1.
Maxine lost her job as an electrical engineer
with a large company which had provided health insurance benefits for Maxine
and her family. She now:
Correct Answer
B. Is protected under COBRA, which allows her continued health insurance coverage for 18 months as long as she pays the cost.
Explanation
Maxine is protected under COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act. This act allows individuals who have lost their job and their health insurance coverage to continue their coverage for a certain period of time, in this case, 18 months. However, Maxine is responsible for paying the cost of the coverage herself. COBRA ensures that she has the option to maintain her health insurance, although she will have to bear the financial burden.
2.
Maude was denied employment with Trucks R Us as
a warehouse worker because she didn't meet the weight requirement of 160
pounds. Trucks argued the weight requirement was reasonable because warehouse
workers often have to lift things weighing up to 100 pounds. If she sues
Trucks, she will
Correct Answer
C. Win, as the weight requirement is discriminatory and doesn't appear necessary for the requirement of lifting 100 pounds.
Explanation
The correct answer is win, as the weight requirement is discriminatory and doesn't appear necessary for the requirement of lifting 100 pounds. This is because the weight requirement of 160 pounds for a warehouse worker seems arbitrary and unrelated to the actual job duties. It is discriminatory because it disproportionately affects certain individuals, like Maude, who may be perfectly capable of performing the job despite not meeting the weight requirement. Additionally, the argument that warehouse workers often lift things weighing up to 100 pounds does not justify the need for a specific weight requirement.
3.
Jim was a mechanic. One day when he attempted to
weld a car's gasoline tank, it exploded and he was hurt. He filed to collect
workers' compensation. His employer resisted on grounds that Jim had been
negligent and had also violated the express regulations of the company when he
attempted to weld a gasoline tank. Which statement is correct?
Correct Answer
D. Jim can recover even if he was negligent and violated the employer's rules.
Explanation
Jim can recover even if he was negligent and violated the employer's rules. This is because workers' compensation is a no-fault system, meaning that employees are generally entitled to receive compensation regardless of their own negligence or violation of company regulations. The purpose of workers' compensation is to provide financial support to employees who are injured on the job, regardless of fault. Therefore, Jim's ability to recover does not depend on his own conduct or adherence to company rules.
4.
Roxanne was fired from her job when her employer
instituted a new policy that prohibited employees from smoking cigarettes. This
requirement applied to off-duty time as well as job-related time. Roxanne
claimed that she could not quit smoking and that she was wrongfully fired since
she did not smoke in the workplace -- only when she was outside the building
and during off-duty time.
Correct Answer
B. The company would be liable to Roxanne only if there is a state statute prohibiting employers from passing such job-related requirements.
Explanation
The correct answer suggests that the company would only be liable to Roxanne if there is a state statute that prohibits employers from implementing job-related requirements such as the non-smoking policy. This implies that if there is no such statute in place, the company is within their rights to enforce the policy and terminate Roxanne's employment.
5.
Which of the following is
true?
Correct Answer
B. Generally speaking, in most states, it is easier for a private employer than the government to test an employee for drugs or alcohol.
Explanation
Generally speaking, in most states, it is easier for a private employer than the government to test an employee for drugs or alcohol. This is because private employers have more flexibility in implementing drug and alcohol testing policies compared to the government, which may be subject to stricter regulations and legal requirements. Private employers can often conduct random drug tests, whereas government employers may need to have a reasonable suspicion or specific cause to test their employees. Additionally, private employers may have more discretion in determining consequences or disciplinary actions based on the results of drug or alcohol tests.
6.
In 1932, Congress passed what legislation
prohibiting federal court injunctions in nonviolent labor disputes, thereby
declaring that workers should be permitted to organize unions and use their
collective power to achieve legitimate economic ends?
Correct Answer
B. The Norris-LaGuardia Act.
Explanation
The correct answer is the Norris-LaGuardia Act. This legislation was passed by Congress in 1932 and it prohibited federal court injunctions in nonviolent labor disputes. The act declared that workers should be allowed to organize unions and use their collective power to achieve legitimate economic ends. The Sherman Act is not the correct answer as it is a different piece of legislation that focused on prohibiting monopolies and promoting fair competition. The National Labor Relations Act and the Labor-Management Relations Act were both passed later and have different purposes.
7.
Which of the following persons is an agent?
Correct Answer
D. All the above.
Explanation
All the above options represent individuals who act as agents in their respective roles. Diane, as a shoe salesperson, represents the retail store and acts as their agent in selling their products. Tim, as a real estate broker, represents the real estate company and acts as their agent in facilitating property transactions. Craig, as a telephone marketing employee, represents the company and acts as their agent in promoting their products or services. Therefore, all of them can be considered agents based on their roles and responsibilities.
8.
Can a person work as an agent for two different
people with conflicting interests?
Correct Answer
B. Yes, provided the agent discloses to both principals that she is representing both persons and the principals agree to the dual relationship.
Explanation
The correct answer states that a person can work as an agent for two different people with conflicting interests if the agent discloses this dual representation to both principals and they agree to it. This is based on the equal dignities rule, which allows for such dual agency relationships as long as there is transparency and consent from all parties involved.
9.
Which of the following is not required of an
agency relationship?
Correct Answer
A. Consideration.
Explanation
An agency relationship is a legal relationship where one party (the agent) acts on behalf of another party (the principal). In this relationship, the agent has a fiduciary duty to act in the best interests of the principal. Consent of the parties to act as agent or principal is necessary to establish the agency relationship, and the principal must have control over the agent's conduct. However, consideration, which refers to the exchange of something of value between parties, is not required for an agency relationship to exist.
10.
Janet was employed as a sales representative for
Esday, Inc. An appreciative customer
gave her a diamond bracelet for all her hard work on a complicated
contract. Can Janet keep the bracelet?
Correct Answer
B. Yes, but only if she discloses the gift to Esday and Esday consents to her keeping the bracelet.
Explanation
Janet can keep the bracelet, but only if she informs her employer, Esday, about the gift and receives their permission to keep it. This is because as an employee, Janet has a fiduciary duty to act in the best interest of her employer and avoid any conflicts of interest. By disclosing the gift and obtaining consent, Janet ensures transparency and avoids any potential accusations of impropriety or personal gain from the agency relationship.
11.
Nikki was a tax accountant with HBR
Accounting. Nikki decided to do some tax
consulting in the evenings and on wekkends.
HBR is unaware of Nikki’s consulting work. Which statement is correct?
Correct Answer
D. Nikki has breached a fiduciary duty to HBR since she is competing with HBR.
12.
Under a written contract dated May 1, Jodi hired
Jenna to buy a piece of lakefront property. On May 30, Jenna finalized a deal
with Brandon for the purchase of the land and a contract was signed. On May 31,
Jenna learned Mrs. O'Leary had died on May 29. Which statement is correct
concerning the contract Jenna entered into with Brandon?
Correct Answer
A. The contract is void since the agency terminated May 29.
13.
Megan was employed by a large company. Her supervisor told her to falsify government
reports. She refused and was fired. She sued for wrongful discharge. Her employer claimed since Megan was an
at-will employee, she had no legal right to claim it was liable for
damages. Is the employer right?
Correct Answer
D. No. Though at-will employees do not have extensive rights relative to job security, they may not be legally fired for refusing to perform an illegal act.
Explanation
The employer is not right. Even though Megan was an at-will employee, such employees may not be fired without just cause. In this case, Megan refused to falsify government reports, which is an illegal act. At-will employees may not be legally fired for refusing to perform an illegal act, regardless of their limited job security rights.
14.
Which of the following may be legitimate
nondiscriminatory criteria for selection of an employee?
Correct Answer
D. Educational level.
Explanation
Educational level may be a legitimate nondiscriminatory criterion for selection of an employee because it is directly related to the qualifications and skills required for a particular job. Employers have the right to consider an individual's educational background to ensure they have the necessary knowledge and expertise to perform the job effectively. However, age, race, and color are protected characteristics under anti-discrimination laws, and using them as criteria for selection would be considered discriminatory.
15.
Ron and several fellow workers of Vicy, Inc., a
small manufacturing company, wished to organize a union. When Vicy learned of this activity, it issued
a bulletin to all workers stating that a union will only hurt the company and
that “we are a family that can solve any problems ourselves—we do not need
union activists from outside our company trying to tell us what to do!” Which statement is correct concerning the
bulletin issued by Vicy?
Correct Answer
C. Vicy has not committed an unfair labor practice. An employer may vigorously present anti-union views to its employees.
Explanation
The correct answer is that Vicy has not committed an unfair labor practice. This is because an employer is allowed to present anti-union views to its employees. The bulletin issued by Vicy, stating that a union will only hurt the company and that they do not need outside union activists, falls within the bounds of an employer expressing their opinion on unionization. It is not considered outrageous interference or a violation of labor laws.
16.
Zoe, who works as a retail clerk, wishes to talk
with her co-worker about organizing a union.
Her employer threatens to fire her if she talks with other workers about
union activity in the presence of customers while she is working. Does the employer have a legal right to make
this threat to Zoe?
Correct Answer
A. Yes.
Explanation
The employer has a legal right to make this threat to Zoe because employers are generally allowed to restrict employees from discussing union activity in the presence of customers. While employees have the right to engage in union activities, employers also have the right to maintain a certain level of professionalism and protect their business interests. However, it is important to note that this answer assumes there are no specific state laws or regulations or National Labor Relations Board rulings that would restrict the employer's actions.
17.
Exec-Pac, Inc. is extremely opposed to having
its employees organize. The union attempting to organize a collective bargaining
unit filed an unfair labor practices claim with the National Labor Relations
Board (NLRB), alleging that Exec-Pac illegally interfered with its unionization
drive. The NLRB, convinced that an election would be pointless, waived the
requirement of an election and certified the union as the exclusive
representative of Exec-Pac's workers. Which statement is correct?
Correct Answer
A. The NLRB had to be convinced that the employer's interference with the union's attempt to organize the workers was outrageous.
Explanation
The NLRB has the authority to waive the requirement of a union election if it believes the employer has shown anti-union bias.
18.
Mega Corp is negotiating a collective bargaining
agreement with a union. The company
claims it is not financially able to pay with the wages increase the union is
demanding. Which statement is correct?
Correct Answer
C. Both of the above are correct.
Explanation
Both of the above statements are correct. The union does have a legal right to inspect the financial records of the company to verify its claim of financial inability to pay the proposed wage increase. Additionally, it is considered an unfair labor practice if the employer claims it cannot pay higher wages but refuses to allow the union to inspect its financial records.
19.
A union declares it will be engaging in a
partial strike whereby its employees will alternate between working for a
period of time and then walking off the job for an indefinite time. Thus,
employees may work for a few days or only a few hours before walking off the
job again. The employer claims the union does not have the legal right to engage
in a partial strike. Which statement is correct?
Correct Answer
A. The employer is correct. The union must either strike or work—it cannot alternate between working and striking.
Explanation
The employer is correct. The union must either strike or work—it cannot alternate between working and striking. This is because the employer claims that the union does not have the legal right to engage in a partial strike. If the union chooses to strike, then all employees must walk off the job and cease working. If the union chooses to work, then all employees must continue working without any interruptions. The option of alternating between working and striking is not legally permissible.
20.
Employees of Truan went on strike because Truan
refused to bargain in good faith. After
an unfair labor practices strike, the striking workers are:
Correct Answer
A. Entitled to get their jobs back.
Explanation
The employees of Truan went on strike because Truan refused to bargain in good faith. This indicates that the strike was a result of unfair labor practices. In such cases, the striking workers are usually entitled to get their jobs back once the strike is over, as a means of protecting their rights and ensuring that they are not unfairly penalized for exercising their right to strike. Therefore, the correct answer is that the striking workers are entitled to get their jobs back.
21.
All the forms of organization listed below have
limited liability except the:
Correct Answer
B. General partnership.
Explanation
A general partnership does not have limited liability, meaning that the partners are personally liable for the debts and obligations of the business. In contrast, a limited liability company, Subchapter "S" corporation, and corporation all offer limited liability protection to their owners. This means that the owners' personal assets are generally protected from the company's debts and liabilities.
22.
Jill and Jane plan to start a business in which
each will be an equal owner, but only Jill will be active in the business. They do not want to form a corporation. Their best choice for business organization
is probably:
Correct Answer
C. A limited partnership.
Explanation
A limited partnership would be the best choice for Jill and Jane because it allows for one partner (Jill) to be active in the business while the other partner (Jane) can be a passive investor. This structure provides limited liability protection for Jane while still allowing Jill to have control and make decisions for the business. A general partnership would require both partners to be actively involved in the business, while a franchise involves a contractual relationship with a larger company. Two sole proprietorships would not provide the desired equal ownership structure.
23.
Murray was a partner in a large firm. He died
unexpectedly. His son, Frank, wanted to take over for his father in the
partnership and was well qualified to do the work his father had done. Which
statement best describes Frank's rights in the partnership if he inherits the
interest?
Correct Answer
B. Frank is entitled to the value of his father’s interest in the partnership, but not to become a full partner.
Explanation
Frank is entitled to the value of his father's interest in the partnership, but not to become a full partner. This means that Frank will receive the financial benefits of his father's share in the partnership, but he will not have the same rights and responsibilities as a full partner. He may not have voting rights or decision-making power within the partnership. However, he will still be entitled to receive his father's share of the profits or assets upon the dissolution of the partnership.
24.
Jill was a limited partner in a retail business
that was sued by a customer who fell in the store. The customer claimed the business was
negligent in caring for its floors. Which
statement best describes Jill’s potential liability?
Correct Answer
C. Jill can only be liable to the amount of her investment.
Explanation
Jill, as a limited partner, has limited liability in the retail business. This means that her personal assets are protected and she can only be held liable up to the amount of her investment in the business. Therefore, she is not personally liable to the customer's claim beyond the extent of her investment.
25.
The business form that is taxed as a partnership
and gives all owners limited liability, is:
Correct Answer
C. Limited liability company.
Explanation
A limited liability company (LLC) is a business form that provides the owners with limited liability, meaning their personal assets are protected from the company's debts and liabilities. LLCs are also taxed as partnerships, allowing the owners to avoid double taxation. This makes the LLC the correct answer as it combines the benefits of limited liability and partnership taxation.
26.
John, his parents, and three brothers own all
the stock of their family farm corporation.
This corporation is probably:
Correct Answer
C. A closely held corporation.
Explanation
The given information suggests that the ownership of the family farm corporation is limited to John, his parents, and three brothers. This indicates that the corporation is closely held, meaning that it is owned by a small number of individuals who are likely family members.
27.
Ollie leased a building in Old Town. Ollie
installed a washer and dryer unit and a new furnace in the basement of the
building with new duct work throughout the building. Upon expiration of the
lease, Ollie intends to remove the washer and dryer, but not the furnace. The
washer and dryer can easily be removed without harming anything. Removal of the
furnace, however, will damage the building. Are the washer, dryer, and furnace
fixtures?
Correct Answer
B. The furnace is a fixture, but the washer and dryer are not.
Explanation
The explanation for the correct answer is that fixtures are items that are permanently attached to the property and are considered part of the property. In this case, the furnace is permanently installed in the basement with new duct work throughout the building, making it a fixture. However, the washer and dryer can be easily removed without causing any damage to the building, indicating that they are not fixtures.
28.
The purpose of recording a deed or other real
estate transaction is to:
Correct Answer
D. Put the rest of the world on notice that the transaction occurred between the grantor and the grantee.
Explanation
Recording a deed or other real estate transaction serves to put the rest of the world on notice that the transaction occurred between the grantor and the grantee. This means that anyone who may have an interest in the property can be aware of the transfer and cannot claim ignorance of the transaction. It helps to establish the priority of the transaction and protects the rights of the grantee.