Agency/Employment Relations I

Summary

This review delves into the intricacies of agency and employment relationships, distinguishing between employees and independent contractors. It explores the concept of agency as a fiduciary relationship, emphasizing the employer's liability for an employee's actions within the scope of employment. The script also outlines the responsibilities and duties of both agents and principals, including performance, loyalty, and accounting. It touches on the termination of agency relationships and the evolution of employment laws, including at-will employment and the impact of statutes like the Civil Rights Act of 1964, highlighting the importance of understanding these dynamics in the workplace.

Takeaways

• 😀 An agency relationship is a fiduciary relationship where one party (agent) acts on behalf of another (principal).
• 👔 The employer-employee relationship is an example of an agency relationship where the employer controls the working conditions and methods of the employee.
• 🏢 Employers are vicariously liable for the actions of their employees if those actions are within the course and scope of employment.
• 🛠️ Independent contractors are hired for specific jobs and are not controlled by the principal regarding the methods of work; they are responsible for their own taxes.
• 🔍 The IRS and courts assess different factors to determine if a worker is an employee or an independent contractor, such as the degree of control and the provision of tools.
• 📜 An agency agreement can be formed through written, oral agreements, or implied by conduct, and can be terminated by various means including completion of purpose, mutual agreement, or operation of law.
• 📝 Agents have duties of performance, notification, loyalty, obedience, and accounting to their principals, while principals have duties of compensation, reimbursement, indemnification, cooperation, and providing safe working conditions.
• 🚫 The principle of respondeat superior holds employers liable for torts committed by employees within the scope of their employment, except when the employee is on a 'frolic or jaunt'.
• 🏥 Employment at-will means that an employer can terminate an employee for any reason, unless restricted by contract or public policy, such as anti-discrimination laws.
• 📚 Various employment laws such as the Fair Labor Standards Act, OSHA, and the Family and Medical Leave Act provide protections and standards for employees in the workplace.

Q & A

What is an agency relationship?

An agency relationship is a fiduciary relationship where one party, the agent, agrees to represent or act on behalf of another party, known as the principal.

How does an employer-employee relationship fit into the concept of agency?

An employer-employee relationship is an example of an agency relationship where the employee acts as the agent and the employer is the principal, controlling the working conditions and methods.

What is the meaning of 'vicarious liability' in the context of employment?

Vicarious liability refers to the legal responsibility of an employer for the actions of their employees, provided the employee is acting within the course and scope of their employment.

What is an independent contractor and how does it differ from an employee?

An independent contractor is a self-employed individual hired for a specific job, often paid once for the project, and not under the control of the principal regarding work methods. They are not considered employees and usually handle their own taxes.

How does the IRS determine whether a worker is an employee or an independent contractor?

The IRS assesses the degree of control the principal exercises over the details of the work of the agent, focusing on the amount of direction and control.

What factors does a court consider to differentiate between an employee and an independent contractor?

A court looks at factors such as who supplies the tools, the degree of skill required, the duration of employment, and the method of payment to determine if someone is an employee or an independent contractor.

What are the different ways an agency agreement can be formed?

An agency agreement can be formed through a written or oral agreement, implied by a contract, through parental authority, by operation of law, or by ratification.

What are the duties of an agent to their principal?

An agent owes duties of performance, notification, loyalty, obedience, and accounting to their principal, ensuring they act in the best interest of the principal and account for all money and property.

What are the principal's duties to their agents?

The principal has duties to compensate the agent, reimburse for expenses, indemnify for liabilities incurred while acting on the principal's behalf, cooperate without interference, and provide safe working conditions.

Under what circumstances is a principal liable for an agent's contracts?

A principal is liable for an agent's contracts if the agency is disclosed, meaning it is clear to all parties that the agent is acting on behalf of the principal.

What is the principle of respondeat superior and how does it apply to employment?

Respondeat superior is the legal doctrine that makes an employer liable for torts committed by employees while acting within the scope of their employment. It does not apply if the employee is on a 'frolic or detour,' meaning acting outside the course of employment.

How can an agency relationship be terminated?

An agency relationship can be terminated by the achievement of the purpose, occurrence of an event, mutual agreement, revocation, operation of law (such as death or insanity of the principal or agent), impossibility, material change of circumstances, bankruptcy, or war.

What is employment at-will and how has it changed over time?

Employment at-will is a common law doctrine where an employer can terminate an employee for any reason, or no reason at all. However, this has been modified by various statutes and laws against discrimination, contract theories, and public policies.