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School: University of Texas at Arlington
Department: Business
Course: Legal Ethical Business Environment
Professor: Charles miller
Term: Summer 2015
Tags: Miller, blaw, test, 3, study, guide, Legal, Ethical, business, Environment, and Blaw3310
Cost: 50
Name: BLAW 3310 Test 3 Study Guide
Description: Here is the study guide for test 3. Study Well! Thanks, Josh joshua.radcliff@mavs.uta.edu 214-883-1428
Uploaded: 11/08/2015
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Josh Radclif

What is Partnerships?

Test 3 Study Guide

BLAW 3310

Dr. Charles Miller

October 19, 2015 – Chapter 12 

∙ Business Organizations and Entity Selections – Which format of business  should I choose to set up?

∙ Pg. 309 Sole Proprietor – Simplest way to do business

o You are the sole owner of the business

o Assumed Name Certificate – Not the legal name of the business but the name that you can call your business and the name everyone knows  your business by.

o You take all the benefits, risks, profits, losses, etc.

 Food services, floral shops, and delivery trucks are all risky  


o Respondeat Superior – People in an employer-employee relationship… Employee causes some harm to someone, but the employer responds  to the problem or the employer is the one who is sued.

o Sole Proprietor is best when you are running a very safe business  without much risk

what is Business Judgment Rule?

∙ Partnerships – Two or more principle owners

o ***Pick a good partner!

 People with complementing skill sets can usually be the best fit o Advantages: The partnership is a separate entity from each other.   Risk is shared If you want to learn more check out tcu mgt

 At its strongest when partners can collectively come to the same decision

o Each partner gets a portion and equal share and say so in the company unless otherwise stated in the agreement

o Uniform Partnership Act – Lets you know how to create a formal  document for a partnership. We also discuss several other topics like tctc password reset

o Partners can have multiple positions in the company so they could be a partner and also the manager.  

o Bad thing about a partnership

 When partners don’t follow fiduciary duty, and they aren’t fair or honest with each other, etc.

 LOYALTY. Always a concern about the partner not being loyal to  you or the company.  

what is Fiduciary Duty of Loyalty?

We also discuss several other topics like senerate

 Pg. 311 Zhou v. Bickley – Can’t separate and carry on making a  new business directly rivaling old business Don't forget about the age old question of soup world potsdam

∙ Bickley and Zhou signed a lease on a building together  

and Bickley opened up a motorcycle repair shop, and  

when Zhou asked for keys to the building or receipts or a  

written agreement for the money Zhou lent Bickley,  

Bickley refused to give it to him claiming they were

breaching the contract they had entered with each other  

by demanding their money back that they had given  


∙ Bickley lost the case because they were never in a real  

partnership because they didn’t go through the proper  

steps necessary. Instead, Bickley was operating under a  

sole proprietorship and Zhou was just an investor. Zhou  

won the case.

o Limited Partnership – Have several partners where one or two people  are in charge while the rest of the partners have limited partnership.  Limited partnership typically only puts in money and isn’t  involved any other way

 Limited partners only lose the money that they put into the deal. If the company sufers losses or lawsuits, the limited partner is  only liable up to what they put into the company

 How many general partners do you have to have in a limited  partnership, and how many limited partners do you have to  


∙ At least one general partner and at least one limited  

partner, so there is always someone who can take the  


∙ Pg. 316 Corporation – The business is a separate entity We also discuss several other topics like psyc 1000 midterm

o The entity shields the individuals from liability  

o Have to file paperwork and state your desire to be a corporation  File a certificate of incorporation Exhibit 12.2

∙ Have a name of the corporation and include “corp.” or  

“inc.” at the end of your name

∙ Have to say where the registered office is that made you  

a corporation

∙ Have to have a Registered agent who is someone who  

receives the lawsuit on behalf of the corporation

∙ Have to put the purpose of the corporation

∙ Have to have shares of stock (ownership and equity)  

o Minimum of one share and one shareholder

o Shareholders own the business

 Problem: There can be an unlimited number of shareholders  Shareholders elect representatives to sit on the board of  

directors (usually 3-30 people) who then decide who to hire as  employees

∙ Shareholders  Board of Directors  Employees 

∙ People can wear multiple hats, so employees could  

become shareholders if they wanted, which gives them  

more invested interest in their own company, and it’ll  

make them work harder

 Inside Directors can be people tied up in the company

 Outside Directors are those sit on the board and give opinions  and help make decisions but don’t actually work for the  We also discuss several other topics like artemis rape


October 21, 2015 – Chapter 12 

∙ Pg. 326 Exhibit 12.3 Compares major forms of business organizations o Proprietorship, partnership, corporation, and limited liability company ∙ Pg. 318 Business Judgment Rule – This makes the directors and managers of  a business immune from liability when problems result from their honest  mistakes in judgment.

o In other words, they can’t be sued for making a bad business decision  for the company

∙ Fiduciary Duty of Loyalty – Directors must be loyal to the company and put its interests over their own.

∙ Pg. 320 Managers are typically the only employees who have written  contracts.

o Why single these people out?  

 These are the people who add value to the companies, so  

companies want to keep them on board.

∙ Types of Corporations

o Closed Corps – Owned by only a handful of people; private, so you  cannot buy stock

 Usually below 35 members

o S Corps – Typically corporations pay tax on their income and then when they pay dividends to shareholders, the shareholders are taxed for  their personal income too. Essentially, so double taxation occurs. BUT  S Corps DON’T have corporation income tax.

 They also ofer only one type of stock and usually have less than 100 shareholders

o Professional Corps (PCs) – Corporations made up of a group of people  in a certain profession such as a bunch of doctors getting together or  lawyers, etc.

o Pg. 322 Limited Liability Corps (LLCs) – A combination of partnerships  and a corporation; no shareholders, only members; taxed only on  owners, not on the company; personal liability is avoided as well.

 Need a FEIN, or an operating agreement, and they can last as  long as they are successful

∙ Pg. 329 Franchise – A business model, not a corporation

o Any business can be a franchisee

o All of it is written in a franchise agreement

o The Franchisor is concerned that the new buildings are run properly  and make profits

o The Franchisee has to decide whether or not it will be good for them to  become a franchise

o Scams – People have pretended to sell a business model to someone  who wants to be a franchisee then once they pay the fee to become a

franchisee, they realize that the business model does not even exist or  is not successful at all

o Types of Franchises

 1) Product Distribution – Franchisee has the right to sell the  

product of the parent company

∙ Ex: Those little car dealerships you find on the street  

corner selling all sorts of diferent brands of cars even  

though they don’t work for any of those car companies

 2) Business Franchise – Must pay a fee to be a franchisee, then  you usually get a geographical area to maintain, and you must  

do it how the franchisor tells you to do it. Just like opening up  

and running several Applebee’s in the El Paso / West Texas area  3) Trademark / Tradename Licensing – The franchisee has license to market the company’s brands

∙ Ex: They can advertise for Coca-Cola all around their store

∙ Summary on Page 334 is very good…highly recommend!!!

October 23, 2015 – Chapter 13 

∙ Pg. 339 Negotiable Instruments – Function as a substitute of cash like a check o Uniform Commercial Code (UCC) defines what quantifies as a  negotiable instrument

o Checks: the drawer writes the check and the drawee is the bank. The  payee receives the check

o Cashier’s Check – guarantees that the bank has the money written on  the check so the payee is assured that the drawer has all the funds,  and the check definitely will not bounce

o Pg. 344 Promissory Notes – A promise to pay later. It buys time for the  person to pay at a future date.  

 Also pay interest rates when you write a promissory note; if you  don’t pay any of your payments on the designated date, the rest of the debt becomes due immediately

 Prepayment without penalty clause – If you pay of your debt  early, you have to still pay the initial interest that was expected  Promissory Notes are good because they are in writing, so it’s  proof if the person does not pay.

o Pg. 345 Certificate of Deposit (CD) – Customer deposits money in the  bank and the bank promises to pay the customer interest on this  money  

 The bank then takes this money and loans it out to other people  and charges them an even higher interest than what they are  

paying the original depositor. That way the bank makes some  

money out of it.

 It’s a very safe deposit but the only risk is that you can’t get that money back early unless you give up all of the interest the bank  was going to pay you.  

October 26, 2015

∙ Check the post on Franchises on Blackboard

∙ Pg. 348 Security Agreements

o Secure Debt – Has collateral attached to it so if they don’t pay the  debt, they can ofer up some other of their assets to pay for their debt o Unsecure Debt – Someone owes you money but you don’t have  anything to cash in on (no collateral) if they don’t pay you

∙ He said to focus on all vocabulary between pages 351-353 in the book  because he is too lazy to explain it and apparently the book does a better job  than he does. So here are the straight definitions of those terms

o Secured Transaction – If a buyer buys goods but does not pay with  cash, the goods the buyer receives acts as an obligation to pay the  seller in the future, so the transaction is secured for the seller.

o Perfection of Security Interest – When a seller gets a claim to take back goods he sells in case the buyer does not pay

o Attachment – when the customer signs an agreement to assure the  seller security interest

o Perfection – Establishes the date that the perfection of security interest goes into efect giving that person priority over other people that the  borrower owes money to

o Tangible Property – Goods that are movable at the time a security  interest attaches or begins

o Purchase Money security Interest – Something the lender obtains  against the seller that gives the lender rights that are superior to other  creditors in the event the borrower fails to meet debt obligations

o Floating Lien – The security interest in any specific item of inventory  ends when the item is sold, but the interest attaches to new inventory o Defaults – Borrower cannot or will not meet payment obligations ∙ Pg. 354 Real Estate Financing

o Mortgage – A loan from somebody to buy a house

 If you don’t pay it back with interest, your house can be taken  away from you by the people you owe money to (most likely the  bank)

∙ Pg. 355 Lien – A security that is obtained by a creditor (lender) through law o Liens protect people who provide labor and services on real estate  without getting paid until they are done with the project. These  services make improvements on the property

 Ex: If you have X amount of time to pay the worker and don’t do  it, he can file a mechanic’s lien on the property, not on the  

owner of the property. The worker can then foreclose on the lien  and get the money owed to him.

o Pg. 357 Possessory Lien – A person does repairs and has a receipt  showing that repairs were done, but then the person doesn’t pay. The  worker can hold the property in his possession until the person pays.  After a certain time, if he doesn’t pay, the worker can advertise the  sale of the item and sell it once the lien becomes official

o Judgment Lien – Once you file for a lien and receive proper judgment to sell the property, you have the responsibility of letting potential  buyer’s know that you are buying this on a lien.

∙ Garnishment – If a person owes you money and won’t pay, you can go to  court to get garnishment

o The court can require the debtor’s work to take of the amount owed to you from the debtor’s next paycheck, up to 28% of that person’s  wages. If the company doesn’t agree to do that, the company will have to pay you themselves.

∙ Pg. 357 Bankruptcy (controlled by federal law)

o People file for bankruptcy because they become insolvent and can’t  pay of their debts

o Most often comes due to housing or medical bills

o Pg. 358 Personal bankruptcy – In Chapter 13 of the bankruptcy code  that states certain requirements you must meet before you are eligible to file for bankruptcy

 Ex: income and means test – must make below a certain amount of money

o Voluntary Bankruptcy – Lists a petition that tells everyone exactly your  true financial status of what you owe and how much you have.  Embarrassing to state all of your debt sometimes.

o Once paperwork for bankruptcy is filed, it goes to a trustee who checks to make sure all the information is correct and qualifies you for  bankruptcy

o Goal of bankruptcy is to get a fresh start with no debt

o Debts that can’t be discharged (forgiven) when filing for bankruptcy is  listed on page 361

 Main things are child support, back taxes, and student loans o Chapter 11 of the Bankruptcy code discusses restructuring a company  and reordering debt to prevent the company from closing down  completely

 Ex: Barnes and Noble was doing poor in 87 of its 200 stores. So  they reorganized the debt onto the other stores who could pay it and shut down the 87 stores that were failing.

 Ex: American Airlines filed for bankruptcy because they struck  deals with tons of diferent labor unions and realized they  

couldn’t pay for all of the deals they agreed to.  

∙ Under Chapter 11 of the Bankruptcy code though, they  

were able to take this issue to court, and the court had  

the ability to reject union contracts and renegotiate them  

so American Airlines wouldn’t sufer from bankruptcy.

October 28, 2015 – Chapter 14 Employment Relationships 

∙    Agency Relationship – The principal hires an agent to interact with a third  party on behalf of the principal. As to what extent of what the agent has  power to do depends on the type of agency agreed upon with the principal.

∙    People become agents through official documentation called power of  attorney contracts.

∙    Types of Agents

o 1) pg. 376 Universal Agents – This agent can do all acts that are legally granted to agents. Universal agents have a broader range of power  than any other agents.

o 2) General Agents – They can execute all transactions on behalf of a  business, but not an individual

 Their responsibilities could be limited though if it is mentioned in the contract.

∙    Implied or Express Ratification – When an agent does something beyond  his/her power, but you give a verbal okay, the agent’s action is implied to be  acceptable.

∙    Agency by Estoppel – When no formal agent exists but a person is acting on  all cylinders like an agent. Basically there is no official contract making that  person an agent.

∙    Agency by Operation of Law – Someone becomes an agent to act on  another’s behalf when an emergency exists

o Ex: having medical power of attorney

∙    Acts for the Principal

o Actual Authority – When you sign a power of attorney contract, you  give the power of actual authority. Basically actual authority gives the  right of action from the principal to the agent.

o Apparent authority – You don’t need to show the third party official  documentation that you are an agent and can act on behalf of the  principal. When the agent shows up and just starts to act as if he is  making decisions for the principal, it is implied that this agent has  apparent authority.

∙    Pg. 380 Principal Duty to an Agent

o Duty to Indemnify – The principal is responsible for damages the agent  sufers if the agent was operating under the agreed terms

∙    Agent’s Duties to a Principal

o Fiduciary Duty to a principal- The agent is responsible for acting loyally  and putting an honest efort into the job required of him/her.  

∙    Termination of an Agent is simply done in writing.  

∙    Pg. 385 Employment Relationship – Master over Servant 

o The master is the employer and the servant is the employee.  o The master is responsible for acts of the employees that fall under  their scope of business

o Pg. 393 Tort Liability – Respondeat Superior 

 The master is indirectly/vicariously responsible for actions of  servant

 Ex: John Hopkins hospital had an employee who delivered  babies. Over 12 years, he was secretly taking video through a  pen in his shirt pocket. He got caught, and John Hopkins Hospital put $190mil aside to give to woman who filed suit and were  

videoed because they were responsible for the employee’s  

actions via respondeat superior

o Diference between an independent contractor and an employee  (servant)

 Independent contractors are not servants because their actions  aren’t controlled by the master.

∙    Servants on the other hand are hired to follow the orders  

of the company and the master

 Independent Contractors on the other hand are given a task to  do by the master, but they can complete the task as they  


 Companies like independent contractors because they don’t  have to pay taxes on their wages, and they don’t have to pay for their employee rights.

October 30, 2015 

∙    Date for the makeup test is December 9

∙    Review of Respondeat Superior – When an employee does something outside  the scope of the company, the company cannot be sued

o Armstrong v. Food Lion – Pg. 395

 A Food Lion employee is on break and walks out into the parking lot only to see Armstrong, someone he has a personal grudge  

against, and Armstrong’s mother. The employee beat the crap  

out of Armstrong, so Armstrong sued Food Lion.  

 Food Lion argues that the employees were not doing business on behalf of the company. They were on break and not performing  Food Lion services.

 Respondeat Superior protects Food Lion from this law suit

o Pg. 396 Cases - ***Be able to compare and contrast these cases with  the Armstrong case

 Confused because there are no cases on page 396…

 Distinguishable case – When a prior case is deemed to be  

diferent from a current case so the decision from that case  

cannot apply to the current case at hand.

 Negligent Hiring – When torts are committed by an employee  who is not acting in the scope of employment

 Is a servant within his scope of employment when he beats up  the third party and commits a tort?

∙ Ex: Susy steals a company car and wrecks it; is the  

company responsible?

∙ No because these employees (servants) are not acting in  

their scope of employment.  

o Master is not responsible for an independent contractor

 Ways to determine the diference of independent contractor vs.  employee

∙ Control Test – If the master can control how the individual  

does the work, the person is then an employee

∙ The more control a master has, the more likely it is the  

person is an employee

∙ Ex: A master spends $100 on an independent contractor  

when his work earns him $100. When an employee’s work

earns him $100, it costs the servant $107.65 because of  

the income and Medicare matching taxes the company  

has to pay.

∙ Independent contractors usually charge more than what it would cost an employee because they have to pay the  

income and Medicare tax for themselves and the tax the  

company would have to pay if they were an employee, so  

they are double taxed.

∙ Pg. 391 Employee Handbooks – Has lots of disclaimers to say that people are  not employees

∙ Pg. 388 Employment at will – when you are an employee, your job is never  permanent. You can be fired at any point in time for no reason at all should  the master choose.

∙ When you are a master who sings a lease or signs anything for a company,  sign your name with your title of position in the company so the contractor  knows you are signing on behalf of the company and the company will pay  what is due.  

o If you don’t sign with your title, the contractor can put together a case  that says you were expected to pay what was due yourself.

∙ Chapter 15 Employment and Labor Regulations 

∙ Public Policy for employers at will

o Employees can be fired for any reason at all

o Pg. 402 Exceptions to people being able to be fired for any reason at all  Unlawful Act – When you refuse to do something the company  asks you to do because it is illegal, and the company fires you,  you can sue for unlawful firing

∙ Ex: Guy works on a boat in Corpus Christi, and his  

employer tells him to dump illegally. He says no and is  

fired. He sues the boat company and wins on wrongful  


 Performing a Public Duty – If you are assigned to jury duty or  military service, and you miss work, you can’t be punished for  that

 Whistleblower – Someone who tells the government about the  unlawful actions a company is taking

∙ The government encourages this by employees by  

ofering them about 20% of what the government gets  

back by convicting the company

∙ Pg. 404 Non-Compete Clause 

o Given to high up employers with critical information regarding their  company

o It prevents them from going to another competing company and  working after they leave for a certain amount of time

∙ Anti-Raiding Covenants 

o You are not allowed to leave a company and start recruiting your other  colleagues to come with you and work for a competing business ∙ Substance Abuse – Ridiculously costly for companies

o Estimated $250 billion annually for companies and $150 billion for  employees

o These numbers are what it costs companies and employees  respectively for getting in trouble with drugs and alcohol

November 2, 2015 

∙ Read Amazon Case on Blackboard

∙ Pg. 406 Substance Abuse Testing

o Pre-employment testing – testing someone for drugs before they are  hired

 What if medications or second-hand smoke causes a test to be  positive? No answer, just a question to ponder…

 People argue this test is an invasion of privacy

∙ Pg. 408 Worker Health & Safety  

o Government passed the Occupational Safety and Health Act (OSHA)  Were able to do this using the interstate commerce clause

 OSHA passes regulations about workplace safety

 Exhibit 15.1

 They can inspect businesses and fine them for not following the  laws

 Worker Compensation

∙ If someone is injured on the job, they need to be paid  

while they are out

∙ Pg. 412 – You must prove the injury happened at work

o Are carpel tunnel, diabetes, or a car accident while  

you were on a work trip but taking a detour to visit  

a friend covered by worker compensation? More for

us to ponder.

∙ FMLA – If you work for the government or for a business  

with over 50 people, you get the right to leave from your  

job and come back if it is for a reasonable cause

o Ex: giving birth to a child

∙ Pg. 417 General Regulation of Labor Markets

o People must prove citizenship or have an I9 if they are an immigrant to work

o If the company hires you but can’t prove you are allowed to be  working, they have to pay a big fine.

∙ Pg. 418 Minimum Wage and Tax requirements

o FLSA – Fair Labor Standards Act sets the wage at $7.25

o Why is a minimum wage good? It puts money in people’s pockets to  spend in the economy

∙ Occupational Licensor – You have to have a license to work certain jobs o Ex: lawyers, doctors, etc must have a license to practice

∙ Companies must give their employers sufficient notice when they are going  to make job cuts or close the business

o Called the WARN notification act.  

∙ Retirement Plans – Employee Retirement Income Security Act (ERISA)

o 1) Define Benefit Plan – You can take money out of your check and put  it in your retirement fund, and they company will put a certain amount  in there as well based on your salary and length of service with that  company

o 2) Define Contribution Plan (most common) – You can have the  company take money out of your check and put it in your 401k, and  they will match that amount up to a certain point

∙ Severance Plans (When you get fired)

o It determines how much and how long you are paid after getting fired o It’s a formula that each company derives

o Why would they want to do this?

 Because you sign papers when you receive a severance plan  that prevents you from suing the company

o You can choose to deny the severance plan and not take any money  from them.

November 4, 2015 

∙ Pg. 422 Labor Organizations (Unions) – All in the private sector o Labor vs. Capital; employees vs. employers

o Employees get together to form unions to negotiate better wages and  benefits with their employers

o The best weapon the employees have if the employers don’t listen is to start a strike

o Norris La Guardia Act 1932 – It prevents employers from issuing  injunctions with the courts regarding unions

 In other words, they can’t refrain their employees from  

participating in a union

 This Act banned Yellow Dog Contracts, which said you could not  participate in a union.

o Pg. 425 National Labor Relations Act – These are the laws employees  must follow to form labor organizations

 Led to the formation of the National Labor Relations Board  

(NLRB) – These people are the organizers and leaders of unions

∙ NLRB act as the referees in the negotiations between  

employers and employees in case of penalties, which are  

called unfair labor practices

 Employees get authorized cards when they agree to join a union, and the labor organization becomes official when 51% of the  

employees an authorized card

 Representative Election – When the company thinks that the  labor organization is a scam and less than 51% of the employees really wanted to join, the company can call for a vote so the  

employees can determine if 51% or greater really do want to  

join a union. If yes, the NLRB will represent them

o 14% of the workforce are currently in labor organizations

o Pg. 428 Collective Bargaining – When the union and employer  negotiate for a new deal

o What if you can’t bargain a deal? You go on strike

 What do employers do when you go on strike?

∙ They hire replacement workers

∙ They could also lock out the employees and shut down  

the company

o Pg. 430 Boycott – We all know that means just to refrain from doing  something, which is what some unions choose to do.  

 Secondary Boycotting is when you convince another company to stop doing business for the company they are striking against ∙ Good Cause – When an employer disciplines an employee, there must be  good cause behind it. If the employee doesn’t think he/she did anything  wrong, an arbitrator can come in and make the decision

∙ Chapter 16 Employment Discrimination 

o What is discrimination?

 Can often be used as a positive term. It’s simply choosing one  thing over all of the other things.  

o The Civil Rights Act of the 1960s actually discusses employment  discrimination in Title 7 

 Pg. 437 The most common discriminations are:

 Race, color of skin, nationality (place of birth), Religion, and  gender

 Federal government can enforce this act via the Interstate  Commerce Clause

 It only qualifies for companies over 15 people unless state law  says otherwise (California law says this law applies to all  

companies with at least 1 employee)

 Sex Discrimination

∙ Pg. 440 Sexual Harassment – Unwelcome sexual  

advances, requests for sexual favors, and other verbal or  

physical conducts of a sexual nature

o 1. Quid Pro Quo “This for that”

 Do these sexual acts with a boss in order to  

keep a job or avoid punishment

 The only evidence is typically he said, she  

said; one person’s word against another’s.

 If employees quit then file a charge for  

sexual discrimination, the company can still  

be at risk because she was forced to quit on  

conductive discharge

 Yahoo case he gave us. It’s really just trying  

to find proof of whose word is right.  

o 2. Hostile Environment 

 Harris v. Forklift Systems 

∙ The boss called Harris dumb and said  

her job as a rental manager should be  

done by a man because they are  

smarter. He told her to negotiate her

contract with him at a Holiday Inn. He  

threw coins on the ground and made  

her pick them up and made sexual  

comments about her clothing. She  

sued him for hostile environment and  

the court decided with Forklift  

Systems, the defendant but it was  

reversed in Harris’ favor in the  

appellate court.

 The Harris case begs the question:

∙ How many instances of crude  

treatment are required to take it from  

being annoying to being harassment?  

How much is too much?

∙ The answer to this has to lie in  

providing as much detail to the case  

as possible.

o Pg. 439 Cyber Law 

 There is no right to privacy when you are on a company’s  computer or server

 If there are naughty jokes circulating in the office email, the  employer who owns the server is responsible.

 Typically harsh words or jokes aren’t enough to make someone  guilty

o Equal Employment Opportunity Commission (EEOC) 

 Federal agencies write rules on employment discrimination, and  they enforce it.

 You have 180 days to file an employment discrimination cause  once the event happens

 The EEOC screens each employment discrimination case that  comes in and decides whether or not there’s an actual cause for  discrimination or not. This prevents a lot of cases from getting to the actual court to keep the amount of suits manageable.

∙ If there is cause for discrimination, you get a ticket, and  once you get a ticket, you officially have the right to sue  the other party within 90 days.  

 Good of EEOC

∙ It limits the number of people able to file for suits

 Bad of EEOC

∙ The defendant’s lawyer doesn’t like it when the EEOC has  the power to issue a ticket because if the EEOC issues a  ticket, that means they think that discrimination occurred  and the court will take that into consideration when  

making their decision. So it makes it harder for the  

defendant to win.

o Pg. 445 Disparate Treatment Exhibit 16.2– A way to prove employment  discrimination when an employer does not act the same from one  employment to the next

 Must pass the McDonnell-Douglas Test 

∙ 1. Plaintif must belong to a certain class (i.e. black, Jew,  etc)

∙ 2. The employee must be meeting all job requirements ∙ 3. The employee must have been mistreated in some way (disparate impact)

∙ 4. This treatment was due to discrimination

∙ THEN the employer must prove that his/her decision was  fair and nondiscriminatory

∙ THEN the plaintif must rebut that and prove how it was  discriminatory  

o Business Necessity – Are the qualifications posted for a certain job  actually necessary for doing that job?

 Ex: It is not legal to have in the job description that a  qualification for a secretary position is to be able to bench press  200 pounds. That is discriminatory because that skill does not  even apply to the job at hand.  

o Defenses for Disparate Treatment

 1) Pg. 452 Bona Fide Occupational Qualification (BFOQ) – When  it’s okay to pick one type of people over another

∙ It can apply to any stereotype except race.

o Ex: It’s okay to hire only female models to model  

female clothing

o Ex: It’s okay to require a priest to be Catholic  

before hiring him in the Catholic Church

 2) Collective Bargaining Agreement (CBA) – When terms are  agreed upon collectively and written in a contract, any  

discriminatory act may be okay.

∙ Ex: Unions may strike an agreement with employers that  say that people who have been in the company longer  

deserve a higher pay than someone who just started even if they are working at a similar position.  

o Because the union agreed upon it with the  

employers and because it is in writing, it is fine.

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