David Parker FINAL

CH14

CH14

Agency Law

fiduciary (trustful) relationship between an agent and a principal. Agency Law uses common law and is broader than employment law.

Independent Contractor

A person who works for and receives payment from an employer, but the employer cannot control their working conditions or methods. An independent contractor CAN be an agent but is NOT an employee.

Employee or IC?

How much employer control? IRS «

Is work distinct from work of employer?

Is it under the employer’s direction?

Does employer supply tools?

How long is person employed?

When does person get paid?

How skilled is the work?

Who owns copyright? (work for hire)

employer owns employee copyright

IC owns their own copyright

Needs for agency relationship

principal doesn’t need capacity, agent does

doesn’t need to be in writing

mutual consent

legal

ways to become an agent:

agreement - express or implied to act on someone behalf

ratification - someone acted for you and you accept after

estoppel - appearance of authority before act which prevents principal from denying the agent had authority

operation of law- relationship created by law without consent when circumstances require someone to act for another to prevent harm or protect interests

duty of principal and agent

each party owes the other the duty to act with the utmost good faith.

duty of agent

Performance

Notification

Loyalty

Obedience

Accounting

duties of the principal

Compensation

Reimbursement and Indemnification

Cooperation

Safe Working Conditions

Express Agent Authority

Express authority is actual authority declared in clear, direct, and definite terms. Express authority can be given orally or in writing.

Equal dignity rule

A rule requiring that an agent’s authority be in writing if the contract to be made on behalf of the principal must be in writing. to prevent someone from using an agent to get around legal requirements

Power of Attorney

Authorization for another to act as one’s agent or attorney either in specified circumstances (special) or in all situations (general). Ends when person giving authority dies or incapacitates.

Implied Agent Authority

Agents have the implied authority to do what is reasonably necessary to carry out their express authority and accomplish the objectives of the agency. Actual authority can also be implied by custom or inferred from the position the agent occupies.

Apparent Agent Authority

A principal’s words or conduct cause a third party to reasonably believe the agent has authority to act, and the third party relies on that belief.

Emergency Agent Powers

an unforeseen emergency demands action by the agent to protect or preserve the principal’s property or rights, but the agent is unable to communicate with the principal. In that situation, the agent has emergency power.

Agent Ratification

Ratification occurs when the principal affirms an agent’s unauthorized act. When ratification occurs, the principal is bound to the agent’s act, and the act is treated as if it had been authorized by the principal from the outset. Ratification can be either express or implied.

Disclosed Principal

A principal whose identity is known to a third party at the time the agent makes a contract with the third party.

principal is bound and can enforce the contract

Agent is NOT liable

Partially Disclosed Principal

A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract.

Principal is bound and agent is ALSO liable

third party can sue either principal or agent

Undisclosed Principal

A principal whose identity is unknown by a third party, and the third party has no knowledge that the agent is acting for a principal at the time the agent and the third party form a contract.

Principal is bound (if agent acted with actual authority)

Agent is Liable

3rd party can enforce contract against either

Regardless of disclosure,

principal is obligated to perform contract IF agent acts within scope of authority

Unauthorized Acts by Agent

If an agent has no authority but nevertheless contracts with a third party, the principal cannot be held liable on the contract. It does not matter whether the principal was disclosed, partially disclosed, or undisclosed.

Torts and Crimes in Principal agent relationship

Obviously, individuals, including agents, are liable for their own torts and crimes.

When is Principal Liable for Agent actions?

When agents act with actual authority, apparent authority, or under ratification.

A principal is liable on contracts made by an agent when the agent had authority, and the contract was in that scope of authority

A principal is liable for an agent’s torts when the agent is an employee (not a contractor), and the tort was committed in the scope of employment.

Also, liable if they direct the agent to commit the act or they knowingly approve the conduct

When is a principal not liable for an agent?

Agents acting outside their authority without ratification.

Agent is an independent contractor

Agent commits intentional torts outside the scope of employment

Document of respondeat superior

A principal (usually an employer) is liable for the torts of an agent (employee) committed within the scope of employment.

“Scope of employment” means

• The act was of the kind the employee was hired to perform

• It occurred substantially during work hours and at the workplace

• It was motivated, at least in part, to serve the employer

Termination of agency by acts of the parties:

Lapse of time: Agency terminates automatically at the end of the stated time.

Purpose Achieved: Agency terminates automatically on the completion of the purpose for which it was formed.

Occurrence of a Specific Event: Agency normally terminates automatically on the event’s occurrence.

Mutual Agreement: Agency terminates when both parties consent to end the agency relationship.

At the Option of One Party: Either party normally has a right to terminate the agency relationship. Wrongful termination can lead to liability for breach of contract.

Wrongful Termination

Although both parties have the power to terminate an agency relationship, they may not always possess the right to do so. Wrongful termination can subject the canceling party to a suit for breach of contract.

Agency Coupled with an interest

An agency coupled with an interest exists when the agent holds a present property or security interest in the subject of the agency, making the agency irrevocable by the principal.

Different because agent has authority to protect their own interest. Principal CANNOT revoke agency at will and the agency does not automatically terminate upon the principal’s death or loss of capacity

Notice of termination

No particular form is required for notice of agency termination to be effective. If the agent’s authority is written, however, it normally must be revoked in writing. The principal can personally notify the agent, or the agent can learn of the termination through some other means.

When an agency is terminated by act of the parties, it is the principal’s duty to inform any third parties who know of the existence of the agency that it has been terminated. If the principal knows that a third party has dealt with the agent, the principal is expected to notify that person directly.

Termination by operation of law:

death or insanity: knowledge of death isnt required. Immediete

impossibility: subject matter is destroyed or lost / new law

changed circumstances: When an event occurs that has such an unusual effect on the subject matter of the agency that the agent can reasonably infer that the principal will not want the agency to continue, the agency terminates.

bankruptcy: If either the principal or the agent petitions for bankruptcy, the agency is usually terminated. In certain circumstances, as when the agent’s financial status is irrelevant to the purpose of the agency, the agency relationship may continue.

War: When the principal’s country and the agent’s country are at war with each other, the agency is terminated. In this situation, the agency is automatically suspended or terminated because there is no way to enforce the legal rights and obligations of the parties.

CH15

CH15

Employment at Will

A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless it would violate a contract or statute.

Exceptions to employment at will

contract theory: an implied employment contract exists between an employer and an employee. An employee who is fired outside the terms of the implied contract may succeed in an action for breach of contract even though no written employment contract exists.

tort theory: In a few situations, the discharge of an employee may give rise to an action for wrongful discharge under tort theories. Abusive discharge procedures may result in a suit for intentional infliction of emotional distress or defamation.

public policy: The most common exception to the employment-at-will doctrine is made on the basis that the worker was fired for reasons that violate a fundamental public policy of the jurisdiction. Generally, the public policy involved must be expressed clearly in the jurisdiction’s statutory law.

i.e. Whistleblowing

Whistleblowing:

An employee’s disclosure to government authorities, upper-level managers, or the media that the employer is engaged in unsafe or illegal activities.

wrongful discharge

An employer’s termination of an employee’s employment in violation of the law or an employment contract.

i.e. what the employee sues for

The Davis-Bacon Act

requires contractors and subcontractors working on federal government (public) construction projects to pay “prevailing wages” to their employees.

Happens because government contracting is given to lowest bidder (sometimes lower than avg wages)

The Walsh-Healey Act

applies to U.S. government contracts. It requires that a minimum wage, as well as overtime pay at 1.5 times regular pay rates, be paid to employees of manufacturers or suppliers entering into contracts with agencies of the federal government.

The Fair Labor Standards Act (FLSA)

extended wage-hour requirements to cover all employers engaged in interstate commerce or in producing goods for interstate commerce. Certain other types of businesses are included as well. The FLSA, as amended, provides the most comprehensive federal regulation of wages and hours today.

Sets minimum wage at $7.25/hr and restricts child labor

The Family and Medical Leave Act (FMLA)

allows employees to take time off from work for family or medical reasons or in certain situations that arise from military service. A majority of the states have similar legislation. The FMLA does not supersede any state or local law that provides more generous protection.

The FMLA requires employers who have fifty or more employees to provide employees with up to twelve weeks of unpaid family or medical leave during any twelve-month period. The FMLA expressly covers private and public (government) employees who have worked for their employers for at least a year.

Reasons for FMLA:

care for newborn less than a year

To care for an adopted or foster child within one year of the time the child is placed with the employee

To care for the employee’s spouse, child, or parent who has a serious health condition

If the employee suffers from a serious health condition and is unable to perform the essential functions of the job

For any qualifying exigency (nonmedical emergency) arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on active duty. For instance, an employee can take leave to arrange for child care or to deal with financial or legal matters when a spouse is being deployed overseas.

Occupational Safety and Health Act

The act imposes on employers a general duty to keep workplaces safe. To this end, OSHA has established specific safety standards for various industries that employers must follow. For instance, OSHA regulations require the use of safety guards on certain mechanical equipment and set maximum levels of exposure to substances in the workplace that may be harmful to workers’ health.

needs notices, records, and reports of everything

workers’ compensation laws

State statutes that establish an administrative process for compensating workers for injuries that arise in the course of their employment, regardless of fault.

Requirements for receiving workers compensation:

1. The existence of an employment relationship.

2. An accidental injury that occurred on the job or in the course of employment, regardless of fault. (An injury that occurs while an employee is commuting to or from work usually is not considered to have occurred on the job or in the course of employment and hence is not covered.)

Social Security

Retired workers are then eligible to receive monthly payments from the Social Security Administration, which administers the Social Security Act. Social Security benefits are fixed by statute but increase automatically with increases in the cost of living. Age 67 until you can claim

Medicare

Medicare is a federal government health insurance program that is administered by the Social Security Administration for people sixty-five years of age and older and for some under the age of sixty-five who are disabled. Medicare originally had two parts, one pertaining to hospital costs and the other to nonhospital medical costs, such as visits to physicians’ offices. It now offers additional coverage options and a prescription drug plan. People who have Medicare hospital insurance can also obtain additional federal medical insurance by paying small monthly premiums, which increase as the cost of medical care increases.

Private retirement plans

The major federal act regulating employee retirement plans is the Employee Retirement Income Security Act (ERISA).

This act empowers a branch of the U.S. Department of Labor to enforce its provisions governing employers that have private pension funds for their employees. ERISA does not require an employer to establish a pension plan. When a plan exists, however, ERISA specifies standards for its management, including establishing rules on how funds must be invested and records kept.

Unemployment Insurance

The Federal Unemployment Tax Act (FUTA) created a state-administered system that provides unemployment compensation to eligible individuals. Under this system, employers pay into a fund, and the proceeds are paid out to qualified unemployed workers. The FUTA and state laws require employers that fall under the provisions of the act to pay unemployment taxes at regular intervals. The proceeds from these taxes are then paid out to qualified unemployed workers.

To be eligible for unemployment compensation, a worker must be willing and able to work. Workers who have been fired for misconduct or who have voluntarily left their jobs are not eligible for benefits. Normally, workers must be actively seeking employment to continue receiving benefits.

COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) enables workers to continue, for a limited time, their health care coverage after they are no longer eligible for their employers’ group health insurance plans. The workers—not the employers—pay the premiums for the continued coverage.

Employer-Sponsored Group Health Plans

The Health Insurance Portability and Accountability Act (HIPAA) contains provisions that affect employer-sponsored group health plans. HIPAA does not require employers to provide health insurance, but it does establish requirements for those that do. For instance, HIPAA restricts the manner in which covered employers collect, use, and disclose the health information of employees and their families. Employers must designate privacy officials, distribute privacy notices, and train employees to ensure that employees’ health information is not disclosed to unauthorized parties.

Affordable Care Act

The Affordable Care Act (ACA, commonly referred to as Obamacare) requires most employers with fifty or more full-time employees to offer health insurance benefits. Under the act, any business offering health benefits to its employees, even if it is not legally required to do so, may be eligible for tax credits of up to 35 percent to offset the costs.

Immigration Law

The United States did not have any laws restricting immigration until the late nineteenth century. Today, the most important laws governing immigration and employment are the Immigration Reform and Control Act (IRCA) and the Immigration Act.

CH16

CH16

Protected Class

A group of persons protected by specific laws because of the group’s defining characteristics, including race, color, religion, national origin, gender, sexual orientation, age, disability, and military status.

Title 7 of the Civil Rights Act

Title VII prohibits discrimination against employees, applicants, and union members on the basis of race, color, national origin, religion, gender, or sexual orientation at any stage of employment.

any employee—including an undocumented (alien) worker—can bring an action for employment discrimination.

Equal Employment Opportunity Commission (EEOC):

Monitors title 7. Can give right to sue to plaintiff where they can sue in federal court

Limitations on Class Action discrimination suits

The Court held that to bring a class action, employees must prove a company-wide policy of discrimination that had a common effect on all the plaintiffs covered by the action.

Intentional discrimination / disparate treatment

A form of employment discrimination that results when an employer intentionally discriminates against employees who are members of protected classes.

prima facie case

A case in which the plaintiff has produced sufficient evidence of a claim that the case will be decided for the plaintiff unless the defendant produces evidence to rebut it.

Must use this for disparate treatment suit

How to be part of prima facie case:

1. The plaintiff is a member of a protected class.

2. The plaintiff applied and was qualified for the job in question.

3. The plaintiff was rejected by the employer.

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

plaintiff will win if they can prove this

Unintentional discrimination / disparate impact

when a protected group is adversely affected by an employer’s practices, procedures, or tests, even though they may not appear to be discriminatory.

uses stats to prove employer is being discriminatory

4/5ths rule can point out disparate impact but is rule of thumb

Reverse discrimination

discrimination against “majority” individuals, such as white males.

42 U.S.C. Section 1981

prohibits discrimination on the basis of race or ethnicity in the formation of contracts.

Reasonable accommodation

An employer must “reasonably accommodate” the religious practices of its employees, unless to do so would cause undue hardship to the employer’s business. This means that an employer may need to make reasonable adjustments to the work environment to allow employees to practice their religion.

Determining Factor

Generally, to succeed in a suit for gender discrimination, a plaintiff must demonstrate that gender was a determining factor in the employer’s decision to fire or refuse to hire or promote her or him. Typically, this involves looking at all of the surrounding circumstances.

Wage Discrimination and the Equal Pay Act

requires equal pay for male and female employees doing similar work at the same establishment. To determine whether the Equal Pay Act has been violated, a court will look to the primary duties of the two jobs—the job content rather than the job description controls. If the wage differential is due to “any factor other than gender,” such as a seniority or merit system, then it does not violate the Equal Pay Act.

The Lilly Ledbetter Fair Pay Act

made discriminatory wages actionable under federal law regardless of when the discrimination began. Previously, plaintiffs had had to file a complaint within a year of discrimination. Today, if a plaintiff continues to work for the employer while receiving discriminatory wages, the time period for filing a complaint is basically unlimited.

Constructive Discharge

A termination of employment brought about by making the employee’s working conditions so intolerable that the employee reasonably feels compelled to leave.

When constructive discharge is claimed, the employee can pursue damages for loss of income, including back pay.

sexual harassment

The demanding of sexual favors in return for job promotions or other benefits, or language or conduct that is so sexually offensive that it creates a hostile working environment.

This is GENDER discrimination by the EMPLOYER

Quid Pro Quo Harassment

occurs when sexual favors are demanded in return for job opportunities, promotions, salary increases, or other benefits.

Hostile Environment Harassment

occurs when a pattern of sexually offensive conduct runs throughout the workplace and the employer has not taken steps to prevent or discourage it. In this situation, the workplace is permeated with discriminatory intimidation, ridicule, and insult, and this behavior is so severe or pervasive that it alters the conditions of employment.

tangible employment action

a significant change in employment status or benefits, such as occurs when an employee is fired, refused a promotion, demoted, or reassigned to a position with significantly different responsibilities. Only a supervisor, or another person acting with the authority of the employer, can cause this sort of injury. A constructive discharge also qualifies as a tangible employment action.

Harassment from employees or non-employees

When the harassment of coworkers, rather than supervisors, creates a hostile working environment, an employee may still have a cause of action against the employer. Normally, though, the employer will be held liable only if the employer knew, or should have known, about the harassment and failed to take immediate remedial action.

Online Harassment

Employees’ online activities can create a hostile working environment in many ways. Racial jokes, ethnic slurs, or other comments contained in e-mail, texts, blogs, or social media posts can become the basis for a claim of hostile-environment harassment or other forms of discrimination. Similarly, a worker who regularly sees sexually explicit and offensive images on a coworker’s computer screen may claim that they create a hostile working environment.

Remedies under Title 7

Reinstatement- get job back

Backpay - lost wages and benefits

retroactive promotions - get promotion should’ve had

damages- compensative or punitive

capped on employers size ^

Age Discrimination

Age discrimination is potentially the most widespread form of discrimination, because anyone—regardless of race, color, national origin, or gender—could be a victim at some point in life. The Age Discrimination in Employment Act (ADEA) prohibits employment discrimination on the basis of age against individuals forty years of age or older. The act also prohibits mandatory retirement for nonmanagerial workers. In addition, the act protects federal and private-sector employees from retaliation based on age-related complaints.

What to prove for age discrimination

To establish a prima facie case, the plaintiff must show the following:

The plaintiff is a member of the protected age group.

The plaintiff was qualified for the position from which he or she was discharged.

The plaintiff was discharged because of age discrimination.

Disability Discrimination

The Americans with Disabilities Act (ADA) prohibits disability-based discrimination in workplaces with fifteen or more workers (with the exception of state government employers, who are generally immune). Basically, the ADA requires that employers reasonably accommodate the needs of persons with disabilities unless to do so would cause undue hardship.

What to prove for Disability Discrimination

To prevail on a claim under the ADA, a plaintiff must show all of the following:

-The plaintiff has a disability.

-The plaintiff is otherwise qualified for the employment in question.

-The plaintiff was excluded from the employment solely because of the disability.

As in Title VII cases, a plaintiff must pursue the claim through the EEOC before filing an action in court for a violation of the ADA.

Disability Definition

A physical or mental impairment that substantially limits one or more of an individual’s major life activities.

A record of such an impairment.

Being regarded as having such an impairment.

Reasonable Accommodation

The ADA does not require that employers accommodate the needs of job applicants or employees with disabilities who are not otherwise qualified for the work. If a job applicant or an employee with a disability can perform essential job functions with a reasonable accommodation, however, the employer must make the accommodation.

Undue Hardship

Employers who do not accommodate the needs of persons with disabilities must demonstrate that the accommodations will cause “undue hardship” in terms of being significantly difficult or expensive for the employer. Usually, the courts decide whether an accommodation constitutes an undue hardship on a case-by-case basis by looking at the employer’s resources in relation to the specific accommodation.

Discrimination on Military Status

The Uniformed Services Employment and Reemployment Rights Act (USERRA) prohibits discrimination against persons who have served in the military. In effect, the USERRA makes military service and status a protected class and gives members of this class a right to sue an employer for violations.

How to prove Military Discrimination

To establish a prima facie case under the USERRA, the plaintiff must establish that the employer took an adverse employment action based in part on the employee’s connection with the military. If another similarly situated person who did not serve in the military or engage in a protected activity was treated more favorably than the plaintiff, the employer has violated the USERRA.

How many employees for employers to be responsible?

Title 7: 15+

Age discrimination in employment act: 20+

Americans with disabilities act: 15+

USERRA (Military): 1 person + EVERY COMPANY

3 Defenses to Employment Discrimination

Business Necessity- for disparate impact

Bona Fide Occupational qualification (BFOQ)- disparate treatment

Seniority Systems- for disparate impact

Business Necessity

A defense to an allegation of employment discrimination in which the employer demonstrates that an employment practice that discriminates against members of a protected class is related to job performance.

bona fide occupational qualification (BFOQ)

An identifiable characteristic reasonably necessary to the normal operation of a particular business. Such characteristics can include gender, national origin, and religion, but not race.

ex. man lifting heavy boxes, catholic priest

Seniority System

A system in which those who have worked longest for an employer are first in line for promotions, salary increases, and other benefits, and are last to be laid off if the workforce must be reduced. Can also discriminate on merit if someone does better.

After-acquired evidence of wrongdoing

After-acquired evidence of wrongdoing cannot shield an employer entirely from liability for discrimination. It may, however, be used to limit the amount of damages for which the employer is liable.

Affirmative Action

Job-hiring policies that give special consideration to members of protected classes in an effort to overcome present effects of past discrimination.

CH17

CH17

sole proprietorship

The simplest form of business, in which the owner is the business. The owner reports business income as personal income tax return and is legally responsible for all debts and obligations incurred by the business.

the sole proprietor IS the business

Advantages of Sole Proprietorship:

proprietor owns the entire business and has a right to receive all of the profits (because of assuming all of the risk)

starting a sole proprietorship is easier and less costly than starting any other kind of business because few legal formalities are involved.

This form of business organization also allows more flexibility than does a partnership or a corporation. The sole proprietor is free to make any decision she or he wishes concerning the business—including whom to hire, when to take a vacation, and what kind of business to pursue. In addition, the proprietor can sell or transfer all or part of the business to another party at any time and does not need approval from anyone else.

A sole proprietor pays only personal income taxes (including self-employment tax, which consists of Social Security and Medicare taxes) on the business’s profits. The profits are reported as personal income on the proprietor’s personal income tax return.

Disadvantages of a Sole Proprietorship:

The major disadvantage of the sole proprietorship is that the proprietor alone bears the burden of any losses or liabilities incurred by the business enterprise. In other words, the sole proprietor has unlimited liability, or legal responsibility, for all obligations incurred in doing business. Any lawsuit against the business or its employees can lead to unlimited personal liability for the owner of a sole proprietorship. In addition, creditors can go after the owner’s personal assets to satisfy any business debts.

It is also hard to obtain funding for the business.

When the sole proprietor dies, the business is dissolved.

Partnership

An agreement by two or more persons to carry on, as co-owners, a business for profit.

Three essential elements are implicit in the UPA’ s definition of a partnership:

A sharing of profits and losses.

A joint ownership of the business.

An equal right to be involved in the management of the business.

pass-through entity

A business entity that has no tax liability. The entity’s income is passed through to the owners, and the owners pay taxes on the income. A partnership is a pass-through entity

Joint liability

In partnership law, the partners’ shared liability for partnership obligations and debts. A third party must sue all of the partners as a group, but each partner can be held liable for the full amount.

Joint and several liability

A doctrine under which a plaintiff can file a lawsuit against all of the partners (jointly) or one or more of the partners separately (severally).

Dissociation

The severance of the relationship between a partner and a partnership when the partner ceases to be associated with the carrying on of the partnership business.