2. Chapter 14--Agency

3. Actual v. Apparent Actual v. Apparent Express v. Implied Express v. Implied Employees/Independent Contractors Agent’s Authority

4. 3 Degree of 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...

5. 4 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

6. Agent’s Duties Agent’s Duties Obey Instructions Obey Instructions Loyalty Loyalty Conflict of Interest Conflict of Interest Confidentiality Confidentiality Duties of Agent/Principal Principal’s Duy: Principal’s Duy: Compensate Agent; Compensate Agent; Indemnify Agent (reimburse) Indemnify Agent (reimburse)

7. Respondeat Superior- Agent: Respondeat Superior- Agent: Employee Employee Within Scope Within Scope of Employment of Employment Direct Liability Direct Liability Independent Contractors Independent Contractors Agent Misrepresentations Agent Misrepresentations Tort Liability- Principal

8. Act of Parties Act of Parties Operation of Law Operation of Law Agency Powers Given Agency Powers Given As Security As Security Effect on Agent’s Authority- Notice Effect on Agent’s Authority- Notice Agency Termination

9. Employer’s Liability: n Employers can find themselves liable for the negligence of their employees and for their own negligence in hiring, retaining & supervising their employees. n Respondeat Superior (let the master respond) Why go after an Employer? Is the Employee released from liability for her/his actions? Justification?

10. Employee or Independent Contractor? n 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. n Independent Contractor: The employer has less “control” over the person, unlikely that payroll taxes are taken out, has less involvement/participat ion in the completion of a job. Respondeat Superior applies to Employer/ Employees and not independent contractors

11. Respondeat Superior applies if: n 1)The employee was subject to the employer’s supervision. n 2) The employee was motivated (at least in part) by a desire to serve the employer’s interests. n 3)The problem arose substantially within normal working hours and in a work location. n 4)The act in question was of the general type the employee was hired to perform.

12. JUDGE JUDY READY TO RULE---- Case: Carroll Air Systems v. Greenbaum--- Employer sued after death caused 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 of employment therefore employer is liable

13. Employer’s Negligence: An employer is negligent in the hiring and/or retention of an employee whom they know (or should have known)is likely to commit harm to others or for careless training or supervision. As an x-employer should you give a reference? What are liabilities?

14. Official Language Clause