Debtor/Creditor Relations, Agency, and Employment
Question
Assignment Overview
In this assignment, you will be presented with a variety of hypothetical scenarios. For each scenario, you need to explain the reasoning behind your answer and use at least one reference from the background materials to support each answer. You are free to cite additional sources that are not included in the background materials. However, any citation should be from credible sources such as articles from ProQuest or textbooks from Ebrary rather than random web pages. Your paper should be a minimum of 4 full pages (excluding title and references pages) and include a minimum of 3 scholarly sources.
Case Assignment
You own and operate a full-service 24-hour auto repair shop—the only 24-hour shop in your town. In fact, you are pretty sure it is the only 24-hour auto repair shop in the state. Your business is now a success, but you had a lot of trouble initially finding an auto mechanic willing to work the late shift. You are now concerned that this mechanic could leave you at any time and open—or help someone else open—another 24-hour shop. You decide to ask him to sign a non-competition agreement saying that if he ever leaves your shop, he cannot work as an auto mechanic anywhere in your state for the next seven years. He looks at you and says, “Are you out of your mind?” What alternative terms of a non-competition agreement do you think would be more reasonable?
You are the owner of a boutique that sells bathing suits and beach apparel, and you are many months behind on your loan payments to the bank (you owe a total of $100,000). The bank now wants you to hand over all of your remaining company funds to pay back the loan. However, it is mid-April, and the summer season is coming up. That is when you typically do 60% to 70% of your business for the year. If you pay the bank now, you will not have funds to pay the rent or your staff; so, to stay in business, you will need the bank to wait until after the summer season. If you end up needing to file for bankruptcy, which type would be most appropriate for this situation: Chapter 7, Chapter 11, or Chapter 13? Would your answer change if the summer season were over, but you were still unable to pay back the bank loan? Explain your answers.
You are employed by a small college as a special-event planner. For events that you organize, you hire independent contractors to do the audio-visual setup and supply equipment such as microphones, speakers, projectors, etc. On the day of an event, you ask one of your independent contractors to make some last-minute changes to the AV sound equipment. Perhaps under stress by this request, the independent contractor rams into the back of someone’s car on his way to the campus. The driver of the car your independent contractor hit is transported to a hospital by ambulance with neck pain. A few weeks later, the college receives a letter from an attorney demanding payment of medical expenses for the driver of the car your independent contractor hit. Do you think the college will be liable for these medical expenses? Explain your reasoning.
The company you work for is going through some tough times, and your boss has no choice but to let an employee go. Your boss has told you that he is relieved that your business is in an “employment-at-will” state. You know your boss was upset earlier that your co-worker Ann had come late to an important client meeting because she had stopped off to vote on the last election day. The client nearly canceled his order because he felt disrespected by Ann being late, even though she was able to smooth things over when she arrived. Therefore, you are not surprised when you overhear your boss firing Ann and telling her that her termination is performance-based, and the company simply can’t tolerate employees who are deliberately late for important meetings. Is your boss’ firing of Ann legally justifiable? Explain your answer.
Your company makes a popular hot dog relish. The relish is packed in jars and sold in local grocery stores. While you were out of town, the supply of jars was running low, so your factory supervisor took the initiative and placed an order for more jars. Since the jars were absolutely necessary for keeping operations going while you were gone, you happily pay the supplier for the order when you get back. Now the factory supervisor is placing jar orders anytime supplies are low. Even though you never gave him formal permission to do this, you keep paying the supplier. One day you notice that the price of the jars the supervisor is ordering is higher than other suppliers’ prices. You call the supplier and ask for a price reduction because you never authorized the factory supervisor to place orders in the first place. Do you think the supplier might insist on getting his original price even though you say the employee was not authorized to place the order? Explain your answer.
Assignment Expectations
The minimum length requirement for the Module 3 Case Assignment is 4 full pages (excluding title and reference pages). The 4 full pages will include an introduction, a body of work (supported with three scholarly sources), a conclusion, and a References page (see APA 7 template).
Provide a minimum of at least 3 scholarly sources using APA Style.
Provide an APA-formatted title page and use the APA 7th Assignment Template.
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Solution
Debtor/Creditor Relations, Agency, and Employment
Scenario 1
When running a business, it is important to protect your interests. This includes protecting your business from competitors who may try to take advantage of your success unfairly. One way to do this is to have key employees sign non-competition agreements. A non-competition agreement is a contract in which an employee agrees not to work for a competitor of the company they are currently employed by. Non-competition agreements can help protect your business from the unfair competition (Pivateau, 2019). However, while this is an excellent strategy for increasing your ROI, it is critical to ensure that the contract conditions are fair. For instance, If you are worried that an employee might leave your company and start a competing business, you could ask them to sign a non-competition agreement. This would mean that they could not work as an auto mechanic in your state for the next seven years. However, this may be too restrictive, and the employee may refuse to sign the agreement.
A more reasonable alternative might be to ask the employee to agree not to run a competitive business near your company for some time. This would allow them to work as an auto mechanic in another town but still protect your business from unfair competition. It is important to consult with an attorney before having an employee sign a non-competition agreement. This will ensure that the agreement is legally binding and enforceable. For example, an agreement that is too restrictive in terms of geography or period may be deemed unenforceable by a court. An attorney can help you draft an agreement that will be reasonable and enforceable.
Scenario 2
If you cannot pay back your loan to the bank, you may have to file for bankruptcy. The type of bankruptcy most appropriate for this situation would depend on your specific circumstances. If you are behind on your loan payments and cannot pay the rent or your staff, then there is a need for filing for Chapter 7 bankruptcy (Dinterman & Katchova, 2021). This type of bankruptcy is a form of debt relief that allows you to get rid of your obligations and begin again. However, if you are behind on your loan payments but can repay your debt over time, filing for Chapter 13 bankruptcy is important. You may use this approach to restructure your debts and establish a payment schedule if you declare Chapter 13 bankruptcy. If you are a business owner and cannot pay your debts, filing for Chapter 11 bankruptcy is needed. Chapter 11 bankruptcy enables you to restructure your firm while arranging payment terms with your creditors. The type of bankruptcy most appropriate for this situation would depend on your specific circumstances. If you are behind on your loan payments and cannot pay the rent or your staff, then filing for Chapter 7 bankruptcy is critical where you can discharge your debt and start over. However, if you are behind on your loan payments but can repay your debt over time, filing for Chapter 13 bankruptcy is required, allowing you to plan for your debt and create a repayment plan. If you are a business owner who cannot pay your bills, you might have to file for Chapter 11 bankruptcy. This is a way to restructure your company and make deals with your creditors to pay what you owe (Dinterman & Katchova, 2021). The answer would be different if the summer season were over, but you were still unable to pay back the bank loan. In this case, you may need to file for bankruptcy regardless of the type of bankruptcy that would be most appropriate for your specific situation. If you cannot pay back your loan, you may need to consider all of your options to protect your business and yourself. It is important to speak with an attorney or financial advisor to discuss your specific circumstances and determine which type of bankruptcy would be most appropriate.
Scenario 3
Depending on the legal relationship between the college and the independent contractor, it may be held responsible for these medical expenditures. If a college is held to be the employer of an independent contractor, it is responsible for his behavior while he worked. If the entity is considered a freelancer, on the other hand, the school would not be responsible for his behavior. The degree of power an employer has over a worker is determined by its influence over him (Veliotis & Steve, 2021). If the employer has a lot of power over the employee, they are regarded as employees. However, the independent contractor usually has little control over their working conditions. If the college had a lot of power over an independent contractor in this situation, the college would be responsible for its actions. However, if the college had little control over the independent contractor, it would not be responsible for his conduct. For example, if the independent contractor were required to work on the college campus, use college equipment, and follow college policies, the college would have a great deal of control over him (Veliotis & Steve, 2021). In this case, the college would be liable for his actions. However, the institution would not have much power over him if the independent contractor was not obligated to work on a college campus, use college equipment, or comply with school regulations. Therefore, the institution would not be held responsible for his actions in this scenario.
Scenario 4
In most jurisdictions, an employer in an “employment-at-will” state may fire someone without any reason. However, this broad rule is not always applied. One exception is when the firing violates a public policy. For example, it is against public policy to fire an employee for taking time off to vote. Therefore, if Ann were fired solely because she took time off to vote, her firing would be illegal. When the employer and employee have a written or oral agreement, there are certain circumstances in which it is valid (Arnow-Richman, 2021). For example, if Ann had an employment contract that said she could only be fired for “good cause,” her firing would only be legal if her boss had good cause to believe that she was not performing up to par. In this case, it is possible that Ann’s boss could argue that her tardiness constituted “good cause” for termination. However, if Ann can prove that she was fired because her boss disapproved of her political views (as evidenced by the fact that he was upset about her taking time off to vote), she may have a claim for wrongful termination (Arnow-Richman, 2021). Finally, even in an “at-will” state, an employer cannot fire an employee in a way that violates the law. For example, an employer cannot fire an employee because of their race, religion, gender, or national origin. If Ann can prove that she was fired because of her political views (as evidenced by her boss’s upset about her taking time off to vote), she may have a claim for wrongful termination.
Scenario 5
The supplier may demand his original price for the jars since the firm has a business relationship with him. However, the company has been ordering jars from the supplier and paying for them, so the supplier has reason to believe that the company will continue to do business with him. In addition, if the factory supervisor were authorized to place orders on behalf of the company, the company would be liable for the payment. The supplier might also argue that the company benefited from the ordered jars, so it should have to pay the full price. Ultimately, because it would be up to the firm to prove that the factory supervisor was not authorized to make the purchases, this may be difficult.
References
Arnow-Richman, R. (2021). Temporary Termination: A Layoff Law Blueprint for the COVID Era. Wash. UJL & Pol’y, 64, 1.
Dinterman, R., & Katchova, A. L. (2021). Survival analysis of farm bankruptcy filings: Evaluating the time to completion of chapter 12 bankruptcy cases. Agribusiness, 37(2), 324-347.
Pivateau, G. T. (2019). An Argument for Restricting the Blue Pencil Doctrine. Belmont L. Rev., 7, 1.
Veliotis, S., & Steve, B. (2021). The Tax Cuts and Jobs Act of 2017 and the Gig Economy: Why the Employee vs. Contractor Debate Matters More than Ever. Compensation & Benefits Review, 08863687211060242.
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