Michael Jackson was hired in January as the new Operations Manager for "Just Collect It, Inc", a Texas toy assembly plant also known as JCI. As the Operations Manager Michael's duties included contract negotiations, accounts receivables & payables, Human Resources & scheduling, shipping & receiving and purchasing. Michael recognized that the duties agreed upon were customarily performed by 3-5 people, and or 3-5 departments, but due to budget concerns JCI was convinced that the right Operations Manager would be effective in all of the assigned tasks. Michael was aware that the 5 previous Operations Managers were overwhelmed with the job duties and resigned within 6 months of being hired.

Michael was informed upon hiring that JCI did not have a Contracts, Account Receivable, HR, Shipping and or Purchasing department or positions because of budget restrictions and they had absolutely no intention of filing the positions. Michael was convinced that he had the solution to succeed at each duty.As operations manager Michael would receive an annual salary of $250,000.The collective salary for all 4 of the positions needed would be over $250,000 for the requisites experience needed for the job.The position would require education and actual work experience for several years to be proficient.

Once Michael took over the leadership role, while being fully aware of the corporation's decision not to hire any additional labor, he made the executive decision to hire 4 inexperienced recent high school graduates to handle some of the task that was assigned to him.Michael had success in the past hiring "fresh minds" as he calls it. He enjoyed training young employees in the methods he preferred them to use.Hence, he hired Carl to handle the contracting, Alice for general accounting and Accounts receivable, Harry for HR demands and scheduling and Paula for purchasing. Michael retained all the other duties and felt his time would be best spent keeping a close eye on the new hires and overseeing the assembly workers.

To offset budget concerns Michael used $72,000.00 of his $250,00000 and paid the new hires directly from his personal account.Their employment setup provided for pay only, they did not

receive any health, retirement, 401K or workman compensation.They did not have any federal or social security withholdings. They were scheduled to receive their full hourly rate without deduction every Friday. Each employee would receive $18,000.00 annually in pay. The experienced professional would have commanded $62,500.00 for the position.

Carl

After Michael trained all 4 new-hires he let them lose at the jobs they were hired to do. The first act of business for Carl, by the way only 16 years old and graduated at the top of his class, was negotiating and fully executing a contract to sale 100 model cars for $1000 to Just Buy It (JBI). JBI was in the business of auctioning off the model cars and it was a very profitable business.Carl offered sell via email JBI 100 model cars for $1000. Despite JBI's previous experiences with JCI they were thrilled at the opportunity and accepted immediately via email.They did want JCI to withdraw the offer, so they immediately sent a carrier over to JCI with the $1000 check.Carl accepted the check and deposited into the company account. JBI made on average $200 for every car sold.Their previous 5 contracts with JCI was for the purchase of 100 for $5000 which was $4000 less than the last 5 previous contracts with JBI.

1.Is there any possible way that JCI can assert that Carl was an Independent Contractor of JCI? Explain how the book defines Independent Contractor and why you take your position of Carl's Independent Contractor status.

2.Applying the legal elements to the facts, If JCI asserts that the verbal contract executed between Carl and JBI was unenforceable because it violated the Statute of Fraud, would they be successful?