In this assignment, you analyze a business scenario to summarize the principles of agency law, recommend steps to limit liability and determine the circumstances under which a business might be liable for employee conduct.
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Ride-sharing companies are largely hailed as the advent of the gig economy, which is the idea that people do not work as permanent employees for one employer but instead work in a labor market characterized by short-term contracts or freelance work. While creating a new type of entrepreneurship for individuals, a gig economy raises a host of new legal questions about the law of agency for companies utilizing gig workers.
Widgets operates a ride-sharing business with over 100 drivers. Your boss has asked you to evaluate Widgets’ legal exposure for the conduct of its drivers. Several drivers have had accidents, and one driver was arrested for driving while intoxicated when providing a ride for a company client. Widgets has no policy for hiring or checking backgrounds and, for some drivers, allows the use of four company vehicles for transporting large groups.
Consider the above scenario and complete a 3-4 page memo in which you do the following:
- Summarize the main principles of agency law relevant to the scenario.
- Identify and accurately explain the liability to the business in the scenario by considering each of the following factors:
- The scope of employment.
- Agents acting as an employee versus an independent contractor.
- When agents commit an intentional tort versus negligence.
- Recommend 2-3 significant steps that the business should take to limit its legal exposure related to driver conduct. Support your recommendation.
Note: Remember, you are demonstrating your understanding of the law, so explain the law first and then answer the questions of the assignment. Be informative and show what you know! Provide references from credible and reputable legal sources.