Sarah Glaudel
You Decide Assignment
Business Law

Factual Summary: In this case, Coleman works for Software Inc., in which his duties include traveling to prospective clients and meeting with representatives of the businesses in his particular sales division. During a trip to Colorado in March 2008, Coleman stole a ring that he could not afford as an anniversary gift to his wife. After the theft, Coleman met with his client John at Jimmy’s Poor-Man’s Bar where, through a series of events, Coleman killed Jimmy with an alcohol fireball and caused sustainable damage to the bar. Because of these actions, Software Inc. fired Coleman without the required interview as stated in the employee handbook. A week later, Coleman took John out to dinner to make amends where he proceeded to punch John in the eye, causing severe physical damage.
Issue(s):
Because of the actions carried out by Coleman, Jimmy’s mother, John, and Jimmy’s Poor-Man’s Bar sued Software Inc. for the damage caused by Coleman. In addition, Coleman sued Software Inc. for wrongful termination and the jewelry store sued Software Inc. for the value of the ring that was stolen by Coleman. In order to determine which of these suits are lawful, we need to discuss the following legal concepts: when is an employer liable for the actions of an employee and when/how is an employer able to terminate an employee?

Legal Concepts: To begin, we will discuss the legal concepts surrounding an employer-employee relationship, one form of an agent-principal relationship. “Section 1(1) of the Restatement (Second) of Agency defines agency as a fiduciary relationship “which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act.” (Cheeseman 459). Within this relation, the party who employs another person to act on his or her behalf is called the principal (Software Inc.) and the party who agrees to act on behalf of the principal is called an agent (Coleman). Within the relationship, each party owes duties to the other party. The principal owes to the agent: a duty to compensate, a duty to reimburse and indemnify, and a duty to cooperate. On the other hand, the agent owes to the principal: a duty to perform, a duty to notify, and a duty to account. Within the agent/principal relationship, there are laws set forth that dictate whether or not an agent is liable for a principal’s actions and vice versa. In general, “a principal and an agent are each personally liable for their own tortious conduct. The principal is liable for the tortious conduct of an agent who is acting within the scope of his or her authority. The agent, however, is liable for the tortious conduct of the principal only if he or she directly or indirectly participates in or aids and abets the principal’s conduct” (Cheeseman 474). There are several questions that the court evaluates in order to determine liability between principal and agent. A very important legal aspect of liability that applies directly to this case is that of intentional torts (assault, battery, false imprisonment, etc.). In general, a principal is not liable for the intentional torts of agents and employees that are committed outside the principal’s scope of business. Now we need to analyze the concepts surrounding employee termination by an employer and the various aspects that go into such an action. “An agency contract is similar to other contracts in that it can be terminated by an act of the parties. The parties to an agency contract can terminate the agency contract either by agreement or by their actions” (Cheeseman 466-467). There are four common methods of termination of any agency relationship by acts of the parties: mutual agreement, lapse of time, purpose achieved, and occurrence of a specified event. All four of these methods constitute reasonable grounds to terminate an agency relationship. In addition, there are five additional methods of termination that are governed by operation of law: death, insanity, bankruptcy, changed circumstances, and war. These concepts will be vital in determining the validity of the various suits brought against Software Inc.
Analysis/Conclusions:
Based on the legal concepts discussed above, it is in my opinion that the suit filed against Software Inc. by Jimmy’s mother, John, and Jimmy’s Poor-Man’s Bar is not legal and sustainable. First of all, a principal (or employer) is only liable for the agent’s (or employee’s) actions when the agent was acting within their normal scope of employment. In this case, drinking in a bar and blowing a fireball were not within Coleman’s normal employment duties. Secondly, I do not feel that Software Inc. should be held responsible and liable for the criminal actions of Coleman. Coleman was acting outside of his normal business responsibilities as an employee and Software Inc. cannot control such actions. For these reasons, the suit brought against Software Inc. by the three parties (Jimmy’s mother, John, and Jimmy’s Poor-Man’s Bar) will not hold up in a court of law and should be dropped. The second lawsuit that has been brought up in this case is the suit against Software Inc. by Coleman for wrongful employment termination. This suit was brought into place because Coleman was terminated without an interview, a standard that has been set within Software Inc.’s employee handbook. The following is a definition of wrongful termination: “a situation in which an employee’s contract of employment has been terminated by the employer in circumstances where the termination breaches one or more terms of the contract of employment, or a statute provision in employment law” (Wrongful Dismissal). In addition, the following circumstances may constitute wrongful termination: discrimination, retaliation, employee’s refusal to commit an illegal act, and an employer not following termination procedures.
In my opinion, I do not think that an act of wrongful termination was demonstrated in this case. However, I do believe that a breach of contract on behalf of Software Inc. was inhibited. The employee handbook stated that prior to termination the company would interview the employee. Because this action did not take place, I believe that Coleman has a strong case to sue for breach of an employment contract but not for wrongful termination.
The final lawsuit that needs to be analyzed is that against Software Inc. by the jewelry store for the value of the ring that was stolen by Coleman. As discussed in the first lawsuit analysis, Software Inc. is not liable for Coleman’s actions because they were outside of the scope of his employment. In addition, Coleman was performing an intentional tort, theft, and a principal is not held accountable for such actions unless such actions took place to promote the principal’s business or during work-related time or space. Neither of these factors can be determined and therefore, the suit against Software Inc. by the jewelry store is not legally viable and should be dismissed by the courts.

Sources:
Cheeseman, Henry. Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues, 7th Edition. Pearson Learning Solutions.

Wrongful dismissal. (2012, May 21). In Wikipedia, The Free Encyclopedia. Retrieved 21:39, June 3, 2012, from http://en.wikipedia.org/w/index.php?title=Wrongful_dismissal&oldid=493704673