable power of attorney is not affected by the principal's subsequent disability or incapacity, allowing agency powers to survive or activate upon incapacity.

Disclosed principal

A principal whose identity is known to the third party; an authorized agent signing in a representative capacity (such as 'Principal, by Agent') is not a party to the contract and has no personal liability.

Partially disclosed principal

An agency relationship where the third party knows the agent is acting for a principal but does not know the principal's specific identity, making both the principal and the agent parties to the contract and legally liable.

Payment to an authorized agent

A legal rule establishing that payment made by a debtor to a creditor's authorized collection agent is deemed made to the principal and discharges the debt, even if the agent misappropriates the funds.

Respondeat superior

A doctrine imposing vicarious liability on an employer for an employee's negligent torts committed in the course of employment; the injured party may sue both the agent and employer but can only recover the judgment once.

Negligent hiring

A theory of direct liability holding an employer responsible for its own fault when it hires an applicant knowing or having reason to know they posed an undue risk of harm to customers without checking references.

Dangerous activities exception

An exception to the rule of owner immunity for independent contractors, holding property owners directly liable for harm caused when hiring contractors to carry out inherently hazardous work, such as blasting.

Soliciting agent

An agent authorized solely to solicit orders and submit customer offers to the principal to accept or reject, lacking the legal power of a contracting agent to finalize a binding agreement.

Imputed knowledge

The legal principle under which a principal is automatically bound by information or notice acquired by an agent while acting within the scope of actual or apparent authority, even if the agent never relays it.

Sarbanes-Oxley whistleblower procedure

The statutory requirement mandating that an employee of a publicly traded company demoted or discharged for reporting securities fraud must file a timely complaint with OSHA (Occupational Safety and Health Administration).

Dodd-Frank Act whistleblower protections

Federal reforms that expanded whistleblower protection across financial-services employees, allowed whistleblowers to sue immediately in federal district court, lengthened the statute of limitations, and broadened monetary remedies.

Shop right

An employer's nonexclusive right to use an invention developed by an employee who used company facilities, labs, and time, while ownership of the underlying invention remains with the employee in the absence of an agreement.

Federal wage and hour overtime calculation

The FLSA rule requiring covered hourly employees to receive regular pay for the first $40$ hours and $1.5$ times their regular hourly rate for all additional hours worked in a single workweek.

National Labor Relations Act (NLRA) solicitation rule

The legal standard permitting employers to prohibit union solicitation during working time, while making it an unfair labor practice to ban solicitation during nonworking periods such as lunch breaks.

Secondary picketing

A generally illegal union practice where a labor organization involved in a dispute with one employer pickets a neutral third party, such as a supplier or customer, with which the union has no dispute.

Workers' compensation benefits

A no-fault statutory recovery system providing immediate medical benefits, prompt periodic wage replacement, and a limited death benefit, but excluding punitive damages for employer negligence.

Defined benefit plan

A retirement plan that guarantees a predetermined, specific future payment amount (such as a fixed monthly benefit for life) to each retiree, irrespective of the investment performance or contributions made.

Experience rating

A method used to assess unemployment insurance taxes under which employers with fewer historical unemployment claims pay lower tax rates and employers with more claims pay higher rates.

Federal Wiretapping Act (employee monitoring limitation)

A statutory limitation permitting employers to monitor employee communications in the ordinary course of business or with consent, but strictly prohibiting supervisors from continuing to listen once a call is identified as personal.

Disparate impact

Unintentional discrimination under Title VII where a facially neutral employment practice disproportionately excludes a protected group, requiring the employer to prove the practice is a job-related business necessity.

Disparate treatment

Intentional employment discrimination under Title VII in which proof of an employer's discriminatory motive or intent is an essential element of the plaintiff's claim.

Bona fide occupational qualification (BFOQ)

A Title VII defense permitting intentional discrimination based on religion, sex, or national origin when reasonably necessary to the normal operation of a business; it can never be applied to race or color.

Tangible employment action

A significant change in employment status such as hiring, firing, demotion, or reassignment that imposes automatic vicarious liability on the employer for supervisor harassment without the possibility of an affirmative defense.

Affirmative defense (Hostile work environment)

An employer defense against harassment claims involving no tangible employment action, proven by showing the employer used reasonable care to prevent and correct harassment and the employee unreasonably failed to use complaint procedures.

Co-worker harassment liability

The Title VII standard providing that an employer is liable for workplace harassment committed by a non-supervisor co-worker only if management knew or should have known of the misconduct and failed to take prompt remedial action.

Supervisor (Vance v. Ball State University standard)

An individual empowered by the employer to effect tangible employment actions against a victim, including hiring, firing, failing to promote, demoting, or reassigning with significantly different responsibilities.

Americans with Disabilities Act (ADA) drug exclusion

A statutory exclusion under the ADA explicitly removing individuals currently engaging in the illegal use of drugs from protected status as qualified individuals with disabilities.

Retaliation under Title VII

An unlawful employment practice under Title VII prohibiting employers from discriminating or taking adverse action against employees because they opposed unlawful practices or participated/testified in an EEOC proceeding.

Extraterritorial application of Title VII (Civil Rights Act of 1991)

A statutory provision extending Title VII and ADA protections to U.S. citizens working abroad for American-owned or American-controlled companies, unless foreign compliance would violate the laws of the host country.