As a small-business owner, you are faced with rising costs, particularly employment costs, insurance, and the like. You decide to hire Leo, your good friend to save on these costs and insurance. Leo works for 6 months and wears the business shirt, deals with vendors and customers on the phone, and tells his family that he is the company’s best employee. One day at lunch, Leo heads to 7-11 for a Slurpee and befriends the owner, Dan. Leo makes a deal with Dan to sell your product, Widgets spinners, at the 7-11 in exchange for a free Slurpee every day. The store sells out of Widgets spinners the next day and Dan calls to demand you restock because it is bringing in lots of customers.
Discuss the following:
Explain agency law and the three types of authority “relationships” that are created in the workplace between employers and employees. In other words, the authority an employee has provides an understanding of what they can and can not do in the workplace. Which authority relationship is created between your company and Leo and, per the scenario, is your company liable to restock Dan’s store? What is “scope of employment” and how is it applicable?
Identify and explain the Employment-at-Will Doctrine and all the possible exceptions to the Doctrine. Research and provide an example case of a wrongful discharge in the last two years in violation of the Doctrine and explain the facts, the parties, their arguments, the law and the outcome of the case.
Sample Solution
Agency law is the legal framework that defines the relationship between a principal (the employer) and an agent (the employee). It stipulates what types of authority, such as express or implied, can be given to an employee. Express authority is granted when the principal explicitly gives permission to take certain actions on their behalf. Implied authority exists when there is no explicit agreement but it can be inferred from the circumstances that an employee has been given permission to act in a certain way. In this case, Leo’s relationship with your company would fall under implied authority since you have not explicitly granted him any specific powers. Therefore, Leo was likely acting within his scope of employment when he made the deal with Dan as long as it related to your business in some way.
Sample Solution
Agency law is the legal framework that defines the relationship between a principal (the employer) and an agent (the employee). It stipulates what types of authority, such as express or implied, can be given to an employee. Express authority is granted when the principal explicitly gives permission to take certain actions on their behalf. Implied authority exists when there is no explicit agreement but it can be inferred from the circumstances that an employee has been given permission to act in a certain way. In this case, Leo’s relationship with your company would fall under implied authority since you have not explicitly granted him any specific powers. Therefore, Leo was likely acting within his scope of employment when he made the deal with Dan as long as it related to your business in some way.
