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1
in whole or in part.
employer? The answer to this question is yes—an employee’s ethical standards override the
employee’s duty of loyalty to his or her employer. In other words, an employee should abide by
The nature of the principal-agent relationship is trust. Because of this fiduciary rela-
tionship, an agent owes certain duties to the principal. These duties include loyalty and
obedience, as well as informing the principal of material facts concerning the agency, ac-
But the duty of loyalty has limits. An employee is not expected to violate his or her own
personal ethical standards by blindly doing what he or she is ordered to do. This is also true
2. When an agent acts in violation of his or her ethical or legal duty to the
principal, should that action terminate the agent’s authority to act on behalf of the
principal? Why or why not? Most courts have ruled that an agent’s authority continues, even
when there is a breach of loyalty. In one case, for example, employees of Lockheed Martin
Corporation copied confidential information and trade secrets from Lockheed’s computer
network. Lockheed had authorized the employees to access the files. When the employees
2 UNIT TWO: AGENCY AND EMPLOYMENT
in whole or in part.
It could be argued however, that when an agent acts in violation of his or her ethical or
legal duty to the principal, the agent’s authority to act on behalf of the principal should terminate.
3. If an agent-employee injures a third party during the course of employment,
the doctrine of respondeat superior applies. The employer may be held liable for the
employee’s action even though the employer did not authorize the action and was not
even aware of it. Is it fair to hold the employer liable in this situation? Would it be more
equitable if the employee alone was held liable for his or her tortious actions to third
parties, even when the actions were commit- ted within the scope of employment? An
employer should be required to assume responsibility for the wrongful actions of an agent or
employee. If one of two innocent parties must suffer a loss, the party in the better position to
Another reason in support of the doctrine of respondeat superior in this situation is that
an employer is assumed to be better able to pay any damages suffered by a third party. One of
4. How should immigration law be reformed? Does the United States have any
ethical duties to undocumented aliens who come here to work? How can the law be fair
and balance the rights of immigrants, their families, the companies that employ them,
and U.S. citizens? Unauthorized workers make up a small, but significant, percentage of the
U.S. workforce, particularly in the construction trade. Enforcement action against the workers
Some believe that it is unethical to target unauthorized workers—who are often im-
poverished and exploited—instead of those who take advantage of them. Toward this end, any
Others believe that it is the workers themselves who should be the target of changes in
the law. There is a perception that competition for jobs and the pay for those positions are
UNIT TWO: AGENCY AND EMPLOYMENT 3
Still others advocate that the law should be reformed to allow for the employment of non-
citizens without necessarily increasing the numbers of those who become U.S. citizens or
5. Should the law prohibit discrimination against transgender persons? Why or
why not? Some states have laws that specifically ban discrimination based on gender identity,
and there are those who advocate that federal law—Title VII of the Civil Rights Act of 1964—
2 UNIT TWO: AGENCY AND EMPLOYMENT
in whole or in part.
It could be argued however, that when an agent acts in violation of his or her ethical or
legal duty to the principal, the agent’s authority to act on behalf of the principal should terminate.
3. If an agent-employee injures a third party during the course of employment,
the doctrine of respondeat superior applies. The employer may be held liable for the
employee’s action even though the employer did not authorize the action and was not
even aware of it. Is it fair to hold the employer liable in this situation? Would it be more
equitable if the employee alone was held liable for his or her tortious actions to third
parties, even when the actions were commit- ted within the scope of employment? An
employer should be required to assume responsibility for the wrongful actions of an agent or
employee. If one of two innocent parties must suffer a loss, the party in the better position to
Another reason in support of the doctrine of respondeat superior in this situation is that
an employer is assumed to be better able to pay any damages suffered by a third party. One of
4. How should immigration law be reformed? Does the United States have any
ethical duties to undocumented aliens who come here to work? How can the law be fair
and balance the rights of immigrants, their families, the companies that employ them,
and U.S. citizens? Unauthorized workers make up a small, but significant, percentage of the
U.S. workforce, particularly in the construction trade. Enforcement action against the workers
Some believe that it is unethical to target unauthorized workers—who are often im-
poverished and exploited—instead of those who take advantage of them. Toward this end, any
Others believe that it is the workers themselves who should be the target of changes in
the law. There is a perception that competition for jobs and the pay for those positions are
UNIT TWO: AGENCY AND EMPLOYMENT 3
Still others advocate that the law should be reformed to allow for the employment of non-
citizens without necessarily increasing the numbers of those who become U.S. citizens or
5. Should the law prohibit discrimination against transgender persons? Why or
why not? Some states have laws that specifically ban discrimination based on gender identity,
and there are those who advocate that federal law—Title VII of the Civil Rights Act of 1964—
