31.1 Define term employee and at-will employee.

Employees can be either term employees or at will employees.

Term Employment and owes

Term employment occurs where an employer and employee enter a contract for a specified time. An employer who terminates a term employee without cause during the stated period is liable for wrongful discharge damages to the employee. Where there is an employment contract for a stated term, an employer may terminate an employee for cause without being liable for damages.

Examples A company employs a Chief Executive Officer (CEO) for a period of 5 years with a stated annual salary of $1 million. If the employer terminates the CEO after 3 years without cause, the employer owes $2 million to the terminated employee. If, however, during the time of the contract the CEO is found stealing corporate funds, the CEO can be terminated for cause without payment of damages.

At-Will Employment

Most employees, including most managers, are at-will employees. This is because they do not have term contracts with their employer. An at-will employee can be terminated without cause at any time by the employer. The employee has no redress to recover damages from the employer. At-will employees may be terminated for cause, but a showing of cause is not necessary for the employer to terminate the employee.

Example A software designer has been hired by an Internet company as an at-will employee. After 6 months, the employer terminates the employee without cause. The employee has no claim for damages from the employer.

Exceptions

There are certain exceptions where employees, including at-will employees, cannot be legally terminated. Following are the most common exceptions:

Labor union exception. Under the labor union exception, federal and state statutes restrict employers' ability to discharge employees who are union members protected by labor laws and collective bargaining agreements entered

between the employer and the union. Certain procedures must be followed to seek the discharge of union-represented employees. Public policy exception. Under the public policy exception, employees, including at-will employees, cannot be discharged if such discharge violates public policy. Discharging an employee for serving as a juror, refusing to act in

violation of the law (e.g., refusing to dispose of toxic wastes in violation of environmental laws), refusing to engage in illegal research (research that violates animal protection laws), refusing to distribute defective products, and the like have been held to violate public policy Statutory exception. Certain statutory exceptions prohibit employers from refusing to hire, not promoting, or discharging employees in violation of federal and state statutes. Employees cannot be discharged because of their race, national origin, gender, age, disabilities, or being members of other protected classes as specified in federal and state antidiscrimination laws. Thus, even at-will employees can recover damages and other remedies from employers for detrimental employment decisions in violation of these statutes.

29.2 Describe a principal-independent contractor relationship.

Principals often employ outsidersthat is, persons and businesses that are not employeesto perform certain tasks on their behalf. These persons and businesses are called independent contractors. Independent contractors operate their own business or profession. The arrangement creates a principal independent contractor relationship .

Examples Doctors, dentists, consultants, stockbrokers, architects, certified public accountants, real estate brokers, and plumbers are examples of those in professions and trades who commonly act as independent contractors.

Critical Legal Thinking

What is the difference between (1) a principal-agent relationship. (2) an employer-employee relationship, and (3) a principal-independent contractor relationship?

A principal can authorize an independent contractor to enter into contracts. Principals are bound by the authorized contracts of their independent contractors. For example, if a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does so, the settlement agreement is binding.

33.3 Identify race and color discrimination that violates Title VII.

Title VII of the Civil Rights Act of 1964 was enacted primarily to prohibit employment discrimination based on a person's race and color. Title VIl provides equal opportunity in employment for minority job applicants and minority employees seeking promotion.

Race Discrimination

The EEOC recognizes the following racial classifications.

Racial Group

Description

African American

A person having origins in any of the black racial groups of Africa.

Asian

A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent.

Caucasian

A person having origins in any of the original peoples of Europe, the Middle East, and North Africa,

Native American

A person having origins in any of the original peoples of North, South, or Central America

Pacific Islander

A person having origins in any of the original peoples of Hawaii and the Pacific Islands.

Race discrimination

in employment violates Title VII.

Example National Corporation has a job opening for its chief executive officer position. The employer receives applications for this position from many persons, including Joe Thomas, who is an African American. Thomas is the best qualified applicant for the job. If National Corporation does not hire Thomas because of his race, the company has engaged in race discrimination, in violation of Title VII. This would be disparate-treatment discrimination.

Example If an employer refuses to hire or promote all persons of a racial class, then the company has engaged in employment discrimination in violation of Title VII. This would be disparate-impact discrimination.

In the following case, the court addressed the issue of racial harassment in the workplace.

Critical Legal Thinking

Was Title VIl necessary to eliminate race discrimination in employment? Would businesses have eliminated race discrimination in employment voluntarily?

48.2 Describe the different types of freehold estates and life estate.

A person's ownership right in real property is called an estate in land for estate ). An estate is defined as the bundle of legal rights that the owner has to possess, use, and enjoy the property. The type of estate that an owner possesses is determined from the deed, will, lease, or other document that transferred the ownership rights to him or her.

A freehold estate is an estate in which the owner has a present possessory interest in the real property; that is, the owner may use and enjoy the property as he or she sees fit, subject to applicable government regulation or private restraint. There are 3 types of freehold estates: fee simple absolute (or fee simple). fee simple defeasible (or qualified fee), and life estate. These are discussed in the following paragraphs.

Fee Simple Absolute (or Fee Simple)

A fee simple absolute (or fee simple ) is an estate in fee that is the highest form of ownership of real property because it grants the owner the fullest bundle of legal rights that a person can hold in real property. It is the type of ownership most people connect with owning real property. A fee simple owner has the right to possess and use the property exclusively, to the extent that the owner has not transferred any interest in the property (e.g.. by lease)

If a person owns real property in fee simple, that ownership is characterized as follows:

Is infinite in duration (fee) Has no limitation on inheritability (simple) . Does not end on the occurrence of any event (absolute)

Example Mary owns a fee simple absolute (or fee simple) in a piece of real property. This means that there are no limitations on her ownership rights. Mary owns this property while she is alive, with no conditions on her ownership rights, and she can transfer the property by will to a named beneficiary or beneficiaries when she dies.

Fee Simple Defeasible (or Qualified Fee)

A fee simple defeasible

(or qualified fee) grants the owner all the incidents of a fee simple absolute except that ownership may be taken away if a specified condition occurs or does not occur.

Example A conveyance of property to a church as long as the land is used as a church or for church purposes" creates a qualified fee. The church has all the rights of a fee simple absolute owner except that its ownership rights are terminated if the property is no longer used for church purposes.

Life Estate

A life estate is an interest in real property that lasts for the life of a specified person, usually the grantee. The person who is given a life estate is called the life tenant. For example, an owner of real estate who makes a conveyance of real property to Anna for her life creates a life estate. Anna is the life tenant. A life estate may also be measured by the life of a third party, which is called estate pour autre vie (e... "To Anna for the life of Benjamin"). A life estate may be defeasible (e.g. "To John for his life but only if he continues to occupy this residence"). On the death of the named person, the life estate terminates, and the property reverts to the grantor or the grantor's estate or other designated person.

52.3 Describe the different types of testamentary gifts.

A gift of real estate by will is called a devise

. A gift of personal property by will is called a bequest, or legacy

. Gifts in wills can be specific, general, or residuary:

Specific gift. Specific gifts

in a will are gifts of specifically named pieces of property

Example A gift of a ring, a boat, or a piece of real estate in a will is a specific gift. General gift. General gifts are gifts that do not identify the specific property from which the gift is to be made. These are gifts of an amount of money.

Example A gift of $100.000 to a named beneficiary is an example of a general gift. The cash can come from any source in the decedent's estate. Residuary gift. Residuary gifts are gifts that are established by a residuary clause in a will. This means that any portion of the estate left after the debts, taxes, and specific and general gifts have been paid belongs to the person

or persons named in the residuary clause. Some wills contain only a residuary gift and do not contain specific or general gifts.

Example A clause in a will that states, "I give my daughter the rest, remainder, and residual of my estate is an example of a residuary gift.

an inheritance and often does where the liens or

A person who inherits property under a will or an intestacy statute takes the property subject to all the outstanding claims against it (e.g., liens, mortgages). A person can renounce mortgages against the property exceed the value of the property.

Lineal Descendants

(e.g., children, grandchildren, great-grandchildren) either per stirpes or per capita. The differences between these 2 methods are discussed in the following

A testator's will often states that property is to be left to lineal descendants paragraphs.

Per Stirpes Distribution to Lineal Descendants Pursuant to per stirpes distribution the lineal descendants inherit by representation of their parent, that is, they split what their deceased parent would have received. If their parent is not deceased, they receive nothing.

Example Anne dies without a surviving spouse, and she had 3 children, Bart, Beth, and Bruce. Bart, who survives his mother, has no children. Beth has 1 child, Carla, and Carla has 1 child. Donovan, and they all survive Anne. Bruce, who predeceased his mother, had 2 children, Clayton and Cathy: and Cathy, who predeceased Anne, had 2 children, Deborah and Dominic, both of whom survive Anne. If Anne leaves her estate to her lineal descendants per stirpes, Bart and Beth each get one-third. Carla receives nothing because Beth is alive, Donovan receives nothing because both Beth and Carla are alive, Clayton gets one-sixth, and Deborah and Dominic each get one-twelfth.