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CPCU 530 > Chapter 9: Employment Law and Business Entities > Flashcards

Chapter 9: Employment Law and Business Entities Flashcards

1
Q

Employment At Will

A

Four exceptions to employment at will:

  • Public policy exception
  • Implied-contract exception
  • Covenant-of-good-faith exception
  • Statutory exception
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2
Q

Public Policy Exception

A

Examples:

  • Refusing to commit perjury at the request of the employer
  • Filing a workers compensation claim after being injured on the job
  • Applying for medical leave specifically provided under state or federal law
  • Refusing to participate in illegal price-fixing
  • Refusing to violate another employee’s or a customer’s privacy without permission
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3
Q

Covenant-of-Good-Faith Exception

A

Example:

Firing a long-term employee right before he/she was eligible for retirement benefits

  • Not as widely recognized by the state’s as the other types of exception
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4
Q

Antidiscrimination Laws

A

Prohibits termination based on:

  • Age
  • Sex, race, color, religion, or national origin
  • Disability
  • Other factors (military service, jury duty, wage garnishment)
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5
Q

Discrimination Based on Age

A

Two federal laws protect workers from age discrimination:

  • The Age Discrimination in Employment Act (ADEA) of 1967
  • The Older Workers Benefit Protection Act (OWBPA) of 1990
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6
Q

Civil Rights Act of 1964

A

Governs most employment discrimination actions, including:

  • Prohibited employment practices
  • Permissible employment practices
  • Pregnancy discrimination
  • Sexual discrimination
  • Sex-based insurance rates
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7
Q

Discrimination Based on Sex, Race, Color, Religion, or National Origin

A

Employment discrimination may be based on:

  • Disparate Treatment Theory
  • Disparate Impact Theory
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8
Q

Discrimination Based on Sex, Race, Color, Religion, or National Origin

A

Two basics types of sexual harassment claims:

  • Quid pro quo sexual harassment
  • Hostile work environment
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9
Q

Discrimination Based on Sex, Race, Color, Religion, or National Origin

A

Two federal laws prohibit discrimination based on disability:

  • The Rehabilitation Act of 1973
  • The Americans with Disabilities Act (ADA)
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10
Q

Labor-Management Relations

A

Three key areas of law regarding labor-management relations:

  • Collective-bargaining relationships
  • Collective-bargaining process
  • Economic pressures
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11
Q

Collective Bargaining

A

Examples of bad-faith:

  • Refusal by either side to enter into negotiations on mandatory issues
  • A take it or leave it approach by the employer from the time of the first bargaining conference
  • Participation in a lengthy series of bargaining conferences with no intention to enter into an agreement
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12
Q

Employee Welfare Laws

A
  • Safety and health
  • Wages and hours
  • Family medical leave
  • Privacy
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13
Q

Corporations: Formation

A

Three main types of corporations:

  • Government corporations, such as cities, counties, and states
  • Charitable, or not-for-profit corporations, such as colleges, universities, hospitals, and religious institutions
  • Business for-profit corporations
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14
Q

Corporations: Formation

A

Business entities can be organized as:

  • Corporations
  • Partnerships
  • Sole proprietorships
  • Unincorporated associations
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15
Q

Advantages of Incorporation

A
  • Limit owners’ liability
  • Possible tax advantages
  • Easier to sell or transfer ownership
  • Easier to raise capital
  • Perpetuity beyond the death of owners
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16
Q

Duties of Directors and Officers

A

Under the Employee Retirement Income Securities Act (ERISA) of 1974, directors and officers have these duties:

  • To act solely in the plan participants’ interest
  • To exercise the care and skill of a reasonable person conducting a similar enterprise
  • To diversify investments unless it is clearly unreasonable to do so
  • To act in accordance with the plan documents
17
Q

Stockholders’ Powers and Duties

A

Stockholder decisions include:

  • Electing board members and, in many states, removing them without cause
  • Approving changes to the articles of Incorporation
  • Making or amending bylaws
  • Approving loans to the corporation’s directors, officers, or agents
  • Ratifying (approving) board actions
  • Suing directors for mismanagement
18
Q

Stockholders’ Actions

A

Stockholders may file three types of civil lawsuits to pursue complaints:

  • Class actions
  • Derivative actions
  • Direct actions
19
Q

Corporations: Mergers, Dissolution, and Reorganization

A
  • Merger is the joining together of two or more corporations to become a new organization
  • Dissolution is a voluntary or involuntary termination of a corporation
  • Reorganization occurs when a corporation becomes bankrupt
20
Q

Winding Up the Partnership Business

A

Partnership assets are distributed in this order:

  1. ) Partnership creditors
  2. ) Partnership advances
  3. ) Each partner’s capital
  4. ) Surplus to the partners, divided in the same proportion as profits
21
Q

Limited Liability Partnerships (LLP)

A

Liability limitations do not apply in situations such as these:

  • Individual acts of negligence or wrongful acts by a withdrawing partner
  • Debts or obligations of the partnership for which a withdrawing partner has agreed to be liable
  • Debts and obligations expressly undertaken in the partnership agreement
22
Q

Unincorporated Associations

A

Examples:

  • Trade Associations
  • Labor unions
  • Religious organizations
  • Clubs
23
Q

Characteristics of Unincorporated Associations

A

Differ from partnerships in several ways:

  • Associations cannot hold title to real property or execute a lease in the association’s name
  • A member’s withdrawal does not cause dissolution
  • Any expense-sharing or profit-sharing in an association is frequently other than per capita
  • Associations’ individual members do not have authority to participate directly in its day-to-day management
24
Q

Types of Unincorporated Associations

A
  • Trade associations
  • Labor unions
  • Benevolent and fraternal associations
  • Religious organizations
  • Clubs
  • Condominium owners’ associations
25
Q

Unincorporated Association Formation

A

Bylaws of an unincorporated association typically include provisions addressing:

  • Qualifications, selection, and terms of directors and trustees
  • Meetings
  • Qualifications for membership
  • Acquisitions and transfer of property
  • Right and duties of members
  • Dissolution
26
Q

Dissolution and Winding up of Unincorporated Associations

A

Can be dissolved:

  • By members’ votes
  • By the death of withdrawal of a majority of its members
  • By court action on application of creditors or members, or for illegal conduct
  • By the expiration of period states in the articles

CPCU 530 (10 decks)

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