We will discuss these seven cases in class on Tuesday.
We are going to spend Tuesday discussing agency law. The issue comes up in two contexts: 1. Is a principal liable for the contract entered into by his (or its) agent? Answer, yes if the agent had authority. 2. Is a principal liable for the torts of his agents? Answer, yes if the agent is an employee, maybe (although probably not) if the agent is an independent contractor.
So what is an employee? That could easily be an entire semester. The question necessarily includes what is an employer?
The California Supreme Court has recently given us 85 pages of explanation (and history of the issue) of how to figure out whether a person is an employee or independent contractor.
In Dynamex Operations West, Inc., v. Superior Court, 4 Cal.5th 903 (2018), the Supreme Court summarized it with a three part test:
1. Is the worker free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact?
2. Does the worker perform work that is outside the usual course of the hiring entity’s business?
3. Is the worker customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity?
It concluded that it is the employer’s burden to establish all three. “The hiring entity’s failure to prove any one of these three prerequisites will be sufficient in itself to establish that the worker is an included employee, rather than an excluded independent contractor, for purposes of the wage order.”
NO! Students (and even most lawyers) are always surprised when I say that my wife is absolutely not liable for my debts – and certainly not because she is my wife.
Property that she and I own may be liable for my debts (i.e., is probably liable for my debts).
A few California Family Code sections:
(a) *** the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.
(b) “During marriage” for purposes of this section does not include the period after the date of separation ***.
A student last week mentioned that he heard that Apple stock was going to “split.” The LA Times confirmed that a day or two ago. The split will be 4 to 1. That means the board of directors has decided to “give” each shareholder three more shares for every share the shareholder already has. So there is about 4 billion shares outstanding as of last Tuesday, there will suddenly be 16 billion. Since the total value of the company does not go up, the cap value will still be $1.9 trillion. The value of each share therefore should drop from $451 to $113. Why would the company do that, the board of directors do that? It brings smaller investors to the table. Shares are generally sold on the NY Stock exchange in lots of 100. There are more people who can afford $11,300 for 100 shares than $45,100. What good does that do Apple? Does it help them sell more iPhones? No, but if Apple decides to sell new shares, there will be more interested buyers which will make the new shares easier to sell. If Apple wants to raise $100 million, i.e., the board of directors decides to raise $100 million by selling new shares (885,000 new shares), they are easier to sell if there are more interested buyers.