Common Law Rules in Employer-Employee Relations Chapter 14 Common Law Rules in Employer-Employee Relations

Employer-Employee Legal Classifications Master-servant relationship One person employs another in tasks not involving contracts Principal-agent relationship One person employs another to contract with third persons Employer-independent contractor relationship One person hires another and has no control over how the contractor performs the work

Effect of Employer-Employee Classifications Respondeat superior Nondelegable duties Consensual relations Gratuitous agent

Types of Agents General agent Del credere agent Special agent Has authority to act on another’s behalf in many different matters Del credere agent Sells goods for another on credit and guarantee that agent will pay if buyer does not Special agent Accomplishes particular tasks

How Agency Authority is Created Express authority Agreement in writing Implied authority Agreement by inference Apparent authority Agreement by conduct Ratification Agreement conferred retroactively

Common Law Duties Master-to-servant Provide safe work place Provide safe tools Reasonably pay servant

Common Law Duties Principal-to-agent Pay agent specified amount Advance money if the contract provides for it Reimburse ordinary expenses Indemnify agent for losses sustained while agent performs tasks Duty of care

Common Law Duties Agents-to-principals Duty to account Duty to use care and skill Duty to follow instructions Fiduciary duty

Agent or Servant Liability: Torts Indemnity Respondeat superior principal Scope of employment Distinction between where agent’s responsibilities end and duties begin can be difficult to ascertain

Agent Liability to Third Persons: Contracts Agents may be subjected to liability to third persons with respect to contracts in three ways: On the contract For the tort of fraud For breach of warranty of authority

Liability for Crimes Employee liability Employer liability Criminal conspiracy Corporate employers Respondeat superior Superior agent rule

How Agencies End Voluntary completion of the tasks for which agent was hired Death of principal or agent Insanity of principal or agent Bankruptcy of principal Physical incapacitation of agent Illegality of activities for which the agent was hired

Ending of Employment Relationship: Employment-at-Will Wrongful dismissal lawsuits in general Employee actions causing wrongful dismissal Legal limits on wrongful dismissal Notice of ending of agency

Recap – Terms to Know Employer-employee legal classifications Respondeat superior Nondelegable duties Consensual relations Gratuitous agent General, del credere, and special agent Express, implied, and apparent agency Indemnity Respondeat superior principal Employment-at-will