1. C HAPTER 15 – A GENCY

2. T YPES OF E MPLOYMENT R ELATIONSHIPS Employers hire individuals (or other firms) to allow the employer to accomplish its mission The primary hiring relationships utilized by an employer include Principal/agent Employer/employee Employer/independent contractor 2 Jeffrey Pittman - Legal Environment of Business

3. T YPES OF E MPLOYMENT R ELATIONSHIPS An individual may fit into more than one hiring category For example, an employer could hire one individual as an agent, an employee, and an independent contractor 3 Jeffrey Pittman - Legal Environment of Business

4. A N A GENT Agent – A person authorized by another (the principal) to represent and act for the principal; one authorized to transact business for a principal 4 Jeffrey Pittman - Legal Environment of Business

5. A N E MPLOYEE Employee – A person in the service of an employer, where the employer has the power to control and direct the employee in the details of how the work is to be done An employee does not represent an employer 5 Jeffrey Pittman - Legal Environment of Business

6. A N I NDEPENDENT C ONTRACTOR Independent Contractor – A person who contracts to do a piece of work according to the independent contractor’s own methods, subject to the employer’s control only as to the end product or final result of the work An independent contractor does not represent an employer 6 Jeffrey Pittman - Legal Environment of Business

7. E MPLOYEE & I NDEPENDENT C ONTRACTOR F ORMATION Generally, the employer/employee and the employer/independent contractor relationships is formed by Agreement (contract) 7 Jeffrey Pittman - Legal Environment of Business

8. E MPLOYER L IABILITY FOR C ONTRACTS The employer is liable for contracts entered into by a gents, if the agents have actual or apparent authority, or if the employer ratifies the contract Actual authority includes express authority (exact wording when agent hired) and implied authority (inferred from express authority) 8 Jeffrey Pittman - Legal Environment of Business

9. E MPLOYER L IABILITY FOR C ONTRACTS The employer is not liable for contracts entered into by employees or independent contractors, unless the employer ratifies the contracts 9 Jeffrey Pittman - Legal Environment of Business

10. D UTIES OF A GENTS TO P RINCIPALS An agent is a fiduciary for the principal and is obligated under the following duties to the principal Performance of duties in the contract Loyalty Obedience Accounting Notification 10 Jeffrey Pittman - Legal Environment of Business

11. D UTIES OF P RINCIPALS TO A GENTS The principal is obligated under the following contractual duties to the agent Duty of compensation Duty of reimbursement Duty of cooperation Duty to provide safe working conditions 11 Jeffrey Pittman - Legal Environment of Business

12. E MPLOYER L IABILITY FOR T ORTS An employer is generally not liable for the torts of independent contractors 12 Jeffrey Pittman - Legal Environment of Business

13. E NDING THE E MPLOYMENT R ELATIONSHIP (C HAPTER 20) Employment at will (EAW) EAW is a doctrine which provides that a contract of employment for an indefinite term is terminable at the will of either party Under EAW, an at ‑ will employee may be discharged for good cause, no cause, or even a morally wrong cause 13 Jeffrey Pittman - Legal Environment of Business

14. E NDING THE E MPLOYMENT R ELATIONSHIP (C HAPTER 21) Exceptions to employment at will Federal civil rights laws, for example, protections against discharge based on age, race, gender, disability, religion, national origin, or color State laws that protect against discharge that breaches a contractual promise of employment, or discharge that violates public policy 14 Jeffrey Pittman - Legal Environment of Business