Agency and Employment Law Flashcards

Vocabulary terms and definitions related to agency relationships, employment law, business ethics, and types of business organizations based on lecture notes.

fiduciary

The type of relationship required to create agency.

duties of principals

Cooperate, reimburse for reasonable expenses, and compensate as provided by the agreement.

duties of agents

Loyalty, Care, Obey Instructions, and Provide Information.

exceptions to obeying instructions

An agent must obey the instructions of the principal unless the instructions are illegal or unethical.

indemnify

To reimburse.

at will (agency)

A type of agency where either party can terminate the agency at any time, for any reason.

apparent authority

When an agent seems to have authority but does not, and the principal is still bound by it.

implied authority

Authority to do acts that are reasonably necessary for conducting a transaction.

subagent

People hired by the agent.

express authority

Authority granted by words or conduct, reasonably interpreted, that causes the agent to believe the principal wanted them to do the act.

ratification

When a person accepts a benefit from an unauthorized transaction or fails to repudiate it, causing them to be bound by the act as if they had authorized it.

estoppel

The principle that no one can claim a person was not their agent if they knew others thought the person was acting on their behalf and failed to correct the belief.

scope of employment

The boundaries within which a principal can be held liable for the acts of an agent.

hiring or supervising

The specific areas of negligence for which a principal may be liable concerning the torts of an independent contractor.

detour

Occurs when an employee makes a minor departure from their employer's charge.

jointly and severally liable

A legal condition where an injured party can sue either the agent, principal, or both.

frolic

Occurs when an employee strays from employment activities far enough for the behavior to be completely unrelated.

ethical dilemma

A problem about what a firm should do for which there is no clear, right decision available.

Dayton Hudson

The individual who stated: 'The business of business is serving society, not just making money'.

ethics

The study of how people ought to act.

Milton Friedman

The individual who stated: 'The one and only social responsibility of business is to increase its profits'.

utilitarianism

The theory, followed by John Stuart Mill, that a correct decision is one that maximizes overall happiness and minimizes overall pain.

deontology

The theory, followed by Immanuel Kant, that states the results are not as important as the reason the decision was made.

stakeholder model

The view that companies must look to its employees, customers, and communities, and not just shareholders.

shareholder model

The view that companies must comply with the law and then make as much money for their shareholders.

at will employee

A type of employee that can be fired for any or no reason.

right-to-work laws

Laws that prevent employers and unions from excluding non-union workers or requiring employees to pay union fees.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Provides that former employees of companies with 20 or more employees must be allowed to continue health insurance for 18 months after leaving a job.

Intentional Infliction of Emotional Distress

A liability employers may face if they condone cruel treatment of their workers.

wrongful discharge

Prohibits an employer from firing a worker for a bad reason.

False Claims Act

Protects those who refuse to sign inaccurate reports.

FMLA

Guarantees men and women 12 weeks of unpaid leave per year for childbirth, adoption, or medical emergencies for themselves or a family member.

Civil Service Reform Act and Whistleblower Protection Act

Legislation that protects federal employees who report wrongdoings.

OSHA

An act passed to ensure safe working conditions.

lie detector test

Employers cannot require or suggest this unless in the investigation of a crime or losses involving theft/conversion.

Sarbanes-Oxley Act of 2002

Protects employees of publicly traded companies providing evidence of fraud and ensures officer accountability for financial conditions.

Equal Pay Act of 1963

States employees cannot be paid a lesser rate for equal work than opposite sex employees.

Title VII of the Civil Rights Act of 1964

Prohibits discrimination based on sex, race, color, religion, or national origin.

ADA

Prohibits disqualifying applicants with disabilities who can perform essential job functions with reasonable accommodation.

sole proprietorship

Unincorporated business owned by 1 person.

corporations

Entities characterized by limited liability.

close corporations

Corporation whose stock is not publicly traded on the stock exchange.

LLC

A business type with the tax status of a partnership and limited liability, currently facing legal uncertainty.

winding up

The process where all debts of a partnership are paid and remaining proceeds are distributed amongst partners.

general partnership

Unincorporated association of two or more co-owners who carry on a business for profit.

S Corp

Has limited liability and partnership tax status. Requirements include only 1 class of stock, US citizens/residents only, and no more than 100 shareholders.

dissolution

The decision to end a business.

termination

The ending of a business.

limited liability partnership

An entity where partners are not personally liable for debts and the entity is not taxable.

business trust

Unincorporated business run by trustees for the benefit of investors.

franchise

A compromise method of starting a business between employment and starting your own business.

joint venture

Partnership for a limited purpose that cannot be a nonprofit.

Uniform Partnership Act

States that what one partner knows, the partnership is deemed to know.

membership transfer

A specific interest that a partner cannot transfer in a partnership.

cooperatives

Groups that join together to gain the advantages of volume purchases or sales.

term

A partnership with a set length of time or a particular task, ending automatically when the task or time is finished.

at will (partnership)

A partnership where no end duration is agreed upon and any partner can leave at any time.

de jure corporation

Status when a promoter substantially complied with incorporation requirements but made a minor error.

de facto corporation

Status when a promoter made a good faith effort to incorporate and has used the corporation to conduct business.

AGE Discrimination in Employment Act of 1967

Applies only to individuals who are forty years of age or older.

partner compensation

Unless stated otherwise in the agreement, a partner is not entitled to extra compensation for additional effort.

new partner liability

Liability for partnership debts incurred before admission is limited to the partner's capital contribution.

agent status of corporate officers

The statement that a corporate officer is not an agent for the corporation is False.

agent status of independent contractors

The claim that an independent contractor always acts in the capacity of an agent is False.

pierces the corporate veil

A legal action that can make shareholders personally liable for corporate debts.

agent status of shareholders

The statement that a shareholder is an agent of a corporation is False.