Chapter 30 Liability of Principals, Agents, and Independ

Chapter 30
Liability of Principals, Agents, and Independent Contractors
Agent’s Duty of LoyaltyDuty of loyalty: A fiduciary duty owed
by an agent, not to act adversely to the interests of the principal
Copyright © 2013 Pearson Education, Inc. Publishing as
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Agent’s Duty of LoyaltyCommon types of breaches of
loyaltySelf-dealingUsurping an opportunityCompeting with
principalMisuse of confidential informationDual agency
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Tort Liability of Principals and Agents to Third PartiesPrincipal
is liable for tortious conduct of agent acting within the scope of
authorityAgent is liable for tortious conduct of principal only if
agent directly or indirectly, aids and abets the principal’s
conductThe three sources of tort liability for principals and
agents are negligence, intentional torts, and misrepresentation

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NegligenceLiability for negligence is based on:Respondeat
superior: Principals are liable for negligent conduct of agents
acting within the scope of their employmentVicarious liability:
Principal is liable because of employment contract with agent,
not due to personal fault
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Negligence
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30-6Agent’s conductAgent liablePrincipal liableFrolic and
detourYesYes/NoComing and going ruleYesNoDual-purpose
missionYesYes
Intentional Torts It includes assault, battery, false

imprisonment and other intentional conduct that causes injury to
another personPrincipal not liable for intentional torts of agents
and employees that are committed outside the principal’s scope
of business
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Intentional TortsTests to determine whether an agent’s
intentional torts were committed within the scope of
employment:Motivation test: Determines whether an agent’s
motivation in committing an intentional tort is to promote the
principal’s businessWork-related test: Determines whether an
agent committed an intentional tort within a work-related time
or space
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Case 30.1: Employee’s Intentional Tort
CaseBurlarley v. Walmart Stores, Inc.904 N.Y.S.2d 826, Web
2010 N.Y.App. Div. Lexis 6278 (2010)Appellate Division of the
Supreme Court of New YorkIssueIs Walmart vicariously liable
for the personally motivated acts of its cashier?
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MisrepresentationPrincipal is liable for any misrepresentations
made by agent within scope of employmentIntentional
misrepresentation: occurs when an agent makes statements that
he or she knows are untrueInnocent misrepresentation: occurs
when an agent negligently makes misrepresentation
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Contract Liability of Principals and Agents to Third
PartiesAgency law imposes contract liability on principals and
agents Principal who authorizes agent to enter into a contract
with third party is liable on the contractThird party can enforce
and recover damages from principalAgent can also be held
liable in certain circumstances
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Fully Disclosed AgencyThird party entering into the contract
knows:That agent is acting for a principalActual identity of the
principalPrincipal is liable on the contractAgent is liable, only
if he or she guarantees that the principal will perform the
contract
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Partially Disclosed AgencyThird party entering into the
contract:Knows that agent is acting for a principalDoes not
know the identity of the principalBoth principal and agent are
liable to the third party if principal fails to perform the contract
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Undisclosed AgencyThird party is unaware of:Existence of an
agencyIdentity of principalBoth principal and agent are liable to
the third party if the principal fails to perform the contract
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Agent Exceeding Scope of AuthorityImplied warranty of
authority: agent who enters into a contract on behalf of another
party warrants that he or she has the authority to do
soRatification of a contract: A situation in which a principal
accepts an agent’s unauthorized contractAgent is liable for
breaching the implied warranty of authorityPrincipal is liable,
only if he or she ratifies
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Tort Liability of Principals and Agents to Third Parties
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30-16Agent’s ConductAgent LiableLiability of the
PrincipalMisrepre-
sentationYesPrincipal is liable for the intentional and innocent
misrepresentations made by agent acting within the scope of his
or her authority.NegligenceYesPrincipal is liable under doctrine
of respondeat superior if agent’s negligent act was committed
within scope of employment.
Tort Liability of Principals and Agents to Third Parties
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30-17Agent’s ConductAgent LiableLiability of the
PrincipalIntentional TortYesMotivation Test: Principal is liable
if agent’s motivation in committing the tort was to promote the
principal’s business.Intentional Tort
YesWork-Related Test: Principal is liable if agent committed
the tort within work-related time and space.

Liability for an Independent Contractor’s TortsIndependent
contractors: outsiders employed by principals to perform tasks
on their behalfIndependent contractors are personally liable for
their own tortsA principal is not liable for the torts of its
independent contractorsPrincipals cannot avoid liability for
inherently dangerous activities that they assign to independent
contractors
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Case 30.2 : Independent Contractor
CaseLewis v. D. Hays Trucking, Inc.701 F.Supp.2d 1300, Web
2010 U.S. Dist. Lexis 28035 (2010)United States District Court
for the Northern District of GeorgiaIssueIs D. Hays Trucking,
Inc., an independent contractor or an employee of Hercules?
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Liability for Independent Contractor’s ContractsA principal can
authorize an independent contractor to enter into contractsThe
principal is not liable on the contract, if the independent
contractor enters a contract without the principal’s authority
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1. This discussion forum is designed to help you understand the
effects of cognitive biases on decision making, in this case
employee hiring decisions, in order to improve decision making.
Years of research have demonstrated a number of biases in
decision making resulting from heuristics or mental short-cuts
typically used by decision makers. These small shortcuts can
have major consequences on decision accuracy and
effectiveness. Some of the main heuristics that have been
identified include Anchoring (and under-adjustment),
Representativeness, Framing, Confirmation bias,
Overconfidence bias, Hindsight bias, and Escalation of
Commitment. Please see the textbook, the lecture, and the video
for this week for details.
What do you believe to be the most important bias affecting
hiring decisions made by HR professionals andor hiring
managers? Provide an example you have experienced (as an
applicant, hiring decision maker, or observer of hiring
decisions) or a hypothetical example based on your experience.
Be sure to define the heuristic or bias and explain why or how
you think this incident exemplifies the decision bias.

2. What are the core competencies of your project company?
Give an application example.
3. Watch the short video on Kotter discussing how to deal with
resistance to change. Based on your experience and what was
covered in class; do you agree with him? Why or why not?
https://www.youtube.com/watch?v=Wdroj6F3VlQ
Chapter 33
Equal Opportunity in Employment
Civil Rights Act of 1964Statutes that outlawed employment
discrimination against certain classesProviding equal
opportunity in employmentTitle VII of Civil Rights Act of
1964: Enacted to eliminate job discrimination based on race,
color, religion, sex, and national origin
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Scope of Coverage of Title VIIIt applies to:Employers with
fifteen or more employeesAll employment agenciesLabor unions
with fifteen or more membersState and local governments and
agenciesFederal government employment

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Scope of Coverage of Title VIIProhibits discrimination in
hiring, promotion, compensation, dismissal, work rules,
etc.Disparate-treatment discrimination: Employer discriminates
against a specific individual based on the person’s race, color,
religion, sex, or national originDisparate-impact discrimination:
Employer discriminates against an entire protected class
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Remedies for Violations of Title VIISuccessful plaintiff can
recover:Back pay and reasonable attorneys’ feesEquitable relief,
including reinstatement and seniorityPunitive damages for
intentional discrimination
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Race, Color, and National Origin DiscriminationRace
discrimination: based on a person’s raceColor discrimination:
based on a person’s colorNational origin discrimination: based
on a person’s heritage, cultural characteristics, or country of the
person’s ancestors
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Gender DiscriminationDiscrimination based on genderProhibits
discrimination where sexual favors are requested to obtain job
or promotionPregnancy Discrimination Act: forbids
discrimination due to pregnancy, childbirth, or related medical
conditions
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Sexual HarassmentLewd remarks, touching, intimidation,
posting of indecent materials, and other verbal or physical
conduct of a sexual natureSexual harassment that creates hostile
work environment violates Title VIISame-sex harassment also
violates Title VII
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Sexual HarassmentEmployer may defend by proving that:He
exercised care to prevent and correct any such
behaviorPlaintiff-employee failed to take advantage of
preventive or corrective opportunities provided by employer
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Religious DiscriminationDiscrimination based on a person’s
religion or religious practicesEmployer has to reasonably
accommodate religious observances, practices, and beliefs of
employeesPermits religious organizations to employ individuals
of a particular religion
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Defenses to a Title VII ActionEmployers can select employees
based on merit, which includes work, qualification,
etc.Employers maintain seniority system that reward long-term
employees Bona fide occupational qualification (BFOQ):
Discrimination based on protected classes other than race or
color is permittedMust be job related and a business necessity

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Equal Pay ActProtects both sexes from pay discrimination based
on sexProhibits disparity in pay for jobs that require:Equal
skillEqual effortEqual responsibilitySimilar working conditions
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Criteria That Justify a Differential in WagesFour criteria that
justify a differential in wages:SeniorityMeritQuantity or quality
of productAny factor other than sexEmployer bears the burden
of proving these defenses
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Age Discrimination in Employment ActProhibits age
discrimination practices:Against employees who are 40 years
and olderIn all employment decisions, including hiring,
promotions, compensation, etc.With regard to employee
benefitsPermits age discrimination where BFOQ is shown

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Americans with Disabilities ActEmployers and providers of
public transportation, telecommunications, and public
accommodations must accommodate individuals with
disabilitiesQualified individual with a disability: prohibits
discrimination against individual who has physical or mental
impairment that limits a major life activity, but can perform the
functions of the job
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Americans with Disabilities ActLimits on employer questions:
limits employer’s ability to inquire about an applicant’s
disabilitiesReasonable accommodation for disability: employer
is obliged to reasonably accommodate an individual’s disability,
if it does not cause undue hardship on employer
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Americans with Disabilities ActUndue hardship: employers are
not obligated to provide accommodations that impose an undue
hardship on employerUncovered conditions: certain conditions
of disability, like temporary impairments, and users of illegal
drugs and alcohol are not covered by the act
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Genetic Information Nondiscrimination ActProhibits
discrimination against employees based on genetic
informationProhibits use of genetic information in making
decisions, including hiring, promoting, providing benefits,
etc.Remedies for violation include corrective action and
monetary fines
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Affirmative ActionAffirmative action plan: job preferences
given to minority groups and other protected-class applicants
when making employment decisionsLegal, if narrowly tailored
to achieve compelling interestReverse discrimination:
discrimination against a majority groupMajority group may sue
under Title VII
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Protection from RetaliationProhibits employers from retaliating
against employee for:Filing a charge of
discriminationParticipating in a discrimination proceedingActs
of retaliation include dismissing, demoting, harassing, etc.
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Case 33.2: U.S. Supreme Court Employer Retaliation
CaseThompson v. North American Stainless, LP131 S.Ct. 863,
178 L.Ed.2d 694, Web 2011 U.S. Lexis 913 (2011)Supreme
Court of the United StatesIssueDoes Title VII permit third-party
retaliation claims against an employer?
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Chapter 29
Agency Formation and Termination
Introduction to Agency Formation and TerminationUse of
agents — allows one person to act on behalf of
anotherIndependent contractors — Outside contractors who are
employed by a principal to conduct limited activities for the
principal
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Agency Principal–agent relationshipThe fiduciary relationship
“which results from the manifestation of consent by one person
to another that the other shall act in his behalf and subject to his
control, and consent by the other so to act”
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Page 487

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AgencyAgency law: The large body of common law that
governs agencyA mixture of contract law and tort lawPrincipal:
A party who employs another person to act on his or her
behalfAgent: A party who agrees to act on behalf of another
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Page 487
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Exhibit 29.1: Principal–Agent Relationship
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Page 487
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Who Can Initiate Agency RelationshipAny person who has the
capacity to contract can appoint an agent to act on his or her
behalfPersons who lack contractual capacity cannot appoint an
agent
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488
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Kinds of Employment Relationships
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29-7Type of RelationshipDescriptionPrincipal–agentThe agent
has authority to act on behalf of the principal, as authorized by
the principal and implied from the agency.
An employee is often the agent of his employer.Employer –
employeeAn employee is hired to perform a task or service.
An employee cannot enter into contracts
on behalf of the employer.
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Independent ContractorPrincipal-independent contractor
relationship: The relationship between a principal and an
independent contractor The contractor is not an employee of the
principal but has been employed by the principal to perform a
certain task on behalf of the principal A principal can authorize

an independent contractor to enter into contractsPrincipals are
bound by the contracts
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Page 488-489
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Case 29.1: AgencyCaseBosse v. Brinker Restaurant
Corporation, d.b.a. Chili’s Grill and BarWeb 2005 Mass. Super.
Lexis 372 (2005)Superior Court of MassachusettsIssueIs the
restaurant patron who engaged in the high-speed car chase an
agent of Chili’s?
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Page 489-490
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Power of AttorneyAn express agency agreement that is often
used to give an agent the power to sign legal documents on
behalf of the principalGeneral power of attorney: A principal
confers broad powers on the agent to act in any matters on the
principal’s behalfSpecial power of attorney: A principal confers
powers on an agent to act in specified matters on the principal’s
behalf
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Page 491
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Case 29.2: Scope of EmploymentCaseMatthews v. Food Lion,
LLC695 S.E.2d 828, Web 2010 N.C. App. Lexis 1151
(2010)North Carolina Court of AppealsIssueWas Hall acting
within the scope of her employment at the time of the accident?
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Page 491-492
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Formation of Agency Relationships
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29-12Type of AgencyFormationEnforcement of the
ContractExpressAuthority is expressly given to the agent by the
principalPrincipal and third party are bound to the
contractImpliedAuthority is implied from the conduct of the
parties, custom and usage of trade, or act incidental to carrying
out the agent’s dutiesPrincipal and third party are bound to the
contractBy ratificationPrincipal and third party are bound to the
contractPrincipal and third party are not bound to the contract
unless the principal ratifies the contract

493
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Formation of Agency Relationships
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29-13Type of AgencyFormationEnforcement of the
ContractApparentAuthority is created when the principal leads a
third party to believe that the agent has authorityPrincipal and
third party are bound to the contractIncidentalAuthority that is
implied to act beyond express agency powers to take all actions
reasonably necessary to protect the principal’s property and
rightsPrincipal and third party are bound to the contract
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Principal’s Duties
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Page 493
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Principal’s Duty to CompensateA duty that a principal owes to
pay an agreed-upon amount to the agent Either upon the
completion of the agency or at some other mutually agreeable
timeAgency contract specifies the compensation to be paidNo
agreement as to the amount of compensation – principal will
pay the agent the customary fee paid in the industry
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Page 493
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Principal’s Duty to ReimburseThe principal owes a duty to
reimburse the agent for expenses incurred by the agent if the
expenses wereAuthorized by the principalWithin the scope of
the agencyNecessary to discharge the agent’s duties in carrying
out the agencyUnless otherwise agreed upon

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Page 493
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Principal’s Duty to IndemnifyA principal owes a duty to
indemnify the agent for any losses the agent suffers because of
the principal’s conductDuty to cooperate: The principal owes a
duty to cooperate with and assist the agent in the performance
of the agent’s duties and the accomplishment of the
agencyUnless otherwise agreed upon
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Page 493-494
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Agent’s Duties
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Page 494
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Agent’s Duty to PerformAn agent’s duty to a principal that
includesPerforming the lawful duties expressed in the
contractMeeting the standards of reasonable care, skill, and
diligence implicit in all contracts
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Page 494
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Agent’s Duty to NotifyAn agent owes a duty to notify the
principal of important information concerning the
agencyImputed knowledge: Information that is learned by an
agent that is attributed to the principal
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Page 494-495
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Agent’s Duty to AccountA duty that an agent owes to maintain
an accurate accounting of all transactions undertaken on the
principal’s behalfRequires the agent toMaintain a separate
account for the principalUse the principal’s property in an
authorized manner
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Termination of Agency by Act of PartiesAgency can be
terminated by the following actsMutual assent of the partiesIf a
stated time has lapsedIf a specified purpose is
achievedOccurrence of a stated eventNotice of
TerminationDirect noticeConstructive notice
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Page 496
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Termination by an Unusual Change in CircumstancesUnusual
change in circumstances – leads the agent to believe that the
principal’s original instructions should no longer be
validTermination by impossibility of performanceThe loss or
destruction of the subject matter of the agencyThe loss of a
required qualificationA change in the law
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Page 497
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Termination by Operation of LawAn agency contract is
terminated in the following circumstancesThe death of either
the principal or agentThe insanity of either the principal or the
agentThe bankruptcy of the principalThe outbreak of a war
between the principal’s country and the agent’s countryNo duty
to notify third parties about the termination
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Page 497
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Wrongful TerminationThe termination of an agency contract in
violation of the terms of the agency contractThe nonbreaching
party may recover damages from the breaching party
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Page 497
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Chapter 32
Labor Law and Collective Bargaining
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The right of workers to form, join, and assist labor unions is a
statutorily protected right in the United States.
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Learning ObjectivesDescribe how a union is organizedExplain
the consequences of an employer’s illegal interference with a
union electionDescribe the process of collective
bargainingDescribe employees’ rights to strike and
picketExplain labor’s bill of rights
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42 - *

Federal Labor Union Statutes
Norris-LaGuardia Act
National Labor Relations Act
Labor-Management Relations Act
Labor-Management Reporting and Disclosure Act
Railway Labor Act
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42 - *
Organizing a UnionEmployees have right to:Form, join, and
assist labor organizationsBargain collectively through chosen
representativesEngage in concerted activity to promote these
rightsBargaining unit must be defined before union petitions for
election

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Types of Union ElectionsContested election: contested by the
employerConsent election: not contested by the
employerDecertification election: employees may wish to
dissolve union
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Union Solicitation on Company PropertyEmployer may restrict
solicitation activities by employees to nonworking areas during
employees’ free timeNonemployees may be prohibited from
soliciting on behalf of the union anywhere on company
propertyInaccessibility exception: permits employees to engage
in union solicitation on company property, if they are beyond
reach of the union
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Case 32.1: U.S. Supreme Court Organizing a Labor Union
CaseLechmere, Inc. v. National Labor Relations Board502 U.S.

527, 112 S.Ct. 841, 117 L.Ed.2d 79, Web 1992 U.S. Lexis
555Supreme Court of the United StatesIssueMay a storeowner
prohibit nonemployee union organizers from distributing
leaflets in a shopping mall parking lot owned by the store?
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Illegal Interference with an ElectionUnfair labor practice for
employer to interfere with, coerce, or restrain employees from
exercising their statutory right to form and join unionsUnions
prohibited from engaging in unfair labor practices that interfere
with a union election
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Collective BargainingAct of negotiating contract terms between
an employer and the members of a unionSubjects of collective
bargaining:Compulsory subjects: wage, hours, and other terms
and conditions of employmentPermissive subjects: not
compulsory or illegalIllegal subjects: cannot be negotiated or
agreed upon
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Union Security AgreementsClosed shop: employer agrees to
hire only employees who are already members of a unionUnion
shop: employer may hire anyone whether he belongs to a union
or not, but the employee must join the union within a certain
time periodAgency shop: employer may hire anyone whether
she belongs to a union or not, but the employee must pay an
agency fee to the union
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StrikesA union can call a strike:If a collective bargaining
agreement cannot be reachedTo obtain economic benefitsTo
correct an unfair labor practiceUnion members refuse to work
during a strike
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Cooling-Off PeriodA mandatory sixty days’ notice before a
strike can commenceGives the employer and union enough time
to negotiate a settlementIllegal for a strike to commence during
the sixty- day period
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Illegal StrikesViolent strikesSit-down strikesPartial or
intermittent strikesWildcat strikesStrike in violation of no-
strike clause
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Crossover and Replacement WorkersCrossover workers:
employees who choose not to strike or return to work after
joining the strikesReplacement workers: hired on temporary or
permanent basis to take the place of the striking employees
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42 - *
Employer Lockout
Act of the employer to prevent employees from entering the
work premises when the employer reasonably anticipates a
strike.
Employer Lockout
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PicketingStrikers walking in front of the employer’s premises,
carrying signs announcing their strikePicketing is lawful unless
it:Is accompanied by violenceObstructs customers from entering
employer’s place of business Prevents entry of nonstriking
employeesPrevents pickups and deliveries at employers place of
business
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Secondary Boycott PicketingUnions try to bring pressure
against an employer by picketing the employer’s suppliers or
customersLawful only if it is product picketing, that is,
picketing against the employer’s productIllegal, if directed
against the neutral employer
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Internal Union AffairsUnions may adopt internal union rules to
regulate the operation of the union, acquire and maintain union
membership, and the likeSubject to Landrum-Griffin Act’s labor
bill of rights. Each union member has equal rights and
privileges to:Nominate candidates for union officeVote in
electionsParticipate in membership meetings

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Internal Union AffairsA union may discipline members
for:Walking off the job in a nonsanctioned strikeWorking for
wages below union scaleSpying for an employerAny other
unauthorized activity that has an adverse economic impact on
the union
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32-21
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Chapter 31
Employment, Worker Protection, and Immigration Law
Workers’ Compensation ActsWorkers’ compensation:
Compensation paid to workers and their families when workers
are injured in connection with their jobsThese acts help workers

receive compensation for injuries that occur on the jobWorkers
file a claim with the agencyAgency determines legitimacy of
claimCompensation benefits are paid accordingly
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Workers’ Compensation InsuranceStates require employers
to:Purchase workers’ compensation insurance, orSelf-insure by
making payments, if they have the ability to pay compensation
claims
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Employment-Related InjuryInjury to an employee that arises out
of and in the course of employmentWorkers’ compensation
insurance covers:Physical injuriesStressMental illness, that are
employment related
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Exclusive RemedyWorkers’ compensation is an exclusive

remedyWorkers cannot sue their employers in court for
damages, except when employer intentionally injures an
employeeWorkers can sue third parties to recover damages
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Case 31.1:Workers’ Compensation
CaseKelley v. Coca-Cola Enterprises, Inc.Web 2010 Ohio App.
Lexis 1269 (2010)Court of Appeals of OhioIssueIs Kelley
entitled to workers’ compensation benefits?
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Occupational Safety and Health ActPromotes safety in the
workplaceEstablished the Occupational Safety and Health
Administration (OSHA)Imposes record-keeping and reporting
requirements on employersRequires employers to post notices in
the workplace, informing employees of their rights
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Occupational Safety and Health Administration
(OSHA)Empowered to enforce the Occupational Safety and
Health ActEmpowered to adopt rules and regulations to
interpret and enforce the actAdopted thousands of regulations to
enforce the safety standards established by the act
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Types of OSHA StandardsSpecific duty standards: Developed
and apply to specific equipment, procedures, type of work,
individual industry, unique work conditions, and the
likeGeneral duty standards: Imposes on an employer a duty to
provide a work environment that is free from recognized
hazards
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Fair Labor Standards Act (FLSA)Prohibits child
laborEstablishes minimum wage requirementsEstablishes

overtime pay requirements
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Child LaborThe Fair Labor Standards Act forbidsthe use of
oppressive child laborshipping of goods produced by businesses
that use oppressive child labor
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Department of Labor Regulations
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31-12Age(in years)OccupationLess than 14Newspaper
deliverers14–15 Non-hazardous jobs; limited hours16–17 Non-
hazardous jobs; unlimited hours18 and aboveAny job

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Minimum Wage and Overtime PayEmployees should be paid the
federal minimum wage for all hours workedStudents and
apprentices can be paid less than the minimum wageEmployees
should be paid overtime pay of one-and-a-half times their
regular pay for each hour worked in excess of 40 hours that
week
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Case 31.2: U.S. Supreme Court Fair Labor Standards Act
CaseIBP, Inc. v. Alvarez546 U.S. 21, 126 S.Ct. 514, 163
L.Ed.2d 288, Web 2005 U.S. Lexis 8373 (2005)Supreme Court
of the United StatesIssueIs the time spent by employees walking
between the locker room and production area compensable
under the Fair Labor Standards Act?
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Prentice Hall.
Exemptions from Minimum Wage and Overtime Pay
RequirementsExecutivesAdministrative employeesLearned

professionalsHighly compensated employeesComputer
employeesOutside sales representatives
Prentice Hall.
31-15
Prentice Hall.
Family and Medical Leave ActGuarantees workers unpaid time
off from work for family and medical emergenciesApplies to
companies with 50 or more workers, federal, state, and local
government workersEmployee must have worked for employer
for at least one year
Prentice Hall.
31-16
Prentice Hall.
Family and Medical Leave ActProvides up twelve weeks of
unpaid leave for:Birth of childPlacement of child for adoption
or foster careSerious health conditionCare for spouse, child, or
parent with serious health conditionEmployee must be restored
to same or equivalent position upon return
Prentice Hall.
31-17
Prentice Hall.

Consolidated Omnibus Budget Reconciliation Act
(COBRA)Terminated employee must be offered the opportunity
to continue group health insuranceEmployer must notify
covered employees of their rights under COBRAGroup rate
premium should be paid to continue coverage
Prentice Hall.
31-18
Prentice Hall.
Employee Retirement Income Security Act (ERISA)Applies to
employer-offered pension plansDesigned to prevent fraud and
abuses in private pension plansEmployers are subjected to
record-keeping and disclosure requirementsProvides for
vestingVesting: occurs when an employee has a nonforfeitable
right to receive pension benefits
Prentice Hall.
31-19
Prentice Hall.
Government ProgramsUnemployment compensation: paid to
workers who are temporarily unemployedEmployers pay
unemployment taxesTo collect benefits, applicants must be
available for workWorkers fired due to bad conduct or workers
who quit voluntarily, are not eligible

Prentice Hall.
31-20
Prentice Hall.
Government ProgramsSocial security: provide limited
retirement and death benefits to certain employees and their
dependentsRetirement benefitsSurvivors’ benefitsDisability
benefitsMedicare benefitsFailure to submit taxes results in
interest payments, penalties, and criminal liability
Prentice Hall.
31-21
Prentice Hall.
Immigration LawAdministered by U.S. Citizenship and
Immigration Services(USCIS)H-1B visa: allows U.S. employers
to employ in the United States foreign nationals who are skilled
in specialty occupationsEB-1 visa: allows U.S. employers to
employ in the United States foreign nationals who possess
extraordinary ability for certain types of employment
Prentice Hall.
31-22
Prentice Hall.
Immigration LawThe Immigration Reform and Control

Act(IRCA) requires the employer to:Obtain a completed Form I-
9 for every employeeExamine evidence of employee’s
identityThe IRCA imposes criminal and financial penalties on
employers who knowingly hire undocumented workers
Prentice Hall.
31-23
Prentice Hall.
Prentice Hall.
31-24
Prentice Hall.
2016/1/5
- BOSSE, et al. v. BRINKER RESTAURANT CORPORATION
D/B/A CHILI'S | Full-text Opinions
http://masslawyersweekly.com/fulltext-opinions/2005/08/22/bos
se-et-al-v-brinker-restaurant-corporation-dba-chilis/ 1/3
D/B/A CHILI'S
By: admin in Fulltext Opinion, Massachusetts Superior Court
August 22, 2005
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. SUPERIOR COURT

CIVIL ACTION
NO. 03-5064-A
BRENDAN BOSSE, minor by his mother and next friend,
ANN MARIE BOSSE,
and
MICHAEL GRIFFIN, minor by his father and next friend,
MICHAEL GRIFFIN, SR.,
Plaintiffs,
V.
BRINKER RESTAURANT CORPORATION d/b/a CHILI’S GRI
LL AND BAR,
Defendant.
RULING
Upon
DEFENDANT BRINKER RESTAURANT CORPORATION’S
MOTION FOR SUMMARY JUDGMENT
_____________________________________________________
____________________
RULING .

Upon consideration of all motion and opposition materials, incl
uding all affidavits, exhibits, verified answers to interrogatories
, deposition excerpts, memoranda of
law, and of oral arguments by all parties, the court hereby ALL
OWS defendant Brinker Restaurant Corporation’s motion for a f
ull summary judgment against all
plaintiffs.
REASONING .
The two plaintiff teenagers, Brendan Bosse and Michael Griffin,
through their parental next friends, are suing the defendant Bri
nker Restaurant Corporation, doing
business as the “Chili’s Grill and Bar” restaurant chain (hereina
fter “Chili’s”), for compensatory damages for personal injuries.
The injuries resulted from a high
speed car chase. The teenagers allege that another driver pursue
d them negligently, grossly negligently, or recklessly, so as to c
ause them to crash. They claim
that the pursuer was acting as a servant or agent of a Chili’s Res
taurant. Details will follow.
Summary Judgment Standards .
Summary judgment is appropriate if a plaintiff has no reasonabl
e expectation of proving an essential element of his claim. Kour
ouvacilis v. General Motors
Corporation, 410 Mass. 706, 716 (1991); Tambolleo v. Town of
West Boylston, 34 Mass. App. Ct. 526, 530 (1993).
Summary judgment is inappropriate if a genuine issue of materi
al fact remains open. For that determination the motion judge m
ust examine the factual materials
in the light most favorable to the party resisting summary judgm
ent. Corellas v. Viveiros, 410 Mass. 314, 316-317 (1991); Kelle

y v. Rossi, 395 Mass. 659, 661
(1985); and Conley v. MBTA, 405 Mass. 168, 173 (1989).
The Undisputed Facts
In the light most favorable to the plaintiffs Bosse and Griffin, th
e undisputed factual materials tell the following story.
On the evening of September 20, 2003, Bosse and Griffin were
part of a group of four teenagers ordering and eating a meal at t
he Chili’s Restaurant on the
Providence Highway, Route 1, Dedham. The tab for the meal ca
me to $56. They decided not to pay. They went out of the buildi
ng, got in their car (a gold-colored
Camry), and headed northward up Route 1.
A regular patron of the restaurant saw them leave without paym
ent. He followed them in a white sports utility vehicle. They sa
w him following. They drove into a
parking lot at a nearby Best Buy electronics store. The pursuing
patron followed them into that lot. He got out of his SUV and y
elled words to the effect that he
had seen them skip out on their bill at Chili’s and that they wou
ld not get away with it. The patron’s car was unmarked; it bore
no Chili’s insignia. He wore civilian
clothing and no uniform or other insignia of employment at Chil
i’s.
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The teenagers then drove out of the Best Buy lot. The patron pu
rsued them. A high speed chase ensued through Dedham side str
eets.
By cell phone the patron was communicating to a male employe
e at Chili’s a description of the teenagers’ car and the path of th
e chase. The male employee, in
turn, was giving this information to the outlet manager, Frank C
onway. Conway called 911 and informed the dispatcher (a) that
the teenagers had run out on
their bill, (b) that some of “our regulars were leaving and they .
. . they followed them and they just phoned back saying that the
y were down by the CVS and the
high school.” Conway described the teenagers’ gold-colored Ca
mry to the dispatcher.
As Conway’s call was in progress, the 911 dispatcher was recei
ving multiple calls from observers reporting a crash of an autom
obile in the vicinity of Dedham
High School. In the course of the high speed chase, the teenager
s had collided with a cement or brick wall. The plaintiffs Bosse
and Griffin suffered the injuries
generating the present lawsuit against Chili’s.
The Chili’s patron continued past the crash scene and left the ar
ea. He remains unidentified.
Analysis .

The plaintiffs sue upon the theory of respondeat superior. They
contend that the Chili’s patron converted to a Chili’s servant; th
at he conducted his chase as an
agent of the restaurant; and that the restaurant should be liable f
or the consequences of his negligent or reckless pursuit.
In these circumstances an agency relationship will require three
elements. Most obviously, Chili’s must have consented to the ac
tion of the patron in its behalf.
Restatement of Agency (Second), § 1(1). Second, Chili’s must h
ave retained control, or the right of control, over the physical co
nduct of the patron in the
performance of the pursuit. Hohenlestner v. Quorum Health Ser
vices Resources, Inc., 435 Mass. 424, 436 (2001); Kelley v. Ros
si, 395 Mass. 659, 661 (1985);
Kovich v. Burke Moore Co., Inc., 355 Mass. 463, 468 (1969); a
nd Restatement of Agency (Second), § 1(1). Third, the conduct
of the agent must serve the benefit
or further the interest of the principal. Pinshaw v. Metropolitan
District Commission, 402 Mass. 687, 694 (1988); Kelley v. Mid
dlesex Corporation, 35 Mass. App.
Ct. 30, 32 (1993); and Restatement of Agency (Second), §§ 39,
228 (1958). Do the undisputed material facts permit a genuine is
sue whether Chili’s (1)
consented to, (2) controlled, and (3) benefitted from, the pursuit
of the deadbeat teenagers by the zealous patron?
1. Consent. The evidence is insufficient to create a genuine issu
e whether Chili’s
appointed or authorized the patron to act as a posse to conduct a
chase. No information indicates any preliminary communicatio
n between the patron and
restaurant manager, Conway. The events were spontaneous and f
ast breaking. No member of Chili’s house staff joined in the pur
suit. (Manager Conway gave

deposition testimony to the effect that Chili’s had an unwritten
but express policy forbidding staff to pursue a tab-dodgers out o
f the building. I do not rely upon
that representation for purposes of the present analysis.) The pla
intiffs argue that Chili’s effectively assented to an agency relati
onship by acceptance of the
patron’s reconnaissance reports during the course of the chase;
and by its failure to instruct him to break off the chase. That cir
cumstance is not enough. The
patron need not have been an agent to engage in that conduct. H
e was pursuing petty crime. Chili was reporting the petty crime
to the police. No meaningful
private beneficial relationship was necessary for those purposes.
No information indicates that any authorized person at Chili’s d
eputized the unidentified chaser as a collection agent.
2. Control. The evidence does not support a finding of control o
r a right of control. From the speed of events no opportunity aro
se for communication or
agreement between manager Conway and the patron. No underst
anding between them materialized. No information indicates tha
t Chili’s had any effective
control over the patron; that is, that Conway could have comma
nded the patron to give up the excitement of the chase. Nor does
it seem plausible that the
restaurant would have accepted control or supervision over a hi
gh speed chase through the side streets of the adjacent communi
ty.
3. Benefit or furtherance. The maximum benefit available to Chi
li’s was recovery of the $56. The comparative insignificance of
that benefit detracts from, if it does
not eliminate altogether, another necessary element of the propo
sed agency relationship: the furtherance of a meaningful interest
of the alleged principal. No

such serious interest existed here. Rather Chili’s received a min
or, voluntary, unrequested benefit independently of any legal rel
ationship, agency or otherwise,
with the patron. The voluntary conferral of such a benefit create
s no legal relationship. Restatement of Restitution § 112 (1936).
The dominant purpose of Chili’s
relay of the patron’s reports to the police appears to have been t
he public interest in the apprehension of petty criminals and not
the private recovery of the
unpaid bill.
Conclusion.
For these reasons no genuine issue of material fact emerges upo
n a claim of an agency relationship. The information generated
by discovery does not permit an
inference that Chili’s consented to such a relationship; that it ha
d the right of control necessary for such a relationship; or that it
possessed a genuine interest or
benefit in such a relationship. The burden of the plaintiffs is to
establish at least a genuine question of the presence of all three
elements. If the evidence had
failed to materialize upon any one of those elements, the deficie
ncy would be fatal to the lawsuit. The evidence appears to have
failed to materialize upon all
three of the elements.
Consequently, the plaintiffs enjoy no reasonable expectation of
proving an agency relationship.
Full summary judgment is appropriate.
____________________________________
Mitchell J. Sikora, Jr.

Justice of the Superior Court
Dated:
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Type of service:
Writing from scratch
Work type:
Essay (any type)
Subject or discipline:

Law
Title:
Agent or Vigilante?
Number of sources:
0
Paper format:
MLA
# of pages:
2
Spacing:
Double spaced
# of words:
550
Paper details:
Read the case Bosse v. Brinker Restaurant Corporation, d.b.a.
Chili's Grill and Bar and write a 500 word short paper essay
explaining why you think the plaintiffs even sued Chili's. What
is the law of agency as it applies in this case? Do you think the
court reached the proper result? Why? Do you think it was
ethical for the plaintiffs to sue considering the fact that the
injured parties were essentially stealing from Chili's when the
accident occurred? Do you think they should instead sue the
restaurant patron who followed them up until the point of the
accident (assuming they could find him)? Would the result in
that case (against the patron) be different?
Mentions facts twice and cites source
Correctly explains the law of agency including creation and
liability for torts
Presents both sides of the argument concerning the creation of
an agency and then gives an opinion.

Chapter 30 Liability of Principals, Agents, and Independ

Chapter 30 Liability of Principals, Agents, and Independ

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