Question

Answer the following statement true (T) or false (F)

Answer 1

True

The corporation drafts articles of incorporation that list the general powers of the company.

Answer 2

False

Deeply rooted in U.S. tradition is the doctrine of employment at will, which states that, just as an employee may choose to terminate his or her employment at any time he or she wishes, so too an employer may terminate an employee's employment at any time for a good reason, a bad reason, or no reason at all.

Answer 3

False

There are several different types of organizational forms that may be selected for a business structure. Businesses are generally structured as one of the following: (1) sole proprietorship, (2) partnership, (3) corporation, or (4) limited liability company.

Answer 4

False

The LLC provides all members with limited liability, while allowing them to participate in the management of the business.

Answer 5

False

An effective sexual harassment program is one that is in writing and communicated to the employees, defines sexual harassment and declares a "no tolerance" policy, establishes a complaint procedure, trains, educates, and sensitizes employees, provides for prompt and thorough investigation of complaints, and includes corrective action, including discipline.

Answer 6

False

The employer owes several legal duties to his or her employee. An employer must pay an employee the agreed-upon wage, subject to company policy, union contracts, and government mandates, for his or her services.

Answer 7

False

An employer is responsible for an employee's torts committed within the scope of employment; the person who engages an independent contractor, on the other hand, is generally not responsible for the independent contractor's torts.

Answer 8

True

Dissolution of a partnership is governed by the partnership contract and usually occurs due to (1) the death or disability of one of the partners, (2) the expulsion of one of the partners (at times for cause, and at other times for no cause), (3) illegality of the partnership's business, (4) the retirement of one of the partners, and (5) the bankruptcy of the business.

Answer 9

True

A union has the right to negotiate a contract with an employer, called a collective bargaining agreement, that covers all terms and conditions of employment. During the negotiation process, the union has the right to ensure that the employer bargains in good faith, making an honest effort to reach an agreement.

Answer 10

True

Often employers are asked to provide references for employees who are currently working for them or who have worked for them in the past. Employers need to be extremely careful in how they respond to these requests.

Answer 11

True

Even if an employer incorrectly believes that an employee has a covered disability, the employee is then protected from discriminatory practices.

Answer 12

True

Many employers provide employees with employee handbooks, manuals that contain the many policies of the firm. In some states, the provisions contained in the handbook are considered a kind of contract between the employer and the employee, while in other states, legislatures and courts have made it clear that employee handbooks are not to be construed as contracts.

Answer 13

False

In the event a collective bargaining agreement is not reached between an employer and a union, the union has the right to call a strike.

Answer 14

True

Typically, the employee handbook contains the history of the company, as well as its procedures regarding hiring, compliance with federal and state antidiscrimination laws, hours of employment, payment of employee salaries, employee termination, employee benefits, employee leaves of absence, safety, security, and miscellaneous matters.

Answer 15

False

The Age Discrimination in Employment Act of 1967 is a federal statute designed to protect individuals from illegal discrimination in employment on the basis of age. The protected class created pursuant to this statute is persons over the age of 40. It should be noted that several states have laws making it illegal to discriminate on the basis of age against persons who are over the age of 21.

Answer 16

False

An employee is distinct from an independent contractor.

Answer 17

True

Sexual harassment is unwelcome sexual attention, whether verbal or physical, that affects an employee's job condition or creates a hostile working environment. Sexual harassment is a form of discrimination on the basis of sex and is illegal under federal and state law. Same-sex harassment is also illegal.

Answer 18

False

OSHA inspects workplaces (at times using administrative search warrants to gain entry) to be certain that these worksites comply with safety and health standards.

Answer 19

Answer: A

Answer 20

False

The duty of care means that a director has a legal and ethical obligation to act diligently and prudently in conducting the affairs of the corporation. A director is responsible for selecting, monitoring, and evaluating competent management.

Answer 21

True

The duty of loyalty means that a director has a legal and ethical obligation to administer to the affairs of the corporation with personal integrity, honesty, and candor. Directors are, for example, prohibited from advancing their own personal or outside business interests at the expense of the corporation.

Answer 22

True

The employer is liable to third parties for injuries caused by an employee, whether the acts are willful or negligent, so long as the acts were committed by the employee within the ordinary course of employment. The employee is also personally liable for wrongful acts that result in injuries to a third party, whether they are intentional or the result of negligence.

Answer 23

False

The fact that an employee is prohibited from suing his or her employer for a work-related injury or illness does not preclude the employee from suing a third party, even if the injury or illness occurred while the employee was on the job.

Answer 24

False

The major disadvantage of a corporation is the fact that the corporation is required to pay separate income taxes at a special corporate rate for any year during which a profit is earned. At the time profits are distributed to shareholders, these may be subject to an additional tax, depending on applicable tax regulations.

Answer 25

False

As is true for a sole proprietorship, the major disadvantage of a partnership is the fact that each partner has unlimited liability for all legal obligations and debts of the business. Each partner is an agent for all other partners, and when a partner acts with either actual or apparent authority, all other partners become liable for his or her acts.