Agency

As a small-business owner, you are faced with rising costs, particularly employment costs, insurance, and the like. You decide to hire some friends and pay them as they work rather than go through the expense and procedure of bringing in “actual” employees. Your friends wear the business uniform, deal with vendors and customers, and tell friends and family that they work for the business. In one instance, one friend orders way too much from a vendor.

• Explain agency law terminology and the three ways an agency relationship is created, per the text reading. What are the implications of agency law that apply in the above scenario? Is your business liable for the improper order? Why or why not? Be sure to explain the scope of employment.


• Explain the applicability of the employment-at-will doctrine and identify and explain all the exceptions. If your employer does not like your hairdo, can he fire you? Pursuant to the doctrine, explain your answer per the law.

As a Manager and business executive, you know an important part of providing for your employees is safety in the workplace. When a worker gets hurt on the job and "in the scope of his or her employment," they have two avenues in which to seek compensation for their injuries and costs. One is to sue the employer for the tort of negligence if it is warranted, the other is worker's compensation for injuries on the job.

First, what is a tort and, what is negligence? 

• Pursuant to the chapter reading, a tort is:  a private wrong.  Some type of interference with someone or with someone's property that results in either injuries or damages (financial costs) to the person or property.  Example:  You hit your coworker over the head because they sneezed on you.  You have committed the intentional tort of battery. (Don't confuse this with the criminal charge of battery).  A tort is a private civil action between two parties.  A crime is the state coming after you for a crime. 


• Negligence is a type of tort and per the reading, negligence is: when the conduct of one party does not live up to a certain minimal "standard of care."  We call this the reasonable person standard. Negligence imposes liability when we are careless and there are four required elements to prove negligence, ie. legal duty, breach of legal duty, causation and damages or injuries. 

Worker's compensation works like a state insurance plan and the goal is to get the worker back on the job. It is designed to be immediate so the worker does not have to wait to start "getting healthy." When a worker elects worker's compensation, it becomes their "exclusive remedy."  Thus, they give up their right to sue the employer for injuries or for a tort.   Most worker's compensation programs are state run and most employers are required by state law to have worker's compensation insurance.

See the link for your home state: https://www.dol.gov/owcp/dfec/regs/compliance/wc.htm

When it comes to safety in the workplace - what is the law?

We look to the Department of Labor and the administrative laws below and generally, employers are required to follow a standard "reasonable duty of care." This duty can become heightened with the type of job. See the links below:

Occupational Safety and Health Administration

https://www.osha.gov/

Fair Labor Standards Act

https://www.dol.gov/whd/

Office of Worker's Compensation

https://www.dol.gov/owcp/