Employment law

1. Employment law creation/operation of agency Employment contracts Discrimination

2. creation/operation of agency

3. What is an agency relationship? • Agency – The relationship when one party is authorized to alter another’s legal relationships. • Principal – The person who authorizes another to alter one of his or her legal relationships. • Agent – The party authorized by the principal to act on his or her behalf. • Anyone can be a principal or agent (even a minor and others who lack contractual capacity) as long as he or she understands the transaction. • Note: Minors and others can still avoid a contract for non-necessaries. Adults can’t use this to avoid a contract. • Warranty of Principal’s Capacity - If minor (or adult) is principal, law assumes agent promised third party that principal had capacity.

4. When does an agency relationship exist? • When one person is authorized to alter another person’s legal relationships. • What is the difference between an employee and an agent? • Employees – Work for pay under supervision and control of another person. • Agent – Employee who makes contracts on behalf of their employer (BOTH employee and agent) • Third Party – A party who deals with an agent who represents the principal • Scope of authority – The range of acts authorized by the principal.

5. How do states protect the public from agents in certain occupations? • Certain occupations must be licensed which usually requires passing a professional examination to ensure a degree of competency. • Fiduciary duty is the legal requirement that the agent serve the best interests of the principal with loyalty and obedience, reasonable care and skill, confidentiality, and accounting.

6. Scope of Agency Authority • Express Authority – Oral or written communication of authority by the principal or agent. • **Power of Attorney – Any writing that appoints someone as an agent. • Implied Authority – The power to do anything that is reasonably necessary or customary to carry out the duties expressly authorized. • Gratuitous Authority – Agency in which the agent receives no consideration and there is no contract. • Apparent Authority – Authority created when a principal leads the third party to reasonably believe that a particular person has agency authority. • **Note: Must always come from the principal’s words or conduct, not the agent’s words alone.

7. Which acts will bind the principal? • Any act within the scope of authority will bind the principal. • Acts reasonably necessary to carry out the expressed duties • Acts when principal has apparent authority • Acts the principal then ratifies by knowingly accepting its benefits. • Ratification – The principal’s approval of a previously unauthorized act or an act outside the agent’s scope of authority. •  **Note:  Principal will not be bound by acts outside of the scope of authority of the agent.

8. Agent’s Fiduciary Duties • Duty – Duty owed by agents to principals. • Note: Principal may sue an agent for violation of fiduciary duty to recover any loss or injury resulting from an agent’s violation of a fiduciary duty.

9. What are an agent’s fiduciary duties? • Loyalty and Obedience • Reasonable Care and Skill • Confidentiality • Accounting

10. Loyalty and obedience • Place interests of principals above all others • Secret profits – violate an agent’s duty. • i.e. Sale of principal’s property to a friend or relative at a reduced price without prior approval from the principal, or keeping part of the profits from a transaction without approval.

11. Reasonable Care and Skill • Exercise degree of care and skill that a reasonably prudent would use in a similar situation. • i.e. Failing to communicate information about a contract that would affect the principal’s decision would violate reasonable care and skill.

12. Confidentiality • Treat information about the principal with great caution • i.e. Providing secret information about a contract to a third party would violate confidentiality.

13. Accounting • Account to the principal for all money and property of the principal that comes into the agent’s possession. • i.e. Commingling funds would violate accounting. • Commingling – Mixing the funds or property of the principal and agent. • Trust Accounts – Separate accounts for the funds of principals.

14. Other Liabilities in Agency • When in a principal Liable? • For acts of tort or fraud • Authorized a Crime • Ratified the Act • Who is liable when agent acts outside scope of authority? • Agent alone unless principal ratifies act or has given apparent authority.

15. When is an agent liable to third persons? • Failure to fulfill obligations • Any loss + fees promised • Undisclosed principal • Principal lacks capacity

16. When is a principal liable to third persons? • Agreements made by agents while acting within the scope of their authority. • Unauthorized acts of agents if ratified • Not liable for crimes unless authorized or ratified by the principal.

17. How is an agency terminated? • Either principal or agent can terminate gratuitous agency per below. • When contract designates expiration • When parties agree to terminate • Death, insanity, or bankruptcy of either party • Becomes impossible to perform agency • Agent’s required actions become illegal due to a change in law

18. EMPLOYMENT CONTRACTS

19. Key Terms • Employer – A party who engages another to work for pay • Employee – A party who works under the supervision of another for pay • Employment – A contractual relationship in which one party engages another to work for pay under the supervision of the party paying

20. Employment Contract • Employment contract exists when the employer and the employee have a contract in which the employer contracts to pay an employee to do work under the employer’s supervision and control. • Key elements: • Must be paid for work • Supervision and control Must have both or relationship is not employment!!

21. At Will Employment • No agreement on the length of employment in the contract • May discharge employee at any time • Employee may quit at any time without being liable for breach of contract.

22. Independent Contractor • Independent contractor - One who contracts to do something for another but is free of the latter’s direction and control • Work Permit – A document obtained from the state allowing a person under 18 years old to work.

23. Duties of employee Created by state case law: • Obedience –obey the reasonable orders and rules of the employer • Can’t be required to act illegally, immorally, or contrary to public policy. • Reasonable skill – Possess the skill, experience, or knowledge necessary to do the work accepted. • Loyalty and honesty – Look out for employer’s best interest • Don’t commit fraud upon the employer or reveal confidential information • Reasonable performance – Perform assigned duties at the prescribed time and in the prescribed manner. • i.e. Employee who is well trained, but performs job carelessly may be discharged without liability to employer.

24. EMPLOYMENT CONTRACT TERMS • Contract terms are created in 1 of 3 ways: • Express agreements – Terms are given orally, in writing, or some combination. • Implied agreements – Based on custom or trade practice; state and federal laws. • Imposed by state/federal laws

25. EMPLOYER’S DUTIES • Reasonable treatment • Safe working conditions • Must not be harmful to the employee’s health, safety, morals or reputation • Fair Labor Standards Act • Minimum Wage • Maximum Hours Worked • Payroll Deductions • Withholding employee taxes from paycheck • Duties to minors – Involving minimum age, hours worked, and type of work • Military service and voting • Rehiring employee after honorable discharge • In some states, allow time off to vote

26. Government Programs • Employers should make payments for government programs • Workers’ compensation insurance – Compensate employees for injuries on the job. • Unemployment Insurance - provide short-term income for people who have recently lost their jobs. • Unemployment compensation - Employee discharged without cause is entitled to unemployment compensation benefits.

27. Injuries on the job • Employer is liable if employee, while acting within the scope of employment, commits a tort, whether the employer specifically authorized it or not.

28. Termination of employment contracts • Employment contracts terminable at Will • Wrongful Discharge – The firing of an employee in violation of the employment contract or state or federal law. • Violation of contract terms

29. Quitting a job • Employee may quit a job with no liability if: • Employer has breached the employment contract in a significant way • Term of employment in contract has ended • Employment is “at will” • Employee may be liable for quitting a job if: • They terminate early • Quitting violates the contract in some other way

30. Discharging an employee • Wrongful discharge – Firing an employee in violation of the employment contract or state/federal law • Discharged without cause – The firing of an employee despite the employee’s having complied with all terms of the employment contract. • Discharged for cause – The firing of an employee because of a violation of the employment obligation.

31. Firing an employee • Employers are liable if: • Firing violates the employment contract • Firing is in violation of state/federal law regarding discrimination • Employee refuses to commit perjury, insists on filing a workers’ compensation claim, reports company violations of law, or urges the company to comply with the law. • Note: If employer has committed a tort of wrongful discharge, employee may sue for damages.

32. Discrimination

33. Key terms • Employment Discrimination • Treating individuals within the workplace differently on the basis of race, color, gender, national origin, or religion. • Protected Classes • Groups of people with characteristics that may not legally be considered when making employment decisions.

34. legal employment discrimination • Justified Discrimination • Discrimination is justified and even encouraged if based on judging a person as an individual rather than as a part of a protected group. • Workers who are more productive contribute more to the success of a business and deserve better pay and opportunities. • Employers can favor employees who are more dependable, skilled, creative, smart, or hard working than other employees.

35. Illegal employment discrimination • Unjustified Discrimination • Discrimination is unjustified if judging people not as an individual but as members of a protected class of people. * Race * Color * Gender * Disability * Pregnancy * National Origin * Age over 40 * Religion

36. Ways of discriminating • Hiring • Firing • Salary Increases • Promotions • Awarding Training • Overtime • Educational Opportunities • Travel Requirements • Shift Rotations • Layoffs • Post-employment letters of recommendations • Any other aspect of employment

37. Proving/prosecutingillegal discrimination • Unequal Treatment – Treatment of a protected class less favorably than other employees. • How can unequal treatment be proved? • If direct evidence, employee need only prove that they are a member of a protected class. • If no direct evidence and employer denies, more must be proven. • HIRING PROCESS - May include proving application, was qualified, was rejected, and employer sought other persons with similar qualifications.

38. Defendingdiscrimination • Business Necessity – Employer’s defense that actions were meant to advance the business rather than create unjustified discrimination • Bona Fide Occupational Qualification – Employer’s defense that a job requirement compels discrimination against a protected class. • Bona Fide Seniority System – Employer’s defense that employees are rewarded based on length of employment rather than merit without intent to discriminate. • Pretexts – Job requirements, such as frequent travel, rule out a member of a protected class.

39. Policies in employment • Neutral on its face – A policy that makes no reference to a protected class. • Disparate Impact – The effect of a policy that eliminates more members of protected classes than members of the majority.

40. Sexual harassment • Employer is strictly liable for supervisors that harass subordinate • Also liable if non-supervisory personnel is harassing another employee if supervisor knew or should have known and failed to act.

41. Work environment • Hostile Environment – Environment in which unwelcome sexual comments, gestures, or contact interferes with an employee’s ability to work. • Quid pro quo – Boss threatens to fire subordinate unless sexual favors are provided, or some other term, condition, or privilege is offered for sexual favors. • Pattern and practice of discrimination – Statistically significant difference between the protected class composition of the pool of qualified applicants and the workforce.

42. Anti-discrimination laws • Civil Rights Act of 1964 • Equal Pay Act of 1963 • Lilly Ledbetter Fair Pay Act of 2009 • Age Discrimination in Employment Act of 1967 • Americans with Disabilities Act of 1990 • Pregnancy Discrimination Act

43. Civil rights act of 1964 • Forbids employers/agencies/unions from discriminate in hiring, paying, training, promoting, or discharging employees on the basis of race, color, religion, national origin, or sex. • Set up EEOC to investigate and/or prosecute complaints (Equal Employment Opportunity Commission). • Employer may be required to set up an affirmative action plan to remedy past discrimination.

44. Equal pay act of 1963 • Prohibits wage discrimination based on sex. • Exceptions: • Pay is based on merit or seniority system • Pay is based on quantity or quality of production or any factor other than gender

45. Lilly ledbetter act • Clarified acceptable reasons for differences in pay between men and women • Prohibited retaliation against workers who inquire about or disclose information about employers’ wage policies and their pay rates; • Made it easier to file class action lawsuits based on equal pay • Required the EEOC to survey current pay data and obliging employers to submit pay data identified by race, sex and national origin of employees.

46. Age discrimination in employment act of 1967 • Forbids discrimination against workers over the age of 40 in any employment practice, unless age is a necessary consideration for job performance.

47. Americans with disabilities act (ada) of 1990 • Requires that employer not engage unjustified discrimination against disabled persons on the basis of their disability. • Disability – A physical or mental characteristic that substantially limits a major life activity.

48. Pregnancy discrimination act • Makes it illegal to discriminate because of pregnancy, childbirth, or related medical conditions.