I. LIABILITY TO THIRD PARTIESA. Who is Responsible to Third Parties for Their Injury?1. Principal2. Agent3. BothB. What was the Cause of the Injury?1. Breach of Contract2. TortC. Contract Liabilitya1. What authority did the agent have to enter into the contract?a) Actual authority(1) Express(2) Impliedb) Apparent authority(1) Comes from the third party(2) Third party must have reasonable belief of agent’s authority(3) Reasonable belief usually comes from(a) The principal’s actions(b) The failure of the principal to act(c) Previous dealings between the agent and third partyc) No authority(1) Agent has neither actual nor apparent authority(2) Principal may elect to ratify the contract(a) Principal must know all the material facts(b) Principal must ratify entire contract2. Was the principal disclosed at the time of the contracta) Disclosed principalb) Partially disclosed principalc) Undisclosed principal3. Principal’s liability to third partiesa) Agent’s authority(1) Actual authority(2) Apparent authority(3) No authority4. Agent’s liability to third partiesa) Principal’s disclosure status(1) Disclosed(a) Agent had authority (actual or apparent)(b) Agent lacked authority(2) Partially disclosed(3) UndisclosedD. Tort Liability1. Agents are always liable for their own tortious acts.2. Principal’s liability for agent’s tortious acts (respondeat superior)a) Principal/agent relationship must exist, andb) Agent’s tortious actions took place in the scope of employment3. Scope of Employmenta) Negligent torts(1) At place of work(2) During work time(3) Advancing the principal’s interests(4) Generally, driving to and from work is outside the scope.(5) Frolic v. Detour(a) Time away from work(b) Distance away from work(c) Nature of the activity reasonably foreseeable?b) Intentional torts(1) Normally outside the scope of employment(2) May be in the scope if(a) The conduct is foreseeable, and/or(b) Arguably is advancing the employer interestsLecture Outline:II. EMPLOYMENT AT WILLA. Employers may Fire Employees for Any ReasonB. Exceptions to Employment At Will1. Contractsa) Express contractb) Implied contract(1) Employment manuals(2) Past practices(3) Some courts have implied that there must be a good faith reason for firing an employee.2. Public Policya) Usually expressed in a statuteb) WhistleblowingIII. LAWS REGULATING THE EMPLOYMENT RELATIONSHIPA. Fair Labor Standards Act (FLSA)1. Child Labor2. Minimum Wage3. Overtimea) For work in excess of 40 hours per weekb) Overtime provisions do not apply to management/professional employees.c) Management issues(1) Clearly define employee responsibilities(2) Have employees document hours workedB. Occupational Safety and Health Act (OSHA)1. Requires employers to maintain reasonably safe working conditions2. OSHA officers may inspect the workplace3. Employers are required to keep injury and illness records.C. Workers’ Compensation1. Provides compensation for workers injured in the course of employment2. No fault compensation plan for accidental injuries3. Prohibits employee from suing the employer for negligenceD. Social SecurityE. ERISAF. Unemployment CompensationG. COBRAH. Family and Medical Leave Act1. Applies to businesses with 50 or more employees2. Employees entitled to up to 12 weeks of unpaid family or medical leavIV. EMPLOYEE PRIVACYA. Electronic Monitoring1. Generally, employers may monitor e-mails, voice mails, phone records, computer files, internet usage, etc. if the employer provides the system/phone/computer.2. Employees should have no expectation of privacy if employer provides the necessary tools.3. Employers do not need to provide notice of monitoring, but many do to avoid any possible action by the employeeB. Drug Testing1. Unless you work for the government, you have no constitutional protection from drug testing2. Drug testing is regulated by state law and can vary dramaticallyV. IMMIGRATION ISSUESA. Immigration Reform and Control Act (IRCA)1. Illegal to hire, recruit, or refer people not authorized to work in U.S.2. I-9 verification formsa) 3 days to completeb) Verify that employee is authorized to work in U.S.3. Enforcement/penaltiesa) Government may use random compliance auditsb) Warrants are not requiredc) Substantial fines, possible prison punishment for pattern of violations.B. The Immigration Act1. Allows businesses to hire specially qualified foreign workersa) Employer must show that either(1) No U.S. applicant is qualified, or(2) Employee is highly skilled/specialistLecture:Employers may not give a reason or notice for firing an employee, but they cannot discriminate against employees.Wistleblower Act: In some industries, employers cannot fire employees because they turned the company in for doing something illegal. Not all industries have a Whistleblower Act.ERISA: Protects employee’s retirement accounts so that employers can’t take them away when they fire them.COBRA: Employers have to sponsor group health plans and offer employees and their families a group health plan for a certain period of time after they lose their health care coverage.Family and Medical Leave Act: Employees have to be able to leave for family emergencies and medical injuries or illnesses without getting fired.MGMT 217 1st Edition Lecture 17Last Lecture OutlineI. LIABILITY TO THIRD PARTIESA. Who is Responsible to Third Parties for Their Injury?1. Principal2. Agent3. BothB. What was the Cause of the Injury?1. Breach of Contract 2. TortC. Contract Liabilitya1. What authority did the agent have to enter into the contract?a) Actual authority-comes from the principal(1) Express(2) Impliedb) Apparent authority(1) Comes from the third party(2) Third party must have reasonable belief of agent’s authority(3) Reasonable belief usually comes from (a) The principal’s actions-secret limitation example(b) The failure of the principal to act-furniture store “salesman”(c) Previous dealings between the agent and third partyc) No authority(1) Agent has neither actual nor apparent authority(2) Principal may elect to ratify the contract(a) Principal must know all the material facts(b) Principal must ratify entire contract2. Was the principal disclosed at the time of the contracta) Disclosed principal-third party know the identity of the principalb) Partially disclosed principal-third party does not know the identity of the principalc) Undisclosed principal-third party is unaware that a principal exists3. Principal’s