As A Small Business Owner, You're Faced With Rising Costs ✓ Solved
As A Small Business Owner You Are Faced With Rising Costs Particular
As a small-business owner, you are faced with rising costs, particularly employment costs, insurance, and the like. You decide to hire some friends and pay them as they work rather than go through the expense and procedure of bringing in “actual†employees. Your friends wear the business uniform, deal with vendors and customers, and tell friends and family that they work for the business. In one instance, one friend orders way too much from a vendor. Explain agency law terminology and the three ways an agency relationship is created, per the text reading.
What are the implications of agency law that apply in the above scenario? Is your business liable for the improper order? Why or why not? Be sure to explain the scope of employment. Explain the applicability of the employment-at-will doctrine and identify and explain all the exceptions.
If your employer does not like your hairdo, can he fire you? Pursuant to the doctrine, explain your answer per the law.
Sample Paper For Above instruction
This paper explores the application of agency law in the context of small business operations, focusing on the creation of agency relationships, liability issues, employment doctrines, and employment terminations based on personal characteristics such as hairstyle. Through analytical discussion, the paper aims to clarify the legal principles relevant to small business owners in managing employee relations and minimizing legal risks.
Introduction
Small business owners often face various legal considerations when establishing employment relationships and managing staff. The decision to hire friends as independent workers rather than formal employees introduces specific legal issues rooted in agency law, liability, and employment doctrines. Understanding these legal principles is essential for small-business owners to navigate potential risks and ensure compliance with applicable laws.
Agency Law and Its Creation
Agency law governs the relationship whereby one party (the principal) authorizes another (the agent) to act on their behalf. The key terminology includes the principal, agent, and third parties. An agency relationship can be established through three primary methods: consent, a fiduciary relationship, and the creation of an agency by ratification.
- Consent: Both parties agree to the agency relationship, either explicitly through written or oral agreement or implicitly through conduct indicating acceptance.
- Fiduciary Relationship: A relationship involving trust and confidence, such as that between a business owner and an employee or agent, where one party acts for the benefit of the other.
- Ratification: The principal approves an agent's unauthorized acts after the fact, thereby creating an agency relationship retroactively.
In the scenario, your friends acting as agents of your business are likely established through implicit consent, given their uniforms and engagement with vendors and customers, which indicates their authority to act on behalf of your business.
Implications of Agency Law in the Scenario
The primary concern is whether the business is liable for the actions of its agents, particularly in cases of improper orders. Under agency law, liability depends largely on the scope of employment, which defines whether the agent's actions fall within their authorized duties.
If the friend who ordered too much was acting within the scope of their employment—e.g., related to their role in dealing with vendors—the business is generally liable for the order, including any improper or excessive purchases. Conversely, if the friend acted outside the scope, such as for personal purposes, liability may not extend to the business.
This distinction emphasizes the importance of clear boundaries and understanding of scope when assigning tasks to agents, especially informal ones.
Scope of Employment
The scope of employment encompasses acts performed within the authorized duties of an agent or employee during the course of employment. It considers whether the act is of the kind the agent is employed to perform, whether it occurred within the authorized time and geographic area, and whether it was motivated, at least in part, by a purpose to serve the employer's interests.
In the scenario, if the friend ordered excess goods as part of their role in handling inventory or vendor relations, the action likely falls within the scope, rendering the business liable. However, if the order was impulsive or outside their typical duties, liability becomes questionable.
Employment-at-Will Doctrine and Exceptions
The employment-at-will doctrine allows employers to terminate employees at any time for any reason, except for illegal reasons, or if there's an employment contract specifying otherwise. This doctrine provides flexibility but also risks potential abuse or wrongful termination claims.
Exceptions to employment-at-will include:
- Public Policy Exception: Employees cannot be fired for reasons that violate public policy, such as refusing to commit an illegal act or exercising a legal right.
- Implied Contract Exception: When an employer's statements or actions imply a contract that limits the ability to fire at will.
- Good Faith and Fair Dealing Exception: In some jurisdictions, terminations made in bad faith or motivated by malice may be deemed wrongful.
Applying these exceptions, if an employee with a personal attribute, like hairstyle, is otherwise fulfilling their duties, firing based solely on appearance may violate public policy or imply breach of implied contract, depending on state law.
Can an Employer Fire You for Your Hairdo?
Generally, under employment law, an employer can terminate employment for reasons related to appearance if such policies are non-discriminatory and uniformly applied. However, if firing based on hairstyle infringes upon protected characteristics—such as race, religion, or gender—it may constitute discrimination under laws like Title VII of the Civil Rights Act.
For example, banning certain hairstyles associated with particular racial or cultural groups could be deemed discriminatory. Conversely, grooming standards related to professionalism are typically permissible if applied consistently and neutrally.
Therefore, unless the hairstyle violates a neutral grooming policy or is linked to a protected characteristic, the employer may lawfully terminate employment based on hairstyle. However, legal challenges may arise if the grooming policy disproportionately affects certain groups.
Conclusion
In summary, agency law provides a framework for understanding liability when informal relationships have formal business implications. The scope of employment determines the liability of the business for actions taken by agents or employees. The employment-at-will doctrine offers flexibility but is subject to specific statutory exceptions, especially when personal attributes are involved. Small business owners must carefully consider these legal principles to mitigate risks and ensure compliance with employment laws.
References
- Arnold, K. A., & Bashaw, R. (2019). Business law and the legal environment. McGraw-Hill Education.
- Cheeseman, H. R. (2021). Business law: Legal environment, online commerce, and dispute resolution. Pearson.
- Holland, J. C., & O'Neill, M. (2020). Employment law for human resource practice. McGraw-Hill Education.
- Kallen, R. (2017). Agency law and its application in modern business. Harvard Law Review.
- Legal Information Institute. (2023). Agency law. Cornell Law School.
- Martyn, R. G., & Whitten, S. A. (2020). Employment law and practice. Routledge.
- Mitchell, J. F., & Heggie, C. (2018). The employment-at-will doctrine: An overview. Journal of Employment Law.
- Smith, T. J. (2019). Discrimination and grooming policies: Legal considerations. Employment Law Journal.
- U.S. Equal Employment Opportunity Commission. (2022). Guidelines on grooming and appearance policies.
- Williams, S., & Clark, P. (2020). Small business legal issues: Agency relationships and liability. Business Law Today.