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Explain:
The terms “principal” and “agent.”
The role of an “independent contractor.”
The legal process used by an agent to create a binding relationship between the principal
and third party.
The duties owed by an agent to a principal.
Figure 21.1—“Illustration of the agency relationship”
B. Contractual Liability from an Agent’s Acts
Emphasize:
How an employer can be bound to a third party by an employee through a contract.
Actual Authority
Explain:
The term “actual authority.”
An example where “actual authority” can be seen exercised.
Explain:
The term “apparent authority.”
That the basic concepts of agency law apply to the operation of business
organizations.
The role of a partner in a trading partnership as well as a nontrading partnership.
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Explain:
The meaning of a tort.
The importance of seeing if agent was acting within the scope of employment when the
tort occurred.
The concept of “respondeat superior” and its importance.
The responsibilities of the employer when an employee is on frolic and detour.
D. Criminal Liability
Explain:
How agents can impose criminal liabilities on businesses.
E. Employee Lawsuits (LO 21-5)
Emphasize:
That the best protection against unfounded discrimination claims is a system of adequate
documentation, often called the “paper fortress.”
A chronological record of unsatisfactory work performance is a very useful defense
against unjustified lawsuits following discipline, denial of promotion, or discharge.
avoid unfounded discrimination claims.
How effective codes of ethics can be used to help combat unfounded claims.
Sidebar 21.16—“What Can Employers Do to Avoid Employment Litigation?”
Answers to Review Questions and Problems
Employment Laws
1. Minimum Wages and Maximum Hours
a) The federal law that establishes the minimum wage and the hours in a work week is
2. The WARN Act
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
a) Covered employers are those with 100 or more employees. Anyone working less than
½ time does not count in determining whether the employer has 100 or more
employees.
b) The WARN notice must be in writing.
c) The WARN notice must be delivered at least 60 days prior to a plant closing or a mass
layoff.
d) The WARN notice must be delivered to all employees or their bargaining
representative (union), to the state’s dislocated worker unit, and to the elected chief
officer of the local government.
3. The Family and Medical Leave Act
Suzanne’s employer is required to grant her only 12 weeks of family medical leave during
any 12-month period. Since Suzanne used 10 weeks during her pregnancy, she has only 2
4. Uniformed Services Employment and Reemployment Rights Act
5. Occupational Safety and Health Administration
6. Pension Plans and Health Care
As the number of retirees grows, due to longer life expectancies and the “boomer-baby”
7. Limitations on Employment at Will
Terry’s best argument is that the promise in the employee’s handbook creates an exception
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
to the at-will employment doctrine. Therefore, if she decides to sue in a court of law, she
may be allowed to quote the handbook. However, this does not guarantee a ruling in her
favor.
8. Workers’ Privacy
The company has a legitimate business interest in protecting its employees from
9. Workers’ Compensation Acts
10. Employment Eligibility Verification
The IRCA requires verification and permits the use of a combination of documents specified
by federal law. The use of a driver’s license with a picture along with the social security card
or a green card.
Agency Law
11. Terminology
a. The three parties of an agency relationship are the principal, agent, and independent
12. Contractual Liability
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
perfectly ok on their part to still feel Albert is an agent of Paulette. However, Paulette can
bring a lawsuit upon Albert to recover monies he owes her.
13. Tort Liability from an Agent’s Acts
Since Stewart is an employee and assaulted the customer Tammy on purpose, within the
14. Criminal Liability
There are a multitude of ways in which an organization can be found criminally responsible.
15. Employee Lawsuits
a. The term “paper fortress” refers to meticulously maintained records that include job
descriptions, personnel manuals, and employee personnel files.
1. How is the workday calculated?
The Fair Labor Standards Act and court cases interpreting this law define the workplace as
2. What legal requirements have to be met before layoffs can occur?
60 days prior to the layoffs or closing.
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3. What is the company’s responsibility to educate workers about their rights under the Family
and Medical Leave Act?
4. Can your company properly monitor its employees’ phone calls and e-mail messages?
The Electronic Communications Privacy Act mandates that employers are not permitted to