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SunRay Textiles, Inc. employs a Plant Supervisor, Ms. Tan, who signs a Memorandum of Temporary Health Benefit Adjustment (MTHBA) with the workers’ union represented by Mr. Cruz, who claims authority to negotiate a temporary health benefits adjustment for the plant’s workers. The memorandum states that the company will increase the monthly health care allowance contributed by the employer by 30% for the next three months and that the memorandum binds the company. The company later refuses to implement the increase, arguing that Tan had no actual authority and that Cruz had no express authority. The union contends that Tan had apparent authority by virtue of her position and the company’s longstanding practice of allowing signings by the plant supervisor. (a) Identify the controlling doctrine applicable to the facts and determine whether Tan had actual authority, apparent authority, or neither. (b) If there is no actual authority, discuss whether the company can be bound by apparent authority or agency by estoppel, and what evidence would be required to prove either. (c) If the company refuses to honor the memorandum, what remedy could the workers pursue under Civil Code principles to enforce the agreement or recover losses? Focus on contract remedies.

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Clara

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