The Agency Module introduced you to the distinction between employees and independent contractors, as well as some of the legal issues that can arise in the employment relationship.  Employees who have the authority to enter into contracts on behalf of the employer are also agents.  While the employer is always going to be contractually liable for any contracts made by its agents with third parties, the agent may also be liable to the third party if the agent did not disclose the existence of the agency relationship and the identity of the principal (or employer) for whom the employee/agent was acting.

Under the respondeat superior doctrine, moreover, an employer can be vicariously liable for negligent torts committed by employees acting in the course and scope of their employment.  Generally, however, the employer is not vicariously liable for the intentional torts of an employee, although the employer may be found liable for its own negligence in hiring, training and/or supervising the employee.  With some exceptions, an employer is also not typically liable for the torts of an independent contractor it hires.

This module builds on the Agency Module by examining other legal and ethical issues related to the employment relationship:  employment-at-will, employee testing and surveillance issues, and a variety of laws aimed at protecting workers.  In contrast to employees hired for a specified term or who are protected by a collective bargaining agreement or public employee statute that protects them from arbitrary discharge, at-will employees can generally be fired at any time or any reason (or no reason).  In this module, you’ll consider the rationale underlying employment-at-will, as well as statutory and public policy exceptions to the doctrine intended to mitigate its harshness.

Many employers use pre-employment testing to determine the suitability of job applicants.  Such testing may assess competence in job-related skills; personality, integrity, and other personal factors; and use of drugs.  After hire, employees may continue to be subject to drug-testing, surveillance and monitoring to assess performance and productivity, as well as to ensure compliance with company policies.

The federal government has enacted a number of statutes over the last century to protect workers, e.g., OSHA, FLSA, IRCA, ERISA,COBRA, FMLA, HIPAA, WARN, while state governments provide workers compensation and unemployment compensation as a form of worker protection.  It is important that employers understand and use these laws strategically to reduce the risk of both wrongful discharge actions brought by former employees and government-imposed penalties for statutory violations.