Legal and Employment Law: Agency, Duties, and FMLA Basics

Agency

A relationship where one person (the agent) is authorized to act on behalf of another person (the principal).

The two essential characteristics of any agency relationship

1. Mutual consent; 2. Agreement/delegation of the power to act.

‘Agency by Ratification'

When a person acts as an agent without actual authority, but the principal later accepts or 'ratifies' the unauthorized act.

'Respondeat Superior' in a legal context

A form of vicarious liability where the principal/employer is liable for the torts of an agent/employee committed within the scope of their authority.

The four primary duties a Principal owes to an Agent

1. Duty to Compensate; 2. Duty to Reimburse; 3. Duty to Indemnify; 4. Duty to Cooperate.

The Agent's 'Duty of Loyalty' prohibitions

Self-dealing, usurping opportunities, competing with the principal, and misuse of the principal's information.

'Fully Disclosed' Agency (meaning the third party knows the agent is acting for a principal and knows that principal's identity)

An agent not liable for a contract they executed

The 'Just Cause' concept in employment

Found in collective bargaining agreements for unionized employees that limits an employer's power to terminate.

Exclusive Remedy

The worker cannot sue their employer in tort for job-related injuries; they must recover through the Workers' Comp system

General Partnership

A voluntary association of two or more 'persons' (individuals or entities) carrying on a business as co-owners for a profit.

When a Limited Partner exercises 'too much' management authority

May lose limited liability status and be deemed a general partner.

Current federal minimum wage under the FLSA

$7.25 per hour

How many weeks of unpaid leave does the FMLA guarantees?

Up to 12 weeks during any 12-month period for qualifying reasons (e.g., birth of a child, serious health condition).

The two requirements for an employee to qualify for FMLA

1. Must have worked for the employer for at least 1 year; 2. Must have worked at least 1,250 hours during the previous 12 months.

Express Agency

An agency relationship formed by an explicit agreement between parties that sets specific limits on the agent's power, such as a power of attorney.

Implied Agency

An agency relationship inferred from the conduct of the parties rather than an explicit agreement; limits are based on facts and circumstances.

Apparent Agency

When a principal creates the appearance that an agency exists when one does not actually exist.

The four primary duties an agent owes to a principal

1. Duty to Perform (care/skill); 2. Duty to Notify; 3. Duty to Account (no commingling); 4. Duty of Loyalty (no self-dealing).

Tort Liability

The principal is vicariously liable for the tortious acts of an agent if the act is committed within the scope of their authority.

Partially Disclosed contract

The agent is liable because the third party knows there is a principal but does not know that principal's identity

Undisclosed contract

The agent is liable because the third party is unaware that the agent is acting for a principal at all.

Contract Employee

An employee who has an individual contract defining the specific terms and conditions of their employment.

“At Will” Employee

An employee without a union or contract who can be terminated for any reason (or no reason), provided it isn't for a discriminatory/protected class reason.

The FLSA Child Labor rules for those under 14

They cannot work except for newspaper routes, family-owned non-hazardous businesses, babysitting, or making evergreen wreaths

The Overtime Pay requirements

1.5 times regular pay for hours worked over 40 per week, unless the employee is exempt.

List 3 types of exempt employees under FLSA.

1. Executives/Managers; 2. Learned Professionals; 3. Outside Sales Reps.

Who is entitled to Unemployment Compensation?

Employees who are laid off or terminated; those who voluntarily quit or are fired for sufficient cause are generally not entitled to it.

Benefits provided by Social Security

Retirement, Survivors', Disability, and Medical (Medicare) benefits.

How is an Independent Contractor distinguished from an employee?

By the degree of control; a contractor is not controlled by the principal regarding their physical conduct in performing the work.

Is a principal liable for a contractor's torts?

The principal is generally not liable for the torts of an independent contractor.

Unlimited Personal Liability

Every partner is personally responsible for the debts and obligations of the business. If the business gets sued or goes bankrupt, creditors can come after your personal car, house, and bank account.

Joint and Several Liability (Torts)

If one partner commits a "tort" (like a car accident while on a delivery), the victim can sue any of the partners for the full amount of the damages. You could end up paying for your partner's mistake.

Joint Liability (Contracts)

For business contracts (like an unpaid bill), the plaintiff usually has to sue all partners together.