Employment Relations Issues Chapter 4

TERMS Liquidated damages Punitive damages Compensatory damages Rescission Restitution Promissory Estoppel Actual Authority Apparent Authority Reassignment Clause Restrictive Covenant Moral Clause WHISTLE-BLOWING Employment at Will Defamation Negligent misrepresentation- Tortious interference with contractual relations- TERMS

WHO SIDE ARE YOU ON?

Management Contexts, Relevant Laws, and Cases

Basic Principles of How Interpret Contract Are called: Canons of interpretation: 1. As an integrated whole- in a way that makes sense as a whole. Courts read sections to see if cohesion through the document. They read the clauses of the document to see if they are tied in. The document should reflect agreement in all its parts. 2. The courts interpret a contract most strictly against the party that drafted the document in the event of ambiguity. Perspective: when you negotiate or draft a document use the worst case scenario.

Fundamental Aspects of a Contract A contract is a promise, or set of promises. There are (4) aspect of a contract: Agreement-offer and acceptance Consideration-exchange of value Capacity-legal competence of parties to enter a contractual agreement. Legality-to be enforceable, it must not violate laws.

Oral vs. Written Contracts Good managerial practice: Put every contract in writing. Under certain circumstances, courts will not enforce oral contracts. Statutes of Frauds—states require some types of contracts to be in writing. agreement for sale of land 2. Contract for sale of goods ($500 or more) 3. Contracts that cannot be performed within one year of contract.

Contract Damages for Breach of Contract: the courts doesn’t punish the party that breach but try to compensate the innocent party to the promise of the contract. Compensatory damages- direct loss Liquidated damages provision-have an approximate damages p.68 Penalty provision-must be reasonable Courts will not uphold penalty provision in a contract. Punitive damages- compensation in excess Rescission-undoing the contract, p.55 Restitution-returning the goods or property, p.56 Promissory estoppel-need (3) elements p.56 (78) 1. an expected promise induce reliance 2. Reliance on that promise 3. detriment occurs when promise doesn’t occurs

NOTES TO TURN IN TODAY!

BARGINING POWER

Disparity of Bargaining Power A contract is written exclusively by one party; the other party is forced to accept terms. No bargaining. Example: National Letter of Intent between an institution and a student-athlete (who cannot negotiate content). Refer to page 56-57

NATIONAL LETTER OF INTENT

Authority to Contract Actual authority – In agency law, the principal conveys to the agent what his or limits of authority may be. Apparent authority – An instance when the principal has somehow conveyed to a third party that the agent has authority to act although he or she does not have actual authority. Focus Case- p.58

Strategies Contract Law Use the worst case scenario when developing contracts. Make sure contracts serve the interests of your organization. Put all contracts in writing. Avoid making promises that go beyond what the written agreement conveys. Enforce the limits of actual authority.

Employee Contract Provisions Duties and responsibilities Reassignment Clause- (Focus Case p.60) Compensation (Focus Case p. 62) Terms of employment Clauses related to termination Restrictive covenant/covenant not to compete- restrict persons from working with competitor. (p.69) Miscellaneous provisions Employee Contract Provisions

Clauses Related to Termination Termination for just cause: Morals clause: (p. 64) Behavior that has an adverse effect on an individual or organization’s image Termination without cause: Wrongful termination- someone has been fired contrary to terms of contract. Clauses Related to Termination

Employment at Will Employer may fire an employee at any time, for any reason (or for no reason). Employee can quit at any time, for any reason. In practice, the rule favors employers more than employees. Refer to page (71) Frazier v. University of the District of Columbia

Exceptions to Employment at Will Based on contract law: Implied contracts Covenant of good faith and fair dealing Based on public policy: Employment discrimination Whistleblowing (p. 73) Cooperation in an investigation against the company Submission of unfair labor practice charges Complaints about safety hazards/violations

WHISTLEBLOWING Summary of Facts: I. There are 4 areas of whistleblowing areas- A. Health & Safety B. Danger to the Environment C. Criminal Activity D. Breaking Law II. Check policy and procedures of your organization. III. Must report to the right person- A. Made in public B. To be true C. Disclosure to the right person

HEAD COACHES AND CONTRACTS

Tort Theories and Employment Defamation- tort that protects one’s reputation Qualified privilege-in good faith employers can disclose information of employee’s work performance. Negligent misrepresentation- information resulting in harm Fraud-induce action by another that leads to harm Tortious interference with contractual relations- prohibit improper interference with existing contracts. Tort Theories and Employment

HEAD COACHES AND CONTRACTS

REVIEW OF CASES

b. The worst case scenario c. The best case scenario 1. Whenever you begin to draft a contract or start a negotiation, you should take the perspective of which of the following? a. The integrated whole b. The worst case scenario c. The best case scenario d. Enhancing ambiguity 2. The formation of a contract has which of these four fundamental aspects?  a. Offer, consideration, capacity, and authority b. Acceptance, capacity, authority, and integration c. Offer, rescission, authority, and capacity d. Agreement, consideration, capacity, and legality   3. In a coaching contract, a coach may often be compensated beyond base salary with additional benefits. This added compensation is known as __________. a. Perquisites (perks) b. Liquidated damages c. Just cause compensation 4. Which of the following is the practice in which employment has no specified duration and the employer may fire the employee at any time, for any reason or for no reason? a. An illegal employment practice b. Employment at will c. Inequitable employment d. Employment ambiguity Chapter Questions

5.  Many states have passed __________ providing that employees who report illegal activities allegedly committed by their employer shall not be subject to discrimination or retaliation by the employer. a. Good faith and fair dealing statutes b. Non-reassignment statutes c. Restrictive covenant statutes d. Whistleblower statutes 6. Which of the following prohibits improper interference with existing contracts? a.Tortious interference with contractual relations misrepresentation contractual freedom

TRUE OR FALSE: ____7. Promissory estoppel needs only one element in place. ____8. In a breach of contract case, rescission means undoing the contract. ____9. In a breach of contract case, restitution means returning the goods or property. ____10. Punitive damages means compensation in excess beyond the actual loss.

ANSWERS 1.B 2.D 3.A 4.B 5.D 6.A 7.F 8.T 9.T 10.T