Employment RelationshipsEmployment Relationships

Should Germanwings/Lufthansa have to pay for the loss of life? Why? Why not?

Cruise Ship Doctors –

Facts: • Hit Head on Cruise. Janice Sullivan slipped and hit her head on a Royal Caribbean cruise celebrating her wedding anniversary.•Doctor Failed to Treat. The ship doctor, wearing a crew uniform, gave her over-the-counter pain medicine but did not scan or X-ray her despite pain over the next few days.•Serious Blood Clot. When she got home she went to the emergency room and discovered the truth. Issue: Is Royal Caribbean Liable for the doctors negligence?

Issue: Should Royal Caribbean have to pay for the doctor’s negligence? Royal Caribbean compares its practice to renting space.

Different Story - Mr. Goodwille. Pronounced dead by ship’s doctor.

Assuming medical malpractice (negligence), should Royal Caribbean pay?

“Course and Scope Employment”

Factors (p. 523) For Principal to Be Liable, Agent’s Act Factors (p. 523) For Principal to Be Liable, Agent’s Act must have occurred within the Course and Scope of must have occurred within the Course and Scope of Employment.Employment.

Employer Employer LiableLiable

Employer NOT Employer NOT LiableLiable

Was Employee’s act authorized by Employer?Was Employee’s act authorized by Employer? YesYes NoNo

The Time place and purpose of act (factually based)The Time place and purpose of act (factually based) ?? ??

Was act commonly performed by Employees?Was act commonly performed by Employees? YesYes NoNo

Did act advance Employer’s interests?Did act advance Employer’s interests? YesYes NoNo

Did Employer furnish instrumentality (tools)?Did Employer furnish instrumentality (tools)? YesYes NoNo

Did Employer have reason to know Employee would do the Did Employer have reason to know Employee would do the act? act?

YesYes NoNo

Did the act involve a serious crime?Did the act involve a serious crime? nono yesyes

Liability for Employee’s Intentional Torts and Crimes

Principal Liable – if Scope of Employment.– Principal liable for intentional torts committed with the scope of

employment.– 33Principal’s authorization of the tort

Employee also Liable. Employee is a tortfeasor as well. Employer Knew or Should Have Known. Employer is liable

for Employee’s acts which Employer knew or should have known the Employee had a propensity to commit.

Unauthorized Acts. Principal not liable for unauthorized acts outside of the agent’s scope of express or implied authority.

Crimes. General Rule: Agent is liable, Principal is not, unless:– Principal authorized or participated in crime.

Examples

Start Job Early. Steve hires Joey to mow lawns for his lawn mowing service and tells him not to start before 7:00 am. Joey starts at 6:00 am and injures someone. Did Joey act within the scope of employment.

Janitor Puts Glass Shards in Wall. Apartment manager hires a new janitor to maintain building and kids bother him. He boss tells him to let it go and he puts glass shards in the wall the kids climb over to get into the apartment complex in an attempt to keep them out. Did he act within scope of employment? The janitor singles out one kid and beats him up.

Was Employee’s act authorized by Employer?Was Employee’s act authorized by Employer?

The Time place and purpose of act (factually based)The Time place and purpose of act (factually based)

Was act commonly performed by Employees?Was act commonly performed by Employees?

Did act advance Employer’s interests?Did act advance Employer’s interests?

Did Employer furnish instrumentality (tools)?Did Employer furnish instrumentality (tools)?

Did Employer have reason to know Employee would Did Employer have reason to know Employee would do the act? do the act?

Did the act involve a serious crime?Did the act involve a serious crime?

Torts by Independent Contractors

As a general rule, an employer is not liable for the torts committed by the independent contractor. This rule is riddled with many exceptions, and these exceptions come in many forms, such as hazardous activities.

Have the exceptions become the rule? What policy interest is furthered by imposing

liability on employers for the torts of their independent contractors?

There are four ways in which an agency relationship can arise:

Agency Formation

By Agreement

By EstoppelBy Operation of

Law

By Ratification

Question 16-2, p. 563Coin sale by friend

Gett - Supposed Buyer

Wade– Gett’s “friend”

Brown – Coin Seller

Agency Relationships

Principal and Agent = Agency (most common legal relationship)

– Employee/Employer Relationship– Principal/Independent Contractor Relationship

Agent acts for principal. (Employee is an agent for the principal.)

Enables principal to operate in multiple locations.

Agency is a “fiduciary” relationship

Agent’s Duties to the Principal

Performance - The agent must use reasonable diligence and skill in performing his or her duties.

Notification - The agent is required to notify the principal of all matters that come to his or her attention concerning the subject matter of the agency.

Loyalty - The agent has a duty to act solely for the benefit of his or her principal and not in the interest of the agent or a third party.

Obedience - The agent must follow all lawful and clearly stated instructions of the principal.

Accounting - The agent has a duty to make available to the principal records of all property and money received and paid out on behalf of the principal.

Traveling sales rep with commission

Principal’s Duties to the Agent

Compensation - Except in a gratuitous agency relationship, the principal must pay the agreed-on value for an agent’s services.

Reimbursement and indemnification - This principal must reimburse the agent for all sums of money disbursed at the request of the principal and for all sums of money the agent disburses for necessary expenses in the course of reasonable performance of his or her agency duties.

Cooperation - A principal must cooperate with and assist an agent in performing his or her duties.

Safe working conditions - A principal must provide safe working conditions for the agent-employee.

Employment at Will

Exceptions– Contract – Public policy

Whistleblowing Asked to violate a law

– Implied Contract Employe Handbook Course of dealing

– Union– Discrimination (next unit)

– Tort (fraud)

Cab Driver Case

Start here Thursday beforetest

Employee vs. Independent Contractor Relationship

Factors Courts Consider:Factors Courts Consider: E’eeE’ee I.C.I.C.

CONTROL? CONTROL? Does the Employer exercise a great degree of control over Does the Employer exercise a great degree of control over

the details of the work?the details of the work?

YesYes NoNo

Same Line of Business? Same Line of Business? Is the worker engaged in an occupation or Is the worker engaged in an occupation or business distinct from Employer?business distinct from Employer?

NoNo YesYes

Supervised? Supervised? Is the work usually done under Employer’s supervision?Is the work usually done under Employer’s supervision? YesYes NoNo

Employer Tools? Employer Tools? Does Employer provide the tools?Does Employer provide the tools? YesYes NoNo

Long Term Employment? Long Term Employment? Has the worker been employed a long Has the worker been employed a long time?time?

YesYes NoNo

Paid at End? Paid at End? Is the worker paid at the end of the job?Is the worker paid at the end of the job? NoNo YesYes

Degree of Skill? Degree of Skill? Is there a great degree of skill required?Is there a great degree of skill required? NoNo YesYes

Control Key

Factor

What are some other What are some other advantages of being an advantages of being an independent contractor? independent contractor? What might be some What might be some disadvantages?disadvantages?

STUDENT PRESENTATION: End-of-Chapter Q: 16-3 Hemmerling is a cab driver for Happy Cab, Inc. Hemmerling paid certain fixed expenses and abided by a variety of rules as to the use of the cab, including: the hours worked and the solicitation of fares. Happy Cab did not withhold taxes from Hemmerling’s pay. While driving the cab, Hemmerling was injured. Can he collect workers’ compensation?

Employer

EmployeeIndependentContractor

Facts: Facts: •Graham Sells “freeware” Software. Graham Sells “freeware” Software. Richard Graham marketed CD-ROM disks Richard Graham marketed CD-ROM disks containing compilations of shareware, freeware, and public domain software. containing compilations of shareware, freeware, and public domain software. •James wrote a software program for Graham. James wrote a software program for Graham. Larry James agreed to create a Larry James agreed to create a program for him in exchange for credit on the final product. James built into the program program for him in exchange for credit on the final product. James built into the program a notice attributing authorship and copyright to himself. a notice attributing authorship and copyright to himself. •James wanted credit - Graham removed the noticeJames wanted credit - Graham removed the notice claiming that the program was a claiming that the program was a work for hire and the copyright was his. work for hire and the copyright was his. •James sold the program to another CD-ROM publisher. James sold the program to another CD-ROM publisher.

Issue: Issue: Graham filed a suit against James, alleging copyright infringement. WHO Graham filed a suit against James, alleging copyright infringement. WHO SHOULD WIN?SHOULD WIN?

© Larry James

Employee v. Independent Contractor – Ownership of Intellectual Property

Child Labor

Under age 14 not allowed to do certain types of work

14-15 allowed to work but not in hazardous occupations - hour restrictions

16-18 not hazardous

Private Pension Plans

Vesting Trustee ERISA

Immigration

Employer ask for I-9 form

Trollinger v. Tyson Foods, Inc. Case 17.3, p. 588.

•Tyson did get I-9 Forms•Had previously hired same people but under different name•Hired people that looked to young to match information•Gives more time to get “good” documents

•What if Tyson employees had acted on their own in violation of Tyson’s written policies? •What if Tyson got really strict and forced additional information from anyone that looked “foreign”?

Davis Bacon and Fair Labor Standards Act

Exempt Employees– executives– administrative– professional– outside salesperson

Criteria.– Pay - White Collar – More than $100,000/year (if paid less than $23,600

non-exempt)– Duties – exempt if supervise two or more employees, management is

primary duty, or has some genuine input into the status of other employees.

Non-Exempt– Time and 1/2 for over 40 hours– Minimum Wage

Mims. V. Starbucks Corp. •Manager motivates 6-30 baristas and others•Oversees customer service and processes employee records, payrolls and inventory control.•Develops strategies to increase revenues, control costs, and comply with corporate policies.•Kevin Keevican was a manager.•Kevin doubled pastry sales at one store and tripled revenue at another and won awards at both.•Kevin was paid $650-$800/week plus a 10-20% bonus, plus fringe benefits that baristas did not get. ($9.20-$11.40/hour because he worked 70 hours a week).•Kevin resigned and sued for overtime pay. Kevin said he spent up to 70-80% of his time doing basic barista chores.

Health and Safety

OSHA– 11 or more employees must keep records

Workers Compensation - bar to suit - admin. Agency decides and generally pays

Social Security, Medicare and Unemployment Insurance

OASDI (DI = Disability Insurance)– 2015 = $118,500

Unemployment Cobra Family and Medical Leave Act

– The FMLA requires employers with over 50 employees to provide unpaid leave to employees who need to care for a spouse, child, or parent suffering with a serious medical condition.

– The employee cannot be terminated for taking leave under the policy, and has the right to restoration to the same or a similar position upon return to work.

Health Care Reform

Mandate for employers to buy health insurance or pay penalty - 2014

Employee Privacy Rights

E-mail. Privacy Expectations and Email systems Lie Detector Tests. Prohibited, except under the ongoing investigation

exception. Drug Testing. Most government employees are subject to testing and the

rights of private employees vary from state to state. (Williams Wall Case – MN Law had more protections for employees against drug testing but NFL requires tests)

AIDS Testing. Some state statutes restrict AIDS testing. Electronic Performance Surveillance. Most limitations can be avoided if the

employer informs employees that surveillance will occur. Genetic Testing. Genetic Information Nondiscrimination Act

Union – Labor Relations Laws

Heavily Regulated/Many Rules Card Check Collective Bargaining Statistics – 2012 Department of Labor

– 11.3% of US working population are in a union – 35.9% of public sector or 7.3 million public employees– 6.6% of private sector or 7.0 million private employees

Employment RelationshipsEmployment Relationships

Should the We Fest be liable for an employee’s crime?What factors would you consider? Why?