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7 Assignment – Legal Liability and the Gig Economy
Overview
In this assignment you analyze a business scenario to summarize the principles of agency law, recommend steps to limit liability, and determine the circumstances under which a business might be liable for employee conduct.
Ride-sharing companies are largely hailed as the advent of the gig economy, which is the idea that people do not work as permanent employees for one employer but instead work in a labor market characterized by short-term contracts or freelance work. While creating a new type of entrepreneurship for individuals, a gig economy raises a host of new legal questions about the law of agency for companies utilizing gig workers.
Scenario Facts
Widgets operates a ride-sharing business with over 100 drivers. Your boss has asked you to evaluate Widgets’ legal exposure for the conduct of its drivers. Several drivers have had accidents, and one driver was arrested for driving while intoxicated when providing a ride for a company client. Widgets has no policy for hiring or checking backgrounds and, for some drivers, allows the use of four company vehicles for transporting large groups.
Instructions: Consider the above scenario and complete a 3 to 4-page memorandum of law in which you do the following:
1. Summarize the main principles of agency law relevant to the scenario.
2. Identify and accurately explain the liability to the business in the scenario by considering each of the following factors:
• The scope of employment.
• Agents acting as an employee versus an independent contractor.
• When agents commit an intentional tort versus negligence.
3. Recommend 2–3 significant steps that the business should take to limit its legal exposure related to driver conduct. Support your recommendation.
W 5
LEGAL MEMORANDUM
TO: Boss
FROM:
RE: Legal Liability and the Gig Economy
Summarize the main principles of agency law relevant to the scenario.
Widgets is a ride-share app that has over 100 drivers yet, has no policy for hiring or checking backgrounds of the people that are working for them. Since their start up, there has been several driver related incidents, one for example involving a driver drinking while driving someone else. This type of work is a quickly growing industry with more and more people wanting to work for themselves. That if proper procedures are not put into place issues like with Widgets will only worsen. Agency laws are critical when considering widgets scenario because, it is agency laws in place that could give someone the right to sue them over things their driver did. This is because drivers for Widget are but agents acting in-lieu of them according to established agency laws.
According to upcounsel.com, “agency law deals with agent-principal relationships; that is a relationship where one party has the legal authority to act in place of another.Relationships that are commonly associated with agency law include employer-employee, administrator-decedent or executor, and guardian-ward.” (upcounsel.com, 1, p. 1)
Sources
1. No author. 2022. Definition of Agency Law: Everything You Need to Know. https://www.upcounsel.com/definition-of-agency-law.
2. Marianne M. Jennings. 2021. Business: Its Legal, Ethical, and Global Environment. p. 570.
https://strayer.vitalsource.com/reader/books/9780357447789/pageid/603.
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