Legal Environment of Business

Dr. John Dehrer-Wendt

Agency Notes


1. Definition -- "Standing in Your Shoes"

2. History

3. Master/Servant vs. Independent Contractor

a.  Benefits/Detriments

b.  IRS and Minnesota Tests

1. Internal Revenue Service: Independent Contractor or Employee

2. Minnesota Department of Revenue: Employee or Independent Contractor

3. Minnesota Department of Labor and Industry Pamphlet: Independent Contractor or Employee?

4. Independent Contractor Report.

4. Scope of Agency Questions

A.  Basically, only three issues to remember (Hooray!)

1.      When is the Principal or Agent liable on the contract?

a.      Disclosed Principal

b.      Undisclosed Principal

c.     Partially Disclosed

d.      Unauthorized Acts of Agent

 2.      When is the Principal liable on the torts of an Agent?

a.      Scope of Employment

b.      Respondeat Superior

c.      S _______ & F _________

3.      What duties do the Principal and Agent owe to each other?

a.      Fiduciary Relationship

b.      Agent

1.    Secret Profits

2.    Personal Interest

3.    Competing

4.    Conflict of Interest

5.    Commingling

c. Principal

1.    Perform

2.    Indemnify for Losses

3.    Compensate

4.    At Will Employment --basically, either party may terminate the employment relationship at anytime, for any reason, including a bad, good, or no reason at all. Until the 1960s, there were no exceptions to the emplyment at will rule because of the notion that the employment relationship was a two-way street (employee could end the relationship at anytime)

a.  Exceptions

  1. Whistleblowing
  2. Title 7: prohibits discrimination in  employment on account of race, color, religion, sex, and national origin.
  3. The Age Discrimination in Employment Act of 1976 (ADEA)
  4. The Rehabilitation Act of 1973: contains certain affirmative action requirements for federal contractors and prohibits discriminating against person with a disability.
  5. The Americans with Disabilities Act (ADA): prohibits discrimination based on qualified individuals with a disability.
  6. Fair Labor Standards Act: Regulations for minimum wage standards, time and a half for overtime, regulates child labor, and more.
  7. Wages and Equal Pay Act: Equal pay for equal work.
  8. Family Medical Leave Act: protection for workers for attendance issues.
  9. Employee Handbook  (Sletten v. Turnquist)

b.  Other Issues -- Drug Testing

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Index on Class Notes