Bill Long 12/21/04
Further Legal Pictures
We continue our exploration of visual images in law.
3. "Frolic of His/Her Own." This term is taken from the field of employment law, even though it sinks its common law roots deeply into the soil of the master/servant relationship or paradigm. The master/servant paradigm, as I call it, underlies modern American employment law, and it give the employer wide berth to hire and fire as s/he desires. Employment contracts, written or oral, are, in general, "at-will" contracts--you serve at the "pleasure" of the employer. Union contracts and some state statutes (such as in Montana) change the nature of the relationship to a "for cause" relationship--where termination of employment is only permitted only if there is a violation of express terms of the contract.
Ok, with that as background, we are ready for some frolicking. The law considers an employee an agent or a "servant" of the employer. If the employee is performing work within the "scope of his/her employment," and does something wrong, the employee is not liable for the wrong. The employer is. The "superior" is responsble for the acts of the employee committed within the scope of employment.
However, sometimes the employee can go outside the scope of employment while on the job. If the employee does this, s/he is said to be on a frolic of his/her own. The most easily visualized form of this is an employee who is driving the company car from point A to point B. There is a direct route between the two. If the employee decides to go to point C, which is not anyplace close to the destination and, in that place, smashes the company car, a court may well hold that she was on a frolic of her own. Whether or not she was whooping it up like a laughing heir, she will be on frolic and, hence, liable. Liability will bring the frolicking to an end.
4. "Pierce the Corporate Veil." I like the image of warfare or even surgery that stands behind this term. The term is from corporate law, obviously. When I was in private law practice, one of the most senior partners at the firm sat me down one day to explain to me that the invention of the corporation as a legal device was the greatest engine of economic growth known to man. It stimulated economic growth because it limited liability of investors to the amount they invested in the company, and it also shielded personal assets of company officers. Thus, people would be encouraged to invest in risky ventures, knowing that the worst that could happen was that they might just lose their investment and not their shirt.
In this regard, he explained that the corporate form was superior to the partnership arrangement, where liability as well as profits attaches to personal as well as partnership assets. Thus we can say that the corporate form represents a bargain with society in which the benefits of enhanced investment and its resultant economic growth outweighs the need to hold individuals financially accountable for poor decisions or market conditions.
Yet, sometimes stuff hits the fan in such a questionable way that plaintiffs feel they want redress. Perhaps there is an allegation of corporate malfeasance--an officer might have made off with some dough, may have deliberately cooked the books, might have perpetrated fraud on investors. In this case a court will consider going behind the protective veil of the corporate form to hold individual officers personally liable for their acts. If a court decides to do this it is piercing the corporate veil. The word "piercing" suggests either a surgical needle deflating the corporate balloon or, probably more to the point, a kind of sword that slices through the wall of protection that the law erects around a corporation. So, sword-wielding plaintiffs want to breakthrough this "cone of silence," this "veil of protection" and get to the assets of the people who have defrauded them. Usually this kind of claim is a last-ditch effort, sort of the corporate equivalent of a tort claim for intentional infliction of emotional distress, but sometimes it wins.
The next essay concludes my visual legal terms.
Copyright © 2004-2008 William R. Long