May 6th Notes

Business Law
May 6, 2010

NEWS
-review questions from the book for the final
-essay questions
-----------------------------------------------

What is an agency?
Agency is the fiduciary relationship that arises when one person (the “principal”) manifests assent to another person (the “agent”) that the agent
Shall act on the principal's behalf
Subject to the principal's control

And the agent manifests assent or otherwise consents so to act. 

Restatement (Third) of Agency § 1.01

Agency Relationship
There must be
A principal
An agent
Consent of the principal to have the agent act on its behalf
Consent of the agent to act on behalf of the principal
Control by the principal of agent’s actions
Fiduciary relationship

Result of Relationship
A business will be responsible for the debts incurred, decisions made, contracts formed, as well as the tortious acts of its agents.

A person or entity dealing with the agent is dealing with the principal.

Agent’s Fiduciary Duty
Agent owes a fiduciary duty to the principal – to act in the best interest of the principal.
Competent performance
Notice of important information
Loyalty and accountability

Agent who fails to act in the principal’s interests is liable for resulting damages.

Additional Duties
The agent has a duty
To obey instructions of the principal
To act with reasonable care
To provide information that the principal should or would want to know

Principal’s Duties
The principal must
Cooperate with the agent and
Compensate the agent for services rendered
Indemnify agent for expenses, liability
Liability for Contracts
A principal is bound by the contracts of the agent, if
The agent has authority (express, implied, apparent) to act on the principal’s behalf
The principal ratifies or accepts the benefit of the transaction or
A court finds the principal should be estopped from denying the agent’s authority

Liability for Contracts
An agent is liable on a contract only if
The principal’s existence is disclosed, but his identity is not or
Neither the existence nor identity of the principal is disclosed

The principal is always liable on the contract, if the agent has authority to make it.

Employment Setting
An employer, as a principal, is responsible for – and liable for – the acts and omissions (negligence) of an employee.

This is based on the concept that the employee is acting on the employer’s behalf – the employee is acting as the employer’s agent.

Who is an Employee?
Individuals who work for businesses may be
Employees or
Independent contractors

Employee
Usually hired for a specific wage paid periodically – rather than when a job is done.
Employer pays social security, benefits, income tax, unemployment compensation and workers compensation contributions.
Employer maintains control over the task and how it will be accomplished.

Independent Contractor
Contracts to perform a specific service for a set fee (project or hourly). 
Responsible for own social security, taxes, benefits, tools.
Hired to do a job – but the contractor determines how to get the job done.

Respondeat Superior
The doctrine of respondeat superior holds a business liable for the tortious acts of a worker if:
The worker was an employee
The worker’s tortious act caused injury
The worker was acting within the scope of employment at the time of the injury


Employment Law

 Employee rights
 Employee actions for:
 Compensatory damages
 Injunctive relief

Basic Employee Rights
Minimum wage
Safety protections
Special protections for minors
Right to organize and collectively bargain

Employment at Will
Generally either an employee or an employer can terminate the employment – without any reason.
An exception is that an employer may not terminate employment if it would violate a contractual right, a statutory right, or public policy.

http://www.tvw.org/media/mediaplayer.cfm?evid=1998120085&TYPE=V&CFID=7132350&CFTOKEN=53809485&bhcp=1

Loomis Case with Gardner
-diversity of jurisdiction


Fair Labor Standards Act
Fair Labor Standards Act (FLSA) establishes certain minimum requirements for wages, hours of work, premium overtime, and payroll records.
FLSA identifies two types of employees: non-exempt employees and exempt employees.
Washington’s counterpart is the state Minimum Wage Act.

Equal Pay Act
The federal Equal Pay Act protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination

Workers Compensation
Washington law provides a statutory (rather than a common law) remedy for workers who are injured on the job.  RCW title 51.

Family Leave Acts
Both federal and state laws provide employees the right to time off to care for newborn or sick children or sick family members.

Discrimination
Federal law, Title VII of the Civil Rights Act, prohibits discrimination based on
Race, color, national origin
Sex
Religion

EEOC Complaints for 2009
Total of 93,277 charges against private sector employers, down slightly from 2008’s record high

 33,579 charges based on race
 28,0283 on sex
 33.613 on retaliation
 21,451 on disability
 22,778 on  age
 8,327 on national origin
 3,386 on religion
 942 – Equal Pay Act

Discrimination
Washington law prohibits discrimination based on
Age
Religion
Sex, sexual orientation, marital status
Race, color, national origin
Presence of any sensory, mental or physical disability or the use of a trained dog guide or service animal by a disabled person.

Interpretation of the Law
Even though Washington’s law against discrimination pre-dates the federal law, Washington has relied on federal case law in interpreting its own law against discrimination.
Washington has also relied heavily on the interpretation given its law by the State Human Rights Commission.

What Law Applies?
Considerations in using state law or federal law
What remedies are available?
Is administrative action a prerequisite to suit?
Defenses?

Who is an “Employer”?
Under Washington law “employer” is any person who employs 8 or more employees (with some exceptions).  Under federal law an employer must have 15 employees to be subject to the law.
The limitation on protection (based on number of employees) is not a violation of equal protection.
Griffin v. Eller, 130 Wn.2d 58 (1996)

Prima Facie Case
Employee must show by a preponderance of evidence
The employee is a member of a protected class
The employee is qualified for the job
Adverse action by employer (denied employment, promotion; fired, demoted)
Someone who is not in the class was hired to fill Plaintiff-employee’s spot

Employer’s Burden
The employer then has the right to present evidence showing that the reason for the adverse action was a legitimate non-discriminatory reason

Ultimate Burden
The burden then shifts back to the employee to prove that the reason advanced by the employer is a pretext for discriminating against the employee. 
Employee has the ultimate burden of proof for showing discrimination has occurred.

Age Discrimination
  “In the face of rising productivity and affluence, older workers find themselves disadvantaged in their efforts to retain employment, and especially to regain employment when displaced from jobs”
US Congress 1967 40+

Washington Law
RCW 49.44.090 makes it unlawful for an employer to discriminate in the terms and conditions of employment against an employee or applicant for employment because the employee is 40 years old or older.

BFOQ
A defense to an employee’s claim of overt discrimination is that the presence or absence of a particular characteristic is a necessary qualification for the job.
The qualification must be reasonably necessary to the business operation

Disparate Treatment
Occurs when an individual believes he or she is being directly and intentionally discriminated against on the basis of race, sex, national origin, disability, age, or marital status.

Disparate Impact
Occurs when a facially neutral employment practice or policy deprives an employee of employment opportunities because the practice or policy has a disproportionate impact on a protected class of individuals to which the plaintiff belongs.

Sexual Harassment
Quid pro quo
Hostile work environment

Quid Pro Quo Harassment
Any unwelcome sexual advance, request for sexual favors, or other verbal or physical conduct of a sexual nature when any one of three criteria is met:
Submission to sexual conduct is made (explicitly or implicitly) a term or condition of employment.
Submission to or rejection of the sexual conduct is the basis for employment decisions.

Hostile Work Environment
Employee must establish
Offensive, unwelcome contact that
Occurred because of sex, gender or disability
Affected the terms or conditions of employment
Can be imputed to employer
Casual, isolated, trivial manifestations of a discriminatory environment do not affect the employment sufficiently to violate the law.

Hostile Workplace
Sexual/Disability harassment can be in the form of
Verbal behavior (unwanted sexual comments, suggestions, jokes, requests for sexual favors)
Non-verbal behavior (gestures, leering, pictures, cartoons)
Physical behavior (assault, molestation, touching, repeated brushing against a person's body)

Disability Discrimination
RCW 49.60, prohibits discrimination on the basis of a disability, or perceived disability.
The federal Rehabilitation Act prohibits discrimination based on disability by federal agencies and agencies receiving federal funds.
The federal Americans with Disabilities Act (ADA) prohibits discrimination in employment and in the delivery of public services.

Washington Law
RCW 49.60.180 – It is an unfair practice for any employer to discriminate in the terms and conditions of employment because a person has a sensory, mental or physical disability or uses a service animal unless based on a bona fide occupational qualification.

American Disabilities Act
Federal counterpart to RCW 49.60. 
Enacted July 26, 1990
The ADA prohibits discrimination and ensures equal opportunity for persons with disabilities
in employment
state and local government services
public accommodations
commercial facilities
transportation.

Reasonable Accommodation
Employers have a duty to reasonably accommodate the disabilities of applicants and employees.
When does the duty arise?
What is reasonable? What isn’t?
What is a bona fide occupational qualification for purposes of disability discrimination?

What is a disability?
Under federal law:
(1) a physical or mental impairment that substantially limits one or more of his major life activities,
(2) a record of such an impairment, or
(3) is regarded as having such an impairment

Under state law:
(1) a sensory, mental, or physical impairment that
       (a) is medically diagnosable;
       (b) exists as a record or history; or
       (c) is perceived to exist whether or not it exists in fact.

Rehabilitation Act
The federal Rehabilitation Act of 1973 prohibits discrimination against qualified individuals with disabilities who work in the federal government, or for agencies receiving federal funds, and provides monetary damages in cases of intentional employment discrimination.