Chap019

The Legal and Regulatory Environment of Business

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Chapter 19 - Agency and Employment Laws CHAPTER 19 AGENCY AND EMPLOYMENT LAWS I. LEARNING OBJECTIVES The purpose of this chapter is to introduce the students to basic agency and employment issues. First, a discussion of agency principles exposes your students to the operational realization that all organizations rely on people to accomplish tasks. Next, the chapter provides an overview of basic employment issues and laws. II. REFERENCES Azari-Rad, H., P. Philips, and M. Prus, The Economics of Prevailing Wage Laws . Ashgate (2005). Decker, K., Family and Medical Leave in a Nutshell . West Publishing (2000). Gregory, W.A., Hornbook on the Law of Agency and Partnership , 3 rd ed. West Publishing Co. (2001). Guerin, L. and A. Delpo, Essential Guide to Federal Employment Laws , NOLO (2006). Hynes, J.D. and Lowenstein, Agency, Partnership, and the LLC in a Nutshell , 3 rd ed. West Publishing Co. (2005). III. TEACHING OUTLINE PRINCIPLES OF AGENCY LAW 1. Terminology A. Emphasize : (1) That employees have authority to contract and that the extent of their authority are important business issues. (2) The law of agency addresses these contractual authority issues. (3) The terms agent and principal . (4) The duties of the agent. B. Additional Matter for Discussion Figure 19.1 on page 568 and the three steps in an agency relationship. 19-1
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Chapter 19 - Agency and Employment Laws 2. Tort Liability A. Emphasize : (1) That tort liability is discussed in detail in Chapter 8. (2) The importance of an agent to act within his or her scope of employment in order to have the principal held liable for the agent’s torts. (3) Sidebar 19.1 "Pizza Delivery: Please Hold the Lawsuits." 3. Contractual Liability A. Emphasize : (1) The meaning and types of actual authority. a. Express authority arises from specific statements made by principal to agent. b. Implied authority arises from the carrying out of express authority. Often called incidental authority. c. Ratification occurs when a principal voluntarily honors an agreement. (2) That apparent authority arises when the principal does something that reasonably makes third parties believe that the agent has an actual authority which in fact is lacking. (3) That a common situation of apparent authority arises when an employer fails to notify company customers or suppliers that an agent-employee with whom they have dealt has been discharged. Emphasize the need to give notice to these parties. B. Cases for Discussion (1) Homeowners in a new sewer district brought an action against the sanitary district and its agent for breach of promise. The defendants claim that the agent had no authority to make a binding promise. Held: The agent may have had authority. The express authority given to an agent to do a certain thing carries with it the
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Chap019 - Chapter 19 - Agency and Employment Laws CHAPTER...

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