Free Essay

Hrm 543 Wk 2 Interoffice Memo

In: Business and Management

Submitted By shycade75
Words 1666
Pages 7
DATE: 9/30/2012

In response to the emails you have received, I have done the necessary research and summarized the details as requested.

Email Message 1: Discharges at the Anderson Club Store
The state in which the Anderson Cost Club store is located is an “At-Will State,” which means an employment relationship that has no express agreement or contractual obligation to remain in the relationship; and either party may terminate the relationship at any time, for any reason, as long as the reason is not prohibited by law, such as for discriminatory purposes, is not a wrongful termination.

For informative purposes, when a discharge involves no statutory discrimination, breach of contract, or traditional exception to the at-will doctrine, a termination may still be considered wrongful and the employer may be liable for “wrongful discharge,” “wrongful termination,” or “unjust dismissal.” Therefore, to ensure that workplace policies do not wrongfully discriminate against any employees, and do not fall under other exceptions, Cost Club Stores must also beware of situations in which our policies or actions in a particular termination can form the basis for unjust dismissal (Bennett-Alexander, Hartman, 2007).

The GM for the Anderson Cost Club store made a cost cutting decision on terminating employees. However, he was incorrect about there being no restrictions to the right to fire people. There are state and federal laws which prohibit employers from firing people due to race, religion, disability, and age. The GM did not fire employees based on any of these restrictions.

Email Message 2: Regional CEO’s question about reducing employee cost
A contingent worker is one whose job with an employer is temporary and differs from the normal part time/full time employment. An independent contractor is an individual or business that provides goods and/or services to another under terms specified in a contract. Unlike employees or contingent workers, an independent contractor does not work regularly for an employer, but works as and when required. The Equal Employment Opportunity Commission (EEOC) states that the term “contingent worker” includes those who are hired by an employer through a staffing firm, as well as temporary, seasonal, and part-time workers, and those considered to be independent contractors rather than employees.

In considering utilizing a contingent worker or independent contractor, Cost Club has to be made aware of the advantages and disadvantages. Although contingent or temporary workers provide a cost savings as a short-term benefit, depending on their classification they could be entitled to protection under the employment laws. It is important to be sure the employment classification is the correct one to avoid heavy IRS fines.

Email Message 3: Safety Manager’s concern about injury and damages:
This email was of the most concern I have for the company as does the safety manager. There are possibilities that Cost Club could be held liable because of the vicarious liability actions made by the employee’s and agent. Unfortunately, after additional research the incident in Springfield, where the associate basically assaulted and battered the customer, Cost Club can be held liable.

An employer is vicariously liable if the employee causes harm to a third party while the employee is in the course of employment. Vicarious liability is the obligation of one party for the wrongs of another. Liability may extend from an employee to the employer on this basis if the employee is acting within the scope of her or his employment at the time the liability arose and the customer services associate was at that point. There may be a different outcome if the attorneys get involved, because most courts have refused to hold employers vicariously liable for the violent acts of employers who injure others, because employers do not authorize employees to do so, and Cost Club certainly does not condone it (Shumaker, 2004).

The situation with the employee in the electronics department in Hillsboro was a little difficult, and another situation where the lawyers will be able to legally handle the possible lawsuit. Just as in the previous situation, it depends on if the employee was in the scope of his employment, but there has to be a distinction between frolic and detour, in which I will explain. Frolic and detour is when an employee who ordinarily would be engaged in the activities dictated by the terms of his employment briefly strays far enough for the behavior or activity to be completely unrelated to the employment. If an employee is engaged in a frolic and detour he or she will be personally liable for any tort committed during that time. For employers, a finding that an employee was involved in a frolic and detour at the time he or she committed a tort can be the key to shifting liability away from the employer and possibly be relieved of all vicarious liability (Rosen, 2007).

Finally, the real estate agent who helps Cost Club identify prosperous locations for new stores in Kentucky; entered into an agreement for the company to purchase a large building site at a new shopping center in Lexington, which was out of scope of authority, as an agent to Cost Club. An agent who enters into a contract on behalf of another party impliedly warrants that he or she has the authority to do so. If the agent exceeds the scope of his or her authority, the principal is not liable on the contract unless the principal ratifies it. The agent is liable to the third party for breaching an implied warranty of authority. Cost Club did not sign off for the real estate agent to do so; an agent must obey reasonable instructions given by the principal; must not do any acts that have not been expressly or impliedly authorized by the principal; exercise reasonable care and skill in performing these duties; refrain from putting themselves in a position that would ordinarily encourage a conflict between the agent’s own interests and those of the principal, and lastly, the agent must keep the principal informed as to all facts that materially affect the agency relationship. The real estate agent failed to follow all the steps mentioned, therefore, allowing the possibility of Cost Club not be held vicariously liable (Shuler, 2002).

Email Message 4: Resolving disagreements that arise in employment
There are two methods in which Cost Club can reduce the disagreements between the company and its employees; they are Alternated Dispute Resolutions (ADR) and Arbitration Agreements in employment contracts. ADR typically refers to processes and techniques of resolving disputes that fall outside of the litigation process. Courts are increasingly requiring parties to utilize ADR of some type, most often mediation, before permitting the parties' cases to be heard. There are generally four categories of ADR. These are mediation, arbitration, negotiation, and collaborative law.

An arbitration agreement a typical arbitration agreement which provides that “any dispute or claim concerning Employee’s employment with [Employer] or the terms, conditions, or benefits of such employment, will be settled by binding arbitration.” This agreement is usually entered into at the beginning of the employment relationship or as part of the pre-employment process. Arbitration involves selecting a neutral party to consider evidence and arguments presented by the parties and arriving at a decision. Under “binding “arbitration, the parties are held to the decision of the arbitrator and cannot file a lawsuit in court. As a form of alternate dispute resolution (ADR), arbitration serves as an efficient mechanism for avoiding lengthy and costly litigation (Bennett-Alexander, Hartman, 2007).

Email Message 5: Legal implications of Employment-related processes
The selection process in hiring individuals often use various tests such as cognitive tests, physical ability tests, credit checks, personality tests and criminal background checks along with medical examinations. On the surface these tests can assist Cost Club to assess whether someone is capable for a specific job, unfortunately some of those tools can potentially violate the federal anti-discrimination laws if Cost Club uses them to show prejudice based on race, sex, color, national origin, religion, disability, or age. To avoid violating those laws, the company should make sure that it does not disproportionately rule out people in a particular group (Adams, 2012).

The federal laws which prohibit employment discrimination, in selection includes the Civil Rights Act of 1964 which prohibits employers from discriminating against potential employees based on race, religion, color and national origin; the American with Disabilities Act of 1992 (ADA) makes it illegal to not hire individuals based on their perceived disabilities and prohibits employers from discriminating against a highly qualified person with disabilities for employment based on their disabilities or perceived disabilities. The ADA specifies that an employer can't ask a job candidate a question about a disability or request medical examinations until the employer has made a job offer. After a person is hired but before the person begins work, the employer may ask disability-related questions and conduct medical examinations and or tests. The required questions, examinations, and tests must be administered to all employees and not just to people with disabilities. Those questions, examinations, and tests must be job-related and necessary for business. The Age Discrimination in Employment Act prohibits discrimination of people 40 years of age and over, and the Equal Pay Act of 1963, which prohibits unequal pay based on sex (Adams, 2012).


Adams, I. (2012). Employment Pre-Selection Laws. Retrieved from

Bennett-Alexander, D. D., & Hartman, P. L. (2007). Employment Law for Business: The Regulation of the Employment Relationship. NY: McGraw–Hill.

Rosen, C. (2007). What Does Frolic And Detour Legally Mean? Retrieved from
Shumaker Ii, T.A., Feldstein, A.L. (2004).Employer Liability for Workplace Violence. Retrieved from

Schuler, D. (2002). Principal-Agent Relationship. Retrieved from…...

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