Legal Environment of Business: EMPLOYMENT, IMMIGRATION & LABOR LAW

Agency Relationship

Fiduciary relationship in which one party (agent) acts on behalf of another (principal) with authority and a duty of loyalty.

Fiduciary Duty (Agency)

Legal obligation of agents to act loyally, honestly, and in the principal’s best interests.

Employer–Employee Relationship

Relationship where the employer exercises control over the employee’s work performance, establishing agency.

Employer–Independent Contractor Relationship

Relationship in which the hiring party lacks control over the manner and means of the contractor’s work, generally removing agency liability.

Control Test

Judicial analysis considering supervision, tools, skill level, payment method, and duration to classify workers as employees or independent contractors.

Agent’s Duty of Performance

Obligation to perform agency tasks with reasonable care, skill, and diligence.

Agent’s Duty of Notification

Duty to inform the principal of all matters relevant to the agency, imputing knowledge to the principal.

Agent’s Duty of Loyalty

Obligation to avoid conflicts of interest and refrain from competing with the principal.

Agent’s Duty of Obedience

Duty to follow lawful, reasonable instructions of the principal.

Agent’s Duty of Accounting

Duty to maintain records and refrain from commingling personal and principal funds.

Principal’s Duty of Compensation

Duty to pay the agent for services rendered.

Principal’s Duty of Reimbursement and Indemnification

Obligation to reimburse expenses and defend agents for authorized acts.

Principal’s Duty of Cooperation

Requirement to assist in the agent’s performance of duties.

Respondeat Superior

Doctrine holding employers vicariously liable for employees’ torts committed within the course and scope of employment.

Course and Scope of Employment

Actions performed in furtherance of employer business for which employers are liable under respondeat superior.

Detour vs Frolic

Minor deviation (detour) keeps employer liable; major deviation (frolic) removes liability.

Intentional Torts (Employer Liability)

Employer liability for intentional torts when committed within scope of employment or when the employer knew of employee’s propensity.

Independent Contractor Tort Liability

Employers generally not liable for contractor torts because they lack control, subject to exceptions for hazardous activities.

Hazardous Activity Exception

Strict liability imposed on employers for inherently dangerous work performed by contractors.

Employment Law (OSHA)

Federal statute ensuring workplace health and safety through standards, inspections, and penalties.

Workers’ Compensation

State insurance system providing benefits for job-related injuries regardless of employer fault.

Social Security (FICA)

Federal program funded by payroll taxes providing retirement, disability, and survivor benefits.

Medicare

Federal health insurance program for individuals aged 65+ or disabled, funded through payroll taxes.

COBRA

Federal law granting terminated employees the right to continue group health coverage at personal expense for up to 18 months.

Immigration Reform and Control Act (IRCA)

Law prohibiting employment of unauthorized workers and requiring I-9 employment verification.

I-9 Verification

Employer obligation to verify employee identity and work eligibility.

ICE Enforcement

Federal enforcement of immigration employment regulations through audits and sanctions.

National Labor Relations Act (NLRA)

Federal statute protecting employees’ rights to unionize, engage in collective bargaining, and participate in protected concerted activities.

Collective Bargaining

Negotiation process between employer and union regarding wages, hours, and working conditions.

Good Faith Bargaining Requirement

Duty for employers and unions to meet and negotiate honestly, though not required to reach agreement.

Economic Strike

Work stoppage for economic reasons where employers may permanently replace employees.

Unfair Labor Practice Strike

Strike protesting employer ULPs where workers cannot be permanently replaced.

Right to Strike

Statutory right enabling employees to cease work, subject to restrictions for public safety and essential services.

Lockout

Employer-initiated work stoppage to prevent employees from working during labor disputes.