Overview
Legally astute managers are able to limit their company's risk by recognizing potential liability during business planning. Spotting potential legal issues and understanding when to contact counsel are important management skills.
Suppose that you are are a manager for Cold Case Trucking (CCT). CCT specializes in transportation of products that require refrigeration or freezing while being transported from the product's manufacturer to a wholesaler's warehouse. In an effort to improve its shipping logistics operations, CCT hired Crusoe, who had experience in operations logistics, as a consultant.
Crusoe presents his logistics and operations improvement plan at a management meeting. Part of Crusoe's plan involves converting the delivery truck drivers from employees to independent contractors. Crusoe claims that this will save employee taxes and limit CCT's liability for driver negligence. Crusoe recommends having the drivers sign independent contractor agreements and paying them based on a monthly fee rather than as hourly employees.
After the meeting, you receive the following e-mail from the vice president of operations:
- To: All manager
- Fr; VP/Operations
- Re; Crusoe's Plan
- Please give me any feedback or concerns you have about Crusoe's recommendations presented at today's management meeting. I will be drafting a summary memo for top-level management next week, and we will be moving to implementation of some or all of Crusoe's recommendations shortly.
INSTRUCTIONS:
Draft a 4-5 paragraphs e-mail to your VP concerning the proposal to convert drivers to independent contractors. Using your knowledge of agency and employment law, be sure to raise any pertinent legal issues and discuss potential liability in explaining your concerns. Conclude the e-mail with a brief recommendation on how best to proceed.