MGMT 311 Final Exam 2025

What is an agency relationship? - Correct Ans-A relationship between two parties where one party (the AGENT) agrees to represent or act for the other (the PRINCIPAL) What do the agent and principal do for each other in an agency relationship? - Correct Ans-Principal has a right to control the agent's conduct in matters entrusted to the agent and the agent will act on behalf of an instead of the principal in negotiating and transacting business with third parties What is a corporation in an agency relationship? - Correct Ans-Employees are AGENTS to the corporate PRINCIPAL EX: A CEO is still the agent to the corporation such as Macy's What does "fiduciary" mean when referring to an agency relationship? - Correct Ans-a person having a duty created by their undertaking to act primarily for another's benefit in matters connected with the undertaking (the relationship is founded on trust and confidence) Does agency or employment law have a broader reach? Why? - Correct Ans-Agency because agency relationships an exist outside of an employer-employee relationship. Agency law is common law and employment law is statutory (EX time & 1/2 for overtime) What is an independent contractor? - Correct Ans-Someone who works for, and receives payment from an entity similar to an employer, but whose working conditions and methods are not controlled by an employer Is an independent contractor an employee? - Correct Ans-No, but they are almost always an agent What questions do the courts consider when deciding if someone is an employee or independent contractor - Correct Ans-1. How much control does the employer exercise over the details of the work (MOST IMPORTANT) 2. Is the worker engaged in an occupation or business distinct from that of the employer 3. Is the work usually done under the employer's direction or by a specialist without supervision Who owns copyrighted work created by an employee for an employer? - Correct Ans-it is deemed a "work for hire" and the employer owns the copyright Who owns copyright work created by an independent contractor for an employer? - Correct Ans-The independent contractor owns the copyright Why do state and federal governments work hard to classify workers as employees? - Correct Ans-Loss of tax revenue What are the four ways an agency relationship can arise? - Correct Ans-1. Agreement of parties 2. Ratification 3. Estoppel 4. Operation of law What are most agency relationships based on? - Correct Ans-Agreement that the agent will act for the principal and that the principal agrees to have the agent so act What three ways can you create agency by agreement? - Correct Ans-1. Express written contract 2. Oral agreement 3. Implied by conduct What does it mean when an agent acts outside the scope of their limited authority? - Correct Ans-the agent is performing actions or making decisions that go beyond the powers granted to them by the principal What happens when an agent makes a contract on behalf of the principal while acting outside the scope of their limited authority? - Correct Ans-The principal is not bound to it How do you create agency by ratification? - Correct Ans-An agent makes a contract outside the scope of their authority and the principal later approves or affirms it, therefore ratifying it How do you create agency by estoppel? - Correct Ans-When a PRINCIPAL causes a third person to believe that another person is the principal's agent and the third person acts to their detriment, the principal is "estopped" (prevented from) denying the agency relationship How do you create agency by operation of law? - Correct Ans-When there is an issue such as family relationships or emergency situations What 5 duties does the agent owe the principal? - Correct Ans-Performance, notification, loyalty, obedience, accounting How does the agent owe the principal the duty of performance? - Correct Ans-The agent will act with REASONABLE diligence and skill when performing the work (reasonable person test) How does the agent owe the principal the duty of notification? - Correct Ans-Agent is required to notify the principal of all matters that come to their attention concerning the subject matter of the agency ***law ASSUMES the principal is aware of information acquired by the agent REGARDLESS of whether or not the agent actually passes info to the principal How does the agent owe the principal the duty of loyalty? - Correct Ans-agent has duty to act solely for the benefit of their principal and not in their own interest or someone else's must ALSO keep agent's confidential info CONFIDENTIAL How does the agent owe the principal the duty of obedience? - Correct Ans-Agent has a duty to follow all LAWFUL and CLEARLY STATED instructions of the principal ***even if it violates personal beliefs How does the agent owe the principal the duty of accounting? - Correct Ans-agent must keep and make available to the principal an account of ALL property and funds RECEIVED and PAID out by the agent on the principal's behalf ***duty to maintain a separate account for the principal's funds and must not intermingle them with their own What is employment at will? - Correct Ans-common law doctrine under which an employer can terminate an employees employment at any time, for any reason, with or without notice What are the exceptions to why an employer cannot terminate someone's employment under the employment at will doctrine? - Correct Ans-A WRITTEN contract that specifies otherwise or the employment termination would violate a federal or state statute What is the common law exception to the at will doctrine - Correct Ans-You cannot fire someone for their refusal to commit an illegal act What does the fair labor standards act do? - Correct Ans-requires that certain employees be paid a minimum wage and overtime of 1.5 times their normal rate per hour if they work over 40 hours in one week, also protects children when working What type of employees does the FLSA count when requiring a minimum wage? What is the minimum wage? - Correct Ans-Blue collar; $7.25/hour What employees are exempt from the FSLA's overtime provisions - Correct Ans-- executive, administrative and professional employees - outside salespersons - those who create computer code How much is an employer required to pay if that amount plus tips received equals minimum wage? What happens if it doesn't? - Correct Ans-$2.13, the employer has to pay the difference if it doesn't equal $7.25