1. Employment Relations Issues
Chapter 4

2. TERMS Actual Authority Re-assignment clause Apparent Authority
Termination for just cause Termination without cause
Breach of Contract Restrictive covenant/Covenant not to compete
Canons of Interpretation of Contract Law Employment at will
Formation of a Contract Tort theories and Employment
Contract
Compensatory damages
Mitigation of damages
Liquidated damages and penalty provision
Rescission
Restitution
Promissory estoppel

3. WHO SIDE ARE YOU ON?

4. Management Contexts, Relevant Laws, and Cases

5. 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.

6. 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.

7. 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.

8. 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.
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
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.

9. NOTES TO TURN IN TODAY!

10. BARGINING POWER

11. 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

12. 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

13. 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.

14. 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

15. 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

16. 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

17. 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

18. HEAD COACHES AND CONTRACTS

19. HEAD COACHES AND CONTRACTS

20. 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

21. THE COACHING ARENA

22. 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
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?
Tortious interference with contractual relations
Misrepresentation
Contractual freedom
Chapter Questions

23. 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 B
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 D
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 A
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 B
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 D
6. Which of the following prohibits improper interference with existing contracts?
Tortious interference with contractual relations
Misrepresentation
Contractual freedom A