1. Common Law Rules in Employer-Employee Relations
Chapter 14
Common Law Rules in Employer-Employee Relations

2. Employer-Employee Legal Classifications
Master-servant relationship
One person employs another in tasks not involving contracts
Principal-agent relationship
One person employs another to contract with third persons
Employer-independent contractor relationship
One person hires another and has no control over how the contractor performs the work

3. Effect of Employer-Employee Classifications
Respondeat superior
Nondelegable duties
Consensual relations
Gratuitous agent

4. Types of Agents General agent Del credere agent Special agent
Has authority to act on another’s behalf in many different matters
Del credere agent
Sells goods for another on credit and guarantee that agent will pay if buyer does not
Special agent
Accomplishes particular tasks

5. How Agency Authority is Created
Express authority
Agreement in writing
Implied authority
Agreement by inference
Apparent authority
Agreement by conduct
Ratification
Agreement conferred retroactively

6. Common Law Duties Master-to-servant Provide safe work place
Provide safe tools
Reasonably pay servant

7. Common Law Duties Principal-to-agent Pay agent specified amount
Advance money if the contract provides for it
Reimburse ordinary expenses
Indemnify agent for losses sustained while agent performs tasks
Duty of care

8. Common Law Duties Agents-to-principals Duty to account
Duty to use care and skill
Duty to follow instructions
Fiduciary duty

9. Agent or Servant Liability: Torts
Indemnity
Respondeat superior principal
Scope of employment
Distinction between where agent’s responsibilities end and duties begin can be difficult to ascertain

10. Agent Liability to Third Persons: Contracts
Agents may be subjected to liability to third persons with respect to contracts in three ways:
On the contract
For the tort of fraud
For breach of warranty of authority

11. Liability for Crimes Employee liability Employer liability
Criminal conspiracy
Corporate employers
Respondeat superior
Superior agent rule

12. How Agencies End
Voluntary completion of the tasks for which agent was hired
Death of principal or agent
Insanity of principal or agent
Bankruptcy of principal
Physical incapacitation of agent
Illegality of activities for which the agent was hired

13. Ending of Employment Relationship: Employment-at-Will
Wrongful dismissal lawsuits in general
Employee actions causing wrongful dismissal
Legal limits on wrongful dismissal
Notice of ending of agency

14. Recap – Terms to Know Employer-employee legal classifications
Respondeat superior
Nondelegable duties
Consensual relations
Gratuitous agent
General, del credere, and special agent
Express, implied, and apparent agency
Indemnity
Respondeat superior principal
Employment-at-will