Agency, Employment Law, Worker Protection, and Labor Law

Flashcards covering agency formation and duties, tort/contract liability, independent contractor status, employment law (FLSA, FICA, OSHA, FMLA), and labor law (NLRA, collective bargaining, right-to-work).

According to the Drivers of an Organization's Performance pyramid, what are the five foundational tiers from the base to the apex?

1. Ethics: Organization's commitment to do the right thing.
2. Governance: Managing resources of the organization IAW statutes, by-laws, resolutions & IAW Ethics.
3. Compliance: Operating the organization IAW external requirements, internal policies & IAW Ethics & Governance.
4. Strategy: Planning for increasing ownership value & ensuring sustainable growth & IAW Ethics, Governance, Compliance.
5. Operations: Conducting everyday activities IAW policies, protocols, procedures, and processes & IAW Ethics, Governance, Compliance, Strategy.

What are the four primary sources of law in the United States legal system?

1. Constitutional: Federal and state constitutions (and county/city charters) establishing governmental structure and citizen rights.
2. Statutory: Legislative enactments and local ordinances.
3. Administrative: Regulations and rules issued by authorized government agencies based on statutory language.
4. Common Law: Case law and judicial rulings on constitutional, statutory, and regulatory language, as well as previously decided cases.

How does the Restatement (Second) of Agency, §1(1) define the agency relationship?

Agency is the fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act.

What three core fiduciary duties does an agent owe to their principal?

Obedience, care, and loyalty.

In the illustrated Principal-Agent relationship diagram, how do contractual obligations flow among the principal, agent, and third party?

An agency contract exists between the principal and the agent. The agent enters into a contract with a third party on behalf of the principal, creating a direct legal obligation for the principal to perform the contract with the third party.

What are the four methods by which an agency relationship and authority can arise?

1. Express Agency
2. Implied Agency
3. Apparent Agency ("agency by estoppel")
4. Agency by Ratification

How do express agency and implied agency differ in how agent authority is established?

In express agency, authority is expressly given to the agent by the principal. In implied agency, authority is implied from the conduct of the parties, custom, usage of trade, or acts incidental to carrying out the agent's duties.

What distinguishes apparent agency from agency by ratification?

Apparent agency occurs when the principal leads a third party to believe an agent has authority, binding both to the contract. Ratification occurs when a person without authority acts as an agent; the contract does not bind the principal or third party unless the principal subsequently ratifies it.

What is the primary distinction between an employer-employee relationship and a principal-agent relationship?

In an employer-employee relationship, the employer has the right to control the physical conduct of the employee. In a principal-agent relationship, the agent has authority to act on behalf of the principal as authorized and implied from the agency.

What is a power of attorney, and what are its two main types?

A power of attorney is an express, written agency agreement appointing an attorney-in-fact to sign legal documents on behalf of a principal. Its two forms are general power of attorney and special power of attorney.

What are the four affirmative duties a principal owes to an agent?

1. Duty to compensate: Pay the agreed-upon amount.
2. Duty to reimburse: Repay expenses incurred by the agent during the agency on the principal's behalf.
3. Duty to indemnify: Protect the agent for losses suffered due to the principal's misconduct.
4. Duty to cooperate: Assist the agent in performing their duties.

What are the agent's duties regarding performance, notification, accountability, and loyalty?

• Duty to perform: Lawful duties executed with reasonable care, skill, and diligence.
• Duty to notify: Inform the principal of important information (subject to the doctrine of imputed knowledge).
• Duty of accountability: Maintain accurate accounting of all transactions.
• Duty of loyalty: Refrain from acting adversely to the principal's interests.

How is contract liability to third parties distributed across fully disclosed, partially disclosed, and undisclosed agencies?

• Fully Disclosed Agency: The principal is liable; the agent is not liable (unless guaranteeing performance).
• Partially Disclosed Agency: Both the principal and the agent are liable.
• Undisclosed Agency: Both the principal and the agent are liable.

What is the doctrine of respondeat superior, and when does it apply?

Meaning "let the master respond," respondeat superior imposes vicarious liability on a principal for torts committed by an agent or employee while acting within the scope or course of their employment.

How do the 'frolic and detour,' 'coming and going,' and 'dual-purpose' rules affect principal tort liability?

• Frolic and Detour: The principal is not liable if the agent's detour for personal errands is substantial.
• Coming and Going Rule: The principal is not liable for torts committed while an agent travels to or from work.
• Dual-Purpose Rule: In most jurisdictions, both principal and agent are liable if the trip serves business and personal purposes.

Under what circumstance is a principal held liable for an agent's criminal acts?

A principal is generally not responsible for an agent's criminal act unless the principal ordered or directed the act.

What was the holding regarding scope of employment in Matthews v. Food Lion, LLC (2010)?

The court held that an off-duty grocery store employee (Hall) who went to the bathroom and accidentally struck the plaintiff was not acting within the scope of her employment at the time of the accident.

Why was the defendant restaurant found not liable in Bosse v. Brinker Restaurant Corp., d.b.a. Chili's (2005)?

The court ruled that a restaurant patron who pursued non-paying customers in a high-speed car chase resulting in a crash was not an agent of Chili's.

Why was the radiologist deemed an apparent agent in Webster v. CDI Indiana, LLC (2019)?

The plaintiff reasonably believed CDI provided the CT scan and had no knowledge of the contract classifying the radiologist as an independent contractor, creating apparent agency.

Why was the employer relieved of vicarious liability in Burlarley v. Wal-Mart Stores, Inc. (2010)?

The cashier's action of throwing a full bag of shoes and shampoo at a customer as a joke was driven by personal motivation rather than work-related duties, precluding vicarious liability.

How does the Restatement (Second) of Agency, §2 define an independent contractor?

A person who contracts with another to do something for him who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking.

What direct legal relationship is shown between the hiring party and the outside worker in this diagram?

A direct contract between a principal and an independent contractor, wherein the principal does not have the right to control the physical conduct of the contractor.

What is the crucial factor used to determine whether a worker is classified as an employee or an independent contractor?

The principal's degree of control over the worker, including whether the principal controls the manner and means of work, supplies tools, the skill level required, and whether the worker operates an independent business.

What is the general rule concerning a principal's liability for the torts of an independent contractor?

Principals are generally not liable for the tortious conduct of independent contractors; independent contractors are personally liable for their own torts.

What did the court determine regarding trademark use and agency in Thornton v. Ford Motor Company (2012)?

The court held that an authorized car dealer's use of Ford's trademark did not make the dealership (Ibex) an actual or apparent agent of Ford; the dealership remained an independent contractor.

What events terminate an agency by acts of the parties versus by operation of law?

• By Acts of the Parties: Mutual agreement, lapse of time, purpose achieved, or occurrence of a specified event.
• By Operation of Law: Death or insanity of the principal or agent, bankruptcy of the principal, or war between their countries.

How do tax withholding and statutory benefits differ between a W-2 employee and a 1099-MISC independent contractor?

For an employee ($\text{IRS Form W-2}$), the employer pays for benefits, workers' comp, and unemployment, and withholds income tax, FICA ($6.2\%$), and Medicare ($1.45\%$). For an independent contractor ($\text{IRS Form 1099-MISC}$), the principal pays no benefits, and the contractor calculates and pays their own taxes.

What is the legal difference between an at-will employee and a term employee?

A term employee has an employment contract for a specified duration and can only be terminated for cause during the contract term. An at-will employee has no contract and can be terminated at any time without cause.

What child labor rules are established under the Fair Labor Standards Act (FLSA) by age bracket?

• Under age $14$: Allowed only as newspaper deliverers.
• Ages $14$ and $15$: Limited hours; nonhazardous jobs.
• Ages $16$ and $17$: Unlimited hours; nonhazardous jobs.

What is the federal minimum wage rate under the FLSA, and what is its annual full-time equivalent?

The federal minimum wage is $7.25\text{ per hour}$ (unchanged since July $2009$), which amounts to $15,080\text{ per year}$ based on $2,080\text{ hours}$ ($7.25 \times 2,080$).

What overtime premium does the FLSA mandate for nonexempt employees?

Overtime pay of at least $1\frac{1}{2}$ times the employee's regular hourly rate for each hour worked in excess of $40\text{ hours}$ in a workweek.

What are the six categories of exempt employees under the FLSA, and what standard salary threshold applies?

The six categories are executive, administrative, professional, outside sales, certain computer, and highly compensated employees. To qualify, employees must generally earn a salary of at least $684\text{ per week}$ ($35,568\text{ per year}$).

What are the criteria for the 'highly compensated employee' exemption under the FLSA?

The employee must receive total annual compensation of at least $107,432$ (including at least $684\text{ per week}$ paid on a salary or fee basis), primarily engage in office or non-manual work, and perform at least one exempt duty of an executive, administrative, or professional employee.

How is workers' compensation administered, and what is the 'exclusive remedy' doctrine?

Workers' compensation is administered through state agencies using preset statutory limits funded by employer insurance premiums or self-insurance. Under the exclusive remedy doctrine, an injured employee cannot sue their employer in court for work-related injuries.

What does the Federal Unemployment Tax Act (FUTA) require, and who administers the program?

FUTA requires employers to pay federal unemployment taxes to compensate workers who are temporarily unemployed. Individual unemployment compensation programs are administered by state governments under federal guidelines.

What are the employer and employee tax rates and wage caps for FICA Social Security and Medicare in $2024$?

• FICA Social Security: $6.2\%$ each from employer and employee ($12.4\%$ if self-employed) up to a wage cap of $168,600$.
• Medicare: $1.45\%$ each ($2.90\%$ if self-employed) with no wage cap.

What are the statutory requirements for employers regarding Form I-9, and how do B-1 and H-1B visas differ?

Employers must complete Form I-9 to verify employment eligibility and identity for all hired workers. B-1 visas provide temporary entry (up to $6\text{ months}$) for business purposes. H-1B visas are employer-sponsored visas allowing foreign nationals to work in 'specialty occupations.'

What is the difference between OSHA's 'specific duty standards' and the 'general duty standard'?

Specific duty standards set explicit workplace safety rules for particular equipment, procedures, and industries. The general duty standard is a catchall provision requiring employers to provide a workplace free from recognized hazards causing or likely to cause death or serious physical harm.

What are the employer coverage thresholds, employee eligibility criteria, and leave entitlements under the Family and Medical Leave Act (FMLA)?

FMLA covers employers with $50$ or more employees. Eligible workers (employed at least $1\text{ year}$ and with over $1,250\text{ hours}$ worked in the prior $12\text{ months}$) are entitled to up to $12\text{ weeks}$ of unpaid, job-protected leave per $12\text{-month}$ period for birth, adoption, or serious health conditions.

What core protections are granted under Section 7 of the National Labor Relations Act (NLRA), and who is excluded from bargaining units?

Section 7 grants employees the right to organize, form, join, or assist labor organizations, and to bargain collectively. Managers and professional employees are excluded from belonging to unions formed by employees they supervise.

What is collective bargaining, and what standard of negotiation does labor law require?

Collective bargaining is the negotiation process between an employer and union representatives over employment terms, resulting in a Collective Bargaining Agreement (CBA). The law requires both parties to bargain with each other in good faith.

How did U.S. labor union membership change between $1964$ and $2023$?

Union membership declined from approximately $33\%$ of the workforce in $1964$ down to $10\%$ in $2023$ ($7.0\text{ million}$ public-sector and $7.4\text{ million}$ private-sector workers, representing only $6\%$ of private-sector workers).

How do Union Shop, Agency Shop, and Closed Shop security agreements differ in legality and structure?

• Union Shop (Lawful): Requires hired employees to join the union within a specified number of days.
• Agency Shop: Employees need not join the union but must pay an agency fee (ruled unlawful for public-sector employees in $2018$).
• Closed Shop (Illegal): Requires an employer to hire only workers who are already union members.

Based on Section 14(b) of the Taft-Hartley Act, what do the blue states on this map represent?

The blue states are 'Right to Work States' that have enacted statutes prohibiting union shop or agency shop agreements, ensuring employees cannot be forced to join a union or pay union dues/fees as a condition of employment.

What significant action did Michigan take regarding its Right to Work law in 2023–2024?

The Michigan Legislature passed legislation on March 24, 2023, repealing its Right to Work law; the repeal took effect on February 12, 2024.