Wk3 2 hr1


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Wk3 2 hr1

  1. 1. <ul><li>REVIEW </li></ul><ul><li>HUMAN RESOURCE MGMT I </li></ul><ul><ul><li>Elements of contract </li></ul></ul><ul><ul><li>Provisions of employment contract </li></ul></ul><ul><li>WRAP-UP </li></ul>
  2. 2. <ul><li>WAIVER </li></ul><ul><ul><li>Signed by participants before activity </li></ul></ul><ul><ul><li>If legally effective, participants’ negligence claims against your organization will be dismissed by court </li></ul></ul><ul><ul><li>Against public policy (courts hate it!) </li></ul></ul>
  3. 3. <ul><li>AGREEMENTS TO PARTICIPATE </li></ul><ul><ul><li>Signed by participants before activity </li></ul></ul><ul><ul><li>It must clearly explain  </li></ul></ul><ul><ul><ul><li>Nature of activity & danger </li></ul></ul></ul><ul><ul><ul><li>Eligibility to participate (e.g., physical condition) </li></ul></ul></ul><ul><ul><li>Not negate liability but helps defensive position </li></ul></ul>
  4. 4. <ul><li>ELEMENTS OF CONTRACT: TO BE LEGALLY ENFORCEABLE, A CONTRACT MUST HAVE ALL FOUR  </li></ul><ul><ul><li>Offer </li></ul></ul><ul><ul><li>Acceptance </li></ul></ul><ul><ul><li>Consideration </li></ul></ul><ul><ul><li>No defense </li></ul></ul>
  5. 5. <ul><li>ELEMENTS OF CONTRACT: OFFER </li></ul><ul><ul><li>Precatory terms: Not enough to become an offer </li></ul></ul><ul><ul><ul><li>“ We’d like to have you here … Would be here if all your concerns can be accommodated?” </li></ul></ul></ul><ul><ul><ul><li>“ We will be extremely happy if we can work together” </li></ul></ul></ul><ul><ul><li>Clear enough: An offer </li></ul></ul><ul><ul><ul><li>“ You will work from 9:00 a.m. to 5:00 p.m. Monday-Friday, starting from next week … Your base salary is 35K not including performance bonus and employee benefits” </li></ul></ul></ul><ul><ul><ul><li>“ You can work at home … The weekly compensation is commensurate with your performance, which is 5% commission on every sales agreement you would make” </li></ul></ul></ul>
  6. 6. <ul><li>ELEMENTS OF CONTRACT: ACCEPTANCE </li></ul><ul><ul><li>Acceptance: Must accept entire offer as given </li></ul></ul><ul><ul><li>Additional term: Not acceptance but becomes a counter offer </li></ul></ul><ul><ul><li>Offer  counteroffer  acceptance </li></ul></ul><ul><ul><ul><li>Offer: “9-5 Monday-Friday, $1800.00 biweekly, no employee benefits except mandated by law” </li></ul></ul></ul><ul><ul><ul><li>Counteroffer: “OK … But I cannot work on Monday … Can I work on Saturday instead of Monday?” </li></ul></ul></ul><ul><ul><ul><li>Acceptance: “OK. Deal!” </li></ul></ul></ul>
  7. 7. <ul><li>ELEMENTS OF CONTRACT: CONSIDERATION </li></ul><ul><ul><li>Promise to perform in a contract must be “bargained for” </li></ul></ul><ul><ul><li>No consideration: Not legally obliged to perform </li></ul></ul><ul><ul><ul><li>“ I will work for you because I like you” </li></ul></ul></ul><ul><ul><ul><li>“ I will give you free golf lessons every Saturday morning” </li></ul></ul></ul><ul><ul><li>Consideration (“bargained for” promise): Must keep the promise legally </li></ul></ul><ul><ul><ul><li>“ I will work for your company for $500/week” </li></ul></ul></ul><ul><ul><ul><li>“ I will give you golf lessons every Saturday for 25/hour” </li></ul></ul></ul>
  8. 8. <ul><li>ELEMENTS OF CONTRACT: NO DEFENSE </li></ul><ul><ul><li>There must not be a reason for which court would strike down the contract </li></ul></ul><ul><ul><li>Examples </li></ul></ul><ul><ul><ul><li>Contract made under duress  No contract </li></ul></ul></ul><ul><ul><ul><li>Contract term enforced against a minor  No contract </li></ul></ul></ul><ul><ul><ul><li>Contract for performing an illegal activity  No contract </li></ul></ul></ul>
  9. 9. <ul><li>PROMISSORY ESTOPPEL: EXCEPTION TO REQUIREMENT OF CONSIDERATION </li></ul><ul><ul><li>Agreement w/o consideration enforceable if  </li></ul></ul><ul><ul><ul><li>A reliance is reasonably expected when it was made </li></ul></ul></ul><ul><ul><ul><li>In fact, there was a reliance </li></ul></ul></ul><ul><ul><ul><li>The party relied upon has damage </li></ul></ul></ul><ul><ul><li>Examples: If plaintiff can prove above three, the promisor must perform what he promised </li></ul></ul>
  10. 10. <ul><li>PROVISIONS: REASSIGNMENT </li></ul><ul><ul><li>Employers would loves to have & exercise this </li></ul></ul><ul><ul><li>Monson v. State of Oregon </li></ul></ul><ul><ul><ul><li>Fact: A football coach was assigned to golf team under a state regulation (incorporated to contract) </li></ul></ul></ul><ul><ul><ul><li>Rule: Any reassignment under a valid contract is enforceable </li></ul></ul></ul>
  11. 11. <ul><li>PROVISIONS: COMPENSATION </li></ul><ul><ul><li>Compensation includes not only salary but also “perks” (Examples) </li></ul></ul><ul><ul><ul><li>Golf club membership </li></ul></ul></ul><ul><ul><ul><li>Housing </li></ul></ul></ul><ul><ul><ul><li>Transportation </li></ul></ul></ul><ul><ul><ul><li>Spouse benefits </li></ul></ul></ul><ul><ul><li>You must draft this provision very carefully </li></ul></ul>
  12. 12. <ul><li>PROVISIONS: TERMS OF EMPLOYMENT </li></ul><ul><ul><li>How long the work period will be (e.g., # of years) </li></ul></ul><ul><ul><li>Must be in writing if more than 365 days </li></ul></ul><ul><ul><li>Rollover clause </li></ul></ul><ul><ul><ul><li>After X years, automatically renewed year by year </li></ul></ul></ul><ul><ul><ul><li>Unless one party notifies not to renew </li></ul></ul></ul><ul><ul><ul><li>Convenient but “lame duck” problem </li></ul></ul></ul>
  13. 13. <ul><li>PROVISIONS: TERMINATION </li></ul><ul><ul><li>Termination for just cause </li></ul></ul><ul><ul><ul><li>EE breached the contract </li></ul></ul></ul><ul><ul><ul><li>Morals clause: How to justify? </li></ul></ul></ul><ul><ul><li>Termination without cause </li></ul></ul><ul><ul><ul><li>ER just fire EE without breach </li></ul></ul></ul><ul><ul><ul><li>Legal action: “Wrongful termination” </li></ul></ul></ul><ul><ul><ul><li>Good practice: “Buyout” provision w/ liquidated DMG </li></ul></ul></ul>
  14. 14. <ul><li>PROVISIONS: COVENANT NOT TO COMPETE </li></ul><ul><ul><li>Generally disfavored unless it is written very specifically  </li></ul></ul><ul><ul><ul><li>Limited geographical region </li></ul></ul></ul><ul><ul><ul><li>Definite & reasonable length of time period </li></ul></ul></ul><ul><ul><ul><li>Example: Director of Nike  Reebok (1 yr) </li></ul></ul></ul>
  15. 15. <ul><li>PROVISIONS: COVENANT NOT TO COMPETE </li></ul><ul><ul><li>Northeastern v. Brown </li></ul></ul><ul><ul><ul><li>Fact: ER’s consent required for football coach’s move </li></ul></ul></ul><ul><ul><ul><li>Rule: Injunctive relief is possible in addition to liquidated damage if “willful & intentional breach” </li></ul></ul></ul><ul><ul><ul><li>Court awarded more than usual </li></ul></ul></ul>
  16. 16. <ul><li>PROVISIONS: BUYOUT CLAUSE </li></ul><ul><ul><li>If one party breaches the contract the breaching party must pay a lump sum $$$ </li></ul></ul><ul><ul><li>Examples </li></ul></ul><ul><ul><ul><li>“ If any party breaches any provision in this contract, it will pay the aggrieved party 300,000” </li></ul></ul></ul><ul><ul><ul><li>“ A party must pay 10 million the other if it terminates any provision in this contract prior to the end of the current contract term” </li></ul></ul></ul>
  17. 17. <ul><li>PROVISIONS: EMPLOYMENT AT WILL </li></ul><ul><ul><li>Terminated at anytime, w or w/o cause, by employer or employee </li></ul></ul><ul><ul><li>Types of “at will” employment </li></ul></ul><ul><ul><ul><li>If contract explicitly provides that it is “at will” </li></ul></ul></ul><ul><ul><ul><li>If no term provided in contract </li></ul></ul></ul><ul><ul><ul><li>If no written contract at all (= implied contract) </li></ul></ul></ul>
  18. 18. <ul><li>FORMATION OF CONTRACT </li></ul><ul><ul><li>Offer </li></ul></ul><ul><ul><li>Acceptance </li></ul></ul><ul><ul><li>Consideration </li></ul></ul><ul><ul><li>No defense against contract’s enforceability </li></ul></ul>
  19. 19. <ul><li>ENFORCEABILITY OF CONTRACT </li></ul><ul><ul><li>Promissory estoppel: Contract w/o consideration still enforceable for justice if  </li></ul></ul><ul><ul><ul><li>A reliance is reasonably expected when it was made </li></ul></ul></ul><ul><ul><ul><li>In fact, there was a reliance </li></ul></ul></ul><ul><ul><ul><li>The party relied upon has damage </li></ul></ul></ul>
  20. 20. <ul><li>EMPLOYMENT CONTRACT: PROVISIONS </li></ul><ul><ul><li>Reassignment </li></ul></ul><ul><ul><li>Compensation </li></ul></ul><ul><ul><li>Terms of employment </li></ul></ul><ul><ul><li>Termination & liquidated damage </li></ul></ul><ul><ul><li>Covenant not to compete </li></ul></ul><ul><ul><li>Employment at will </li></ul></ul>