LEB 320F 1st Edition Lecture 24 Outline of Last Lecture II ADA a ADAAA III Health and Safety a OSHA IV Wrongful discharge a Wagenseller v Scottsdale Memorial Hospital V Employee Privacy VI FMLA VII Agency a Creation i King v Bankerd ii Spoerr v Manhattan Life b Duties c Termination i Act of parties ii Operation of Law d Authority VIII Industrial Molded v J Gross and Sons IX City Electric v Dean Outline of Current Lecture X Agent s liability XI Principal s liability for Independent Contractor s Torts XII Test for Employee Status a TAMU v Bishop XIII Torts XIV Employee s negligence and intentional torts XV Business Entities XVI Sole Proprietorship a Formation b Advantages c Disadvantages XVII Partnership a Creation Current Lecture Current Events o Mistakenly being identified as the Boston Marathon Bomber Defamation o Oakley Sports Goggles Defective product Warning says do not wear while skiing Agent s liability o No principal All members are then agents Promoters Unless 3rd agrees o Partially disclosed principal Agent and principal liable o Undisclosed principal Agent liable and principal liable when disclosed Principal s liability for Independent Contractor s Torts o Normally not o Exception inherently dangerous Hiring homer to dispose of nuclear waste o Nondelegable duty o Right of control o Towing cars at auction Test for Employee Status o How much control direction or supervision by principal o Part of principal s line of work o Does the person have other jobs o Who supplies the tools o How long is the job Shorter Independent Contractor o Method of payment Hourly Overtime At end of job Independent Contractor o Skill level o TAMU v Bishop Independent Contractor A M doesn t have to pay because no responsible Torts o Civil wrong Agent is liable Principal is better Controls capital Principal s authorization of Agent s tortuous conduct Negligent supervision Negligent retention hiring Respondent superior or vicarious liability Incentive to control agents Risk spreading ins or pricing Who gets the benefits Risk as a commodity 2 prong test o 1 Master Servant Employer Employee o 2 Within scope Principal responsible for detours not for frolic Employee s negligence and intentional torts have to meet all of them o Authorized bouncer rare Time place purpose Act common Employer s interests advanced Private interests of employee Employer furnish means Employee s proclivities for same similar acts Serious crime Departures from employer s business Driving home o Intentional torts Battery Harassment Coming Going and shooting o Lazar v Thermal Company car and deviation Example You are VP for largest fast food chain in TX You receive a report that last night Pat a part time 17 year old employee who works at largest Dallas county location struck and severely injured a customer Customer has broken cheekbone and severe burns to face One eye may never recover and the other was unaffected Customer was in line at 2 08 am and taunting Pat for not bringing order fast enough Tests show patron victim was intoxicated Witnesses include 2 Dallas County deputy sheriffs o You will be sued under what theories of liability What will plaintiff need to prove o You will respond by arguing the following defenses What will you need to prove o You will respond to media requests by saying o You will consider settling for and when and why o You will make following changes in hiring training and retaining employees o Don t assume facts Patron is a woman o Intentional tort of battery and assault o Recommendation state that customer safety is 1 concern regret the tragic accident don t blame victim pay patron s medical fee Business Entities LAST CHAPTER FOR EXAM 3 Who are you Peter Townshend Considerations on Org choice o Absence a legal frame work where are you o Protection from personal liability o Minimize taxation o Ability to raise capital Transferability o Hassle expense o Control Sole proprietorship You against the world o o o o o o o o o An unincorporated business owned by 1 person o Just you o Most prevalent form of business org in the US Formation of sole proprietorship o ZAP now you have one o Consider business name o Operation assumed name Why How Register your name Advantages of sole proprietorship o Fast quick cheap o Minimal record keeping o Minimal reporting to owners and regulators Certificate of assumed name o Management is centralized and full o Flow through taxation o You keep all net profits Disadvantages of sole proprietorship o No check on management one view one way o Fragile business existence death or incapacity fighting heirs o Goodwill o Odd transferability at best of ownership interests o Therefore tough to raise equity capital debt capital o UNLIMITED PERSONAL LIABILITY Partnership o Association of 2 or more to jointly own and operate a business share profits and losses o Partners may be any type of business entity o Right to partnership share in management and profits and losses o In a general partnership all partners are general partners each has full authority over business affairs in contrast with a limited partnership Creation of Partnership o Almost always by agreement oral written o May be by action o H2O v Brazos No writing Reverse find of partnership o Joint venture limited duration and scope partnership o Partnerships are a creation of state laws which state UPA RUPA Put in your agreement o Uniform laws o Agreement controls default is statute