Chapter 14--Agency
Actual v. ApparentActual v. ApparentExpress v. ImpliedExpress v. Implied
Employees/Independent ContractorsEmployees/Independent Contractors
Agent’s AuthorityAgent’s Authority
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Degreeof
Control
Employee or Independent Contractor?
• Why is this important to determine the difference?– “Vicarious Liability” as to employer if employee does
something wrong.– Rights attach to employees and violating law could
result in penalties to employer.
• How can we determine the difference?– Case-by-case basis but we take in consideration 20
factors...
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20 Part I.R.S. “Test”--only a tool• Instructions• Training• Integration• Services Rendered Personally• Hiring, Supervising & Paying
Assistants• Continuing Relationship• Set Hours of Work• Full Time Required• Doing Work on the Employer’s
Premises• Order or Sequenced Set
• Oral or Written Reports
• Furnishing Tools & Materials
• Payment by Hour, Week or Month
• Payment of Business/Travel Expenses
• Significant Investment
• Realization of Profit/Loss
• Working for more then one firm at a time
• Making Service available to general public
• Right to Discharge
• Right to Terminate
Agent’s DutiesAgent’s DutiesObey Obey InstructionsInstructions
LoyaltyLoyaltyConflict of InterestConflict of InterestConfidentialityConfidentiality
Duties of Agent/PrincipalDuties of Agent/Principal
Principal’s Principal’s Duy:Duy:
Compensate Compensate Agent;Agent;
Indemnify Indemnify Agent Agent (reimburse)(reimburse)
Respondeat Superior- Respondeat Superior- Agent:Agent:EmployeeEmployeeWithin Scope Within Scope of Employmentof Employment
Direct LiabilityDirect LiabilityIndependent ContractorsIndependent ContractorsAgent MisrepresentationsAgent Misrepresentations
Tort Liability- PrincipalTort Liability- Principal
Act of PartiesAct of PartiesOperation of LawOperation of LawAgency Powers GivenAgency Powers Given As SecurityAs SecurityEffect on Agent’s Authority- Effect on Agent’s Authority-
NoticeNotice
Agency TerminationAgency Termination
Employer’s Liability:
Employers can find themselves liable for the negligence of their employees and for their own negligence in hiring, retaining & supervising their employees.
Respondeat Superior (let the master respond)
Why go after anEmployer? Is theEmployee releasedfrom liability forher/his actions?
Justification?
Employee orIndependent Contractor?
Employee: The employer has a greater “control” over the person, pays payroll taxes, offers insurance benefits, & instructs on how to undertake the assignment with a greater degree of participation.
Independent Contractor: The employer has less “control” over the person, unlikely that payroll taxes are taken out, has less involvement/participation in the completion of a job.
Respondeat Superior applies to Employer/Employees and not independent contractors
Respondeat Superior applies if:
1) The employee was subject to the employer’s supervision.
2) The employee was motivated (at least in part) by a desire to serve the employer’s interests.
3) The problem arose substantially within normal working hours and in a work location.
4) The act in question was of the general type the employee was hired to perform.
JUDGE JUDY READY TO RULE----
Case: Carroll Air Systems v. Greenbaum--- Employer sued after deathcaused by drunk driving of employee going home from a convention.Employer argued no “vicarious liability”….. Plaintiff disagrees…...
Now its time to pay the piper. You play…you pay
Employee w/n scope ofemployment therefore
employer is liable
Employer’s Negligence:
An employer is negligent in the hiring and/or retention of an employeewhom they know (or should have known)is likely to commit harm
to others or for careless
training or supervision. As an x-employer shouldyou give a reference? What are liabilities?
Official Language Clause