I copied and pasted the book chapters in this word document. All questions that need to be answered are highlighted. Instructions:
Chapter 2: Answer discussion questions #1, 3, 4, & 5
Chapter 5: Answer discussion questions #1, 2, & 4 & Address Case Study on pg 99
Chapter 15: Answer discussion questions #1, 3, & 7; Answer questions following Case Study on Page 477
Chapter 2 book:
INTRODUCTION
As we discussed in Chapter 1, one of this books objectives is to emphasize the managerial use of legal principles so that you gain a competitive advantage for your organization. This chapter extends that theme into the realm of risk management or preventive law. Instead of looking at risk management as a necessary evil to ward off plaintiffs lawyers, we will suggest ways in which the use of preventive legal strategies can add value to your organization. Even if there were no such phenomena as lawsuits or legal liability, any manager in a sport or recreation organization would be well advised to adopt the strategies mentioned in this chapter, not simply to avoid or minimize liability, but to make the organization a better one for employees, participants, and spectators alike.
USING RISK MANAGEMENT TO GAIN COMPETITIVE ADVANTAGE
In much of the literature relating to risk management, authors argue that risk management is necessary to avoid or minimize liability. Thus, risk management is often characterized as a burden, as the proverbial albatross around ones neck. This view seems rather narrow. It makes better business sense to reframe risk management as an opportunity to make your sport or recreation organization more competitive and, therefore, more successful. The vision of this book is to tie legal theory to managerial roles and functions to enable you to use the law to make better decisions for your organization. The essence of this vision as it pertains to risk management is to allow you to use these principles to fashion a better organization for all your constituents: employees, participants, and spectators. A better organization is a safer and more efficient one. Therefore, your risk management strategies should be congruent with your organizational culture. If you are committed to building a climate of value and responsiveness to the needs of your constituents, risk management is simply one more business tool to aid in accomplishing that goal (Bagley, 2005; Hanssen, 2005). The underlying culture of an organization and its core values drive the organizations views of risk management and safety concerns. For example, Recer, in an article entitled NASA Culture Blamed in Shuttle Report (2003), discusses the way in which the NASA culture, driven by schedule, starved for funds, and burdened with an eroded, insufficient safety program (p. 1), led to the destruction of the space shuttle Columbia in 2003 and the death of seven astronauts. Recer reports that the Columbia Accident Investigation Board found that the culture of NASA had changed little since the 1986 Challenger disaster, and that the flawed practices embedded in NASAs organizational system continued for 20 years and led to both disasters. According to Recer, the disasters reflected an organizational culture that put a premium on scheduling and funding at the expense of human life. This example serves as a reminder that the cultural priorities of an organization drive all of its policies and practicesin this case, with horrendous consequences. Risk management cannot be an afterthought. It cannot be viewed as a necessary evil. Risk management is at the core of what your organization stands for and must be interwoven with every aspect of your business. Risk management should be tied to your organizations strategic planning process (Barnds, 2011). The safe-ty and wellbeing of all your constituents should be among your core values, and risk management is an important tool to carry out that imperative.
RISK MANAGEMENT OR PREVENTIVE LAW?
According to Prairie and Garfield (2004), there is a distinct difference between risk management and preventive law. These authors define risk management as the function or process by which [an organization] identifies and manages the risks of liability that arise from its activities (p. 13). They note that the traditional view of risk management is often confined to risks related to a personal injury law-suit or a property damage claim. These authors believe that the organization should focus more broadly and adopt a preventive law posture, one that looks at all risks that could affect the institutions financial health. They explain, The scope of preventive law provides the broader focus, to include environmental, political, economic, regulatory, institutional and cultural risks (p. 13). This broader view corresponds well to our view that the risk management process is holistic (Gurevitz, 2009) and is relevant to every aspect of the organization. Hereafter, this process will be discussed as one of preventive law, adopting the broader view of Prairie and Garfield.
THE PREVENTIVE LAW PROCESS
Prairie and Garfield (2004) have identified five steps that make up the preventive law process. First, risk identification is undertaken, in which a legal audit is performed to identify all possible risks. Second, an assessment of the risks is undertaken. Third, the risks are evaluated. Fourth, a preventive law plan is designed. Fifth, the preventive law plan is implemented. Below we will elaborate on each of these steps.
Risk IdentificationThe Legal Audit
Before any sport or recreation organization can develop a plan to prevent injury or loss, the legal landscape of possible liability must be explored. (If you engage an outside firm to prepare a risk management audit for your organization, make sure that the scope of the audit is clearly delineated in a written contract. On this point, see the case Foster v. Kosseff (2013), which dealt with the scope of a risk management audit performed for a colleges outdoor activity program.) The approach to the risk management audit should be holistic. Of course, personal injury is a prime issue in sport/recreation organizations because of the nature of sport and physical activity; however, a review of the topics covered in this text and present-ed in Exhibit 2.1 will remind the reader that many prospective liabilities stem from issues other than personal injury. Exhibit 2.1 is based on the following hypothetical situation to illustrate the far-ranging nature of these liabilities: You are the newly hired general manager of Daily Fit, a health and fitness club. Your club has a gymnasium, a pool, and several exercise and weight rooms. You also have a sauna and offer childcare. You operate a juice bar and a café for members, and you serve alcohol in the café. You have contracted with a number of personal trainers to give assistance to your members. You are a firm believer in preventive law, and you hire a consultant to perform a legal audit so you will have a better sense of what the landscape of liability may be. The consultant has prepared the list of possible liability concerns shown in exposure to loss or liability. You will note that the list of concerns covers a wide range of legal issues: tort law, contract law, employment law, administrative law, and intellectual property law concepts are all embedded in the legal audit.
Risk Assessment
The next step in the preventive law process is to assess risk. According to Prairie and Garfield (2004), risk assessment is the process of determining the probability that particular risks will result in claims during a specified period and the magnitude of the potential liability arising from such claims (p. 20). This assessment may be done by looking not only at the history of prior claims at your sport/recreation organization but also at the types of litigation that have been brought against similar organizations and what their degree of exposure has been. Various sources of information for a risk assessment are available. A trade association may compile statistics related to claims in your type of sport/recreation business. Cur-rent industry literature that discusses hot topics in litigation is another source of information about the kinds of risks that often turn into costly litigation. Chapter 3 references a number of legal resources for keeping abreast of current litigation in sport and recreation. Trade journals such as Athletic Business, Athletic Man-agreement, and Fitness Management publish articles dealing with current cases and trends in litigation. You should also consult with your legal counsel and attend workshops to stay abreast of the trends in litigation related to your business. Newsletters or periodicals from trade associations and other membership associations frequently list upcoming seminars or workshops. Exhibit 2.2 provides an excerpt from a risk assessment. This excerpt illustrates the assessment process relative to some of the premises liability risks listed in Exhibit 2.1. Using information developed from the risk audit, you are able to assess the risks in view of their frequency of occurrence and the magnitude of the risk. In this way, you can set priorities as to which risks must be addressed immediately and which can be handled in the normal course of maintenance and repair.
Risk Evaluation
The risk evaluation component of the preventive law process is closely aligned with the risk assessment component. Once you have assessed the probability and the magnitude of particular risks, you can evaluate these risks in conjunction with the mission of your organization and the importance of certain activities to your organization. To illustrate, lets return to the health and fitness club example. Lets assume that you have ascertained that the sale of alcohol poses a severe problem. Claims based on the improper sale of alcohol are highly probable, and when such a claim prevails, potential liability is very costly. For a health and fitness club, the sale of alcohol is really peripheral to your business. It is an amenity that you could eliminate without causing your clients great inconvenience. In evaluating this risk, you may choose to eliminate the sale of alcohol. You also know that swimming pools often engender much litigation, and if a drowning occurs, the lawsuit would be quite costly. However, in contrast to the sale of alcohol, a swimming pool is at the core of your business activities. It would be inappropriate to shut down the pool operation because of the risk assessment. Rath-er, you will develop strategies to minimize the risk of liability in your pool operation.
Development of the Preventive Law Plan
We can cope with risks according to four possible strategies: (1) risk elimination; (2) risk retention; (3) risk transfer; and (4) risk control (Prairie & Garfield, 2004).
Risk elimination
Risk elimination should be used only if the exposure to risk greatly outweighs the ben-efits of retaining the activity or operation. The sale of alcohol is peripheral to a fitness club operation and may be eliminated based on the prospect of huge losses. However, if you were the owner of a pro sport franchise, most likely you would not eliminate the sale of alcoholic beverages at games. In this context, the service of alcohol is a part of the fan experience, and it is quite lucrative. You would most likely adopt transfer and control strategies as discussed below. Risk elimination is not the preferred strategy to deal with most loss exposures. If you have incorporated activities within your business because they are congruent with your mission and core values, you will opt to keep those activities and find ways to control the risk, not eliminate the activities.
Risk retention
Risk retention means that your organization chooses to bear the financial consequences of an activity. If your business is self-insured, you are retaining all the risk. Or, if you cannot obtain insurance for a particular risk, yet you have chosen to continue the activity, you are retaining the risk. For example, if you choose to run an event without terrorism insurance (because it is too costly), and the event must be cancelled because of a terrorist act, your organization will bear the brunt of that financial loss. In this case, you are retaining the risk.
Risk transfer
Risk transfer shifts the possible financial loss to another party. Organizations attempt risk transfer in a number of ways, including by procuring insurance, hiring independent contractors, and using contractual provisions. We will discuss these methods in more detail in other chapters. The most common risk transfer method is the procurement of insurance. Because any claim for a covered incident is paid by the insurance company, insurance is a risk transfer method. Engaging an independent contractor, as we will discuss in Chapter 5, means that you shift the possible liability to that contractor. You will require the contractor to procure insurance for its own operations. For example, the vendor you hire to serve alcoholic beverages for a pro sport facility will be an independent contractor that must procure its own insurance. As you will learn in Chapter 5, a major benefit of using an independent contractor is that you avoid vicarious liability based on the actions of the independent contractor. Thus, this method transfers risk to the independent contractor. Contractual provisions can transfer risk. Using waivers with activity participants, as we will discuss in Chapter 17, essentially transfers the risk of financial loss to those participants, since they agree not to sue you if you have been negligent (see Chapter 15 for a discussion of negligence). You will also learn in Chapter 16 about the use of the indemnification clause, which essentially provides that Party A agrees to bear the liability of Party Bs actions should a lawsuit result in a judgment against Party B. This type of risk transfer is common in commercial undertakings, such as leases.
Risk control
Risk control is the key aspect of the preventive law plan, since it involves the actu-al reduction of risk, not just methods to deal with the financial consequences of the risk. This strategy addresses the risks that you identify in your legal audit and involves developing plans to minimize the risks attendant to your operations. Since a sport or recreation organization, by its very nature, will always have inherent risks related to the activities that it provides, the focus here, relative to possible physical injury, is on reducing those risks that go beyond the inherent risks and arise from poor management, instruction, supervision, and so forth.
Implementation of the Preventive Law Plan
A critical factor in the implementation of your preventive law plan is making sure that the plan is congruent with your core values. As we have discussed, preventive law is simply one more management tool for attaining a competitive advantage in the sport/recreation marketplace. All members of your organization must under-stand the importance of preventive law and embrace this concept as a daily part of their work. Borkowski (2013) makes an important point, that coaches must promote a culture of safety first. Making the organization better for all constituencies is at the heart of preventive law, so the preventive law plan should become a cornerstone of the operation.
Although a committee is typically responsible for the actual development and implementation of the preventive law plan, all members of the organization must understand the importance of preventive law and implement these strategies in their areas of expertise. As a simple example, if the maintenance personnel in your business are not committed to preventive law, they will not view their role as vital to this agendaand if they are not committed, you will likely fail to see the results you want in terms of keeping your facility clean and in good repair. This lack of cleanliness and good repair may lead to property damage or physical injury.
Implementing a preventive law plan includes the following key elements:
¦ developing effective policies and procedures.
¦ drafting contracts that protect your interests.
¦ designing effective training programs.
¦ developing evaluation procedures.
Develop effective policies and procedures
Implementation of the preventive law plan begins with the promulgation of effective policies and procedures, such as the protocol to follow in a medical emergency or the protocol for hiring coaches to ensure that they are competent and suitable for your organization. Throughout this text, we include Competitive Advantage Strategies in every chapter, which will be helpful as you develop policies and procedures for the legal issues discussed throughout the book. Good policies and procedures not only provide evidence that you are acting reasonably, but they also communicate to all your constituents your commitment and concern. The policies are communication mechanisms for ensuring that all of your organizations personnel are in alignment regarding their obligations and performance standards.
Policies and procedures also ensure fairness and consistency in the workplace. They provide guidance for managers and employees alike in dealing with a variety of possible legal issues. Keep in mind that people may be less likely to bring a claim against your organization if they perceive that you are trying to do the right thing in terms of safety and fairness.
Draft contracts that protect your interests
One of the advantages in contract law is that, generally, you have adequate opportunity to conduct negotiations and work through several drafts of a contract in order to produce a document that protects your organizations interests. See Chapter 4 for a discussion of this process in terms of drafting a contract with the worst case scenario in mind. The point here is that you have adequate time to assess a contract: you do not have to rush into a contractual undertaking, and in this area in particular, you can truly take a preventive law approach. Be careful to draft contracts that are congruent with your business practice and values. For example, if you are concerned about possible injuries related to alcohol consumption by spectators, your contract with the alcohol concessionaire should ensure that the concessionaire trains employees properly, follows proper protocol in the ser-vice of patrons, and offers incentives for drivers to remain sober. Although standard contracts for many transactions are readily available in books and online, they often will not reflect the nuances of your business or particular aspects of your states laws and, hence, may do more harm than good. For example, if you copy a waiver form from a book, but it does not use the language relating to negligence required by your state, the document will not protect you. You should always consult an attorney to develop an effective waiver form for your organization. (See Chapter 17 for an in-depth discussion of waivers.)
Design effective training programs
The best policies and procedures are useless if they are not reflected in organizational practice. Therefore, effective training programs in such areas as employment practices, inspection, and maintenance of facilities, proper supervision and instruction in your programs, and protection of your intellectual property are essential to the implementation of a preventive law program.
All employees, regardless of position, should become aware of the necessity of using preventive law strategies in all their work efforts. Everyone has a responsibility to foster a safe environment and to be cognizant of areas that could pose personal or financial risk (Eason, 2007). Since your preventive law plan is inextricably tied to your organizations core values, it is important to explain to employees just how the preventive law process enhances those values. For example, the manager of a health club might explain to employees that the preventive law plan will ensure that customers have a safe environment in which to exercise (Carman, 2008). Employees are more likely to follow policies and procedures if they under-stand the value of those policies and procedures for the organization.
Develop evaluation procedures
The preventive law process is ongoing. It does no good to deal with it in a piece-meal or haphazard manner. In fact, it may be detrimental to your organization to begin this process and then fail to follow through. For example, if you identify a risk, develop a policy to address it, but then fail to provide adequate resources or training to implement a risk control strategy, you may have evidenced more than mere negligence when someone is injured because of this risk. You will learn more about this in the discussion of gross negligence and willful and wanton behavior in Chapter 18.
You must have an organizational commitment to the preventive law process. It is not something that can be done once and then forgotten. The cycle of risk identification, assessment, evaluation, plan design, and plan implementation are continual.
CONCLUSION
One of the underlying themes of this book is to tie managerial functions to legal theory in an effort to help managers in sport and recreation organizations to make their businesses more competitive in the marketplace. Competitive advantage stems, in part, from making your organization a better one for all your constituents. A better organization is one that enhances safety and minimizes loss to the organization.
A preventive law program should be an extension of your core values. It should be proactive and holistic in identifying all possible exposures for your type of organization. After you identify, assess, and evaluate your possible exposures to loss, you will design and implement a prevention plan. This plan will focus on risk control as you implement strategies to minimize the risks identified.
Discussion Questions CH 2
1. What is the difference between the traditional concept of risk management and preventive law?
3. Why is the concept of risk control at the heart of the preventive law process?
4. Discuss the aspects of designing a prevention plan.
5. Explain the necessity for an ongoing plan to address risk in an organization.
Chapter 5 Book:
INTRODUCTION
This chapter discusses the circumstances in which employers will be held responsible for the actions of their employees. First, the concept of respondent superior will be addressed: Employers are generally responsible for the actions of employees so long as the actions are taken within the scope of employment. Next, we dis-cuss the legal theories of negligent hiring, supervision, and retention, followed by the issue of whether an employer may be liable for the actions of an independent contractor or volunteer. Last, we address the matter of whether a university may be vicariously liable for actions of its athletes.
This chapter extends the notion addressed in Chapters 4, 6, and 7 that managing human resources effectively is an essential component of gaining a competitive advantage in the sport marketplace. In Chapters 4, 6, and 7 we discuss this notion in conjunction with effective legal strategies for handling the concerns of employees. In this chapter, we explore ways in which you as a manager can minimize your organizations exposure to liability based on the actions of personnel, whether the personnel are employees, independent contractors, volunteers, or college athletes. See Exhibit 5.1 for an overview of this chapters managerial contexts, major legal issues, relevant law, and illustrative cases.
LIABILITY RELATED TO EMPLOYEES
This section provides an introduction to vicarious liability principles and dis-cusses various forms of negligence that can occur in making employment-related decisions.
Vicarious Liability Principles
The doctrine of vicarious liability or respondent superior (let the master respond) holds an employing organization (employer) responsible for certain acts of its employees, not because of any wrongdoing by the employer, but because the law has deemed it appropriate for the employer to be held accountable for the actions of its employees. Thus, the employers liability is secondary or derivative in the sense that the employer itself is not a wrongdoer. As a policy matter, this doctrine is based on the belief that the employer generally receives the benefits of its employees actions; therefore, when the employee does something that is not beneficial, the employer should also bear that responsibility. The doctrine is also predicated on the employers ability to control employees and to procure insurance that covers the actions of employees. In short, an employer should bear employee liability as a cost of doing business.
The general rule of respondent superior is that an employer will be responsible for the acts of an employee so long as the acts are done within the scope of employment, to advance the business of the employer. Conduct is considered to be within the employees scope of employment if it is of the kind he is employed to perform; it occurs substantially within the authorized time and space limits; and it is actuated, at least in part, by a purpose to serve the master (Restatement [Sec-ond] of Agency § 228). For example, if a driver of a delivery truck owned by a sporting goods store drives negligently and injures a third party, that negligence of the employee is imputed to the employer under the principle of respondent superior so long as the accident occurred in the scope of employment, that is, while the employee was in the process of making deliveries for the employer.
Please note that an employees job description as written in an employee handbook, or an employee contract is usually not synonymous with the concept of scope of employment. Job descriptions do not generally encompass all of the duties actually performed by employees. Often the employment contract includes a rather nebulous phrase to the effect that the employee is expected to do X, Y, Z, and other duties as may be assigned. For example, if a coach drives negligently while transporting players to an away match, that negligence will certainly be within the coachs scope of employment, even if the duty of transporting players was not specifically delineated within the coachs contract.
The case of Smith v. Gardner deals with a college assistant baseball coach and whether his actions were within the scope of employment. After the team was settled into a hotel on the night of March 16, Gardner left the hotel at midnight to buy some beer. He returned to the hotel and drank some of the beer. He then decided to go out again and purchase smokeless tobacco. He left again, driving the school van, and at 3:22 a.m. he was involved in the accident in question. He was driving while intoxicated.
The plaintiff asserted that the college should be vicariously liable for the actions of Gardner, arguing that Gardners actions were within the scope of employment.
HOLDING
The federal district court granted the colleges motion for summary judgment, as it held that Gardners actions were not within the scope of employment.
RATIONALE
First, the court addressed the definition of scope of employment, since an employer is not responsible vicariously for the actions of an employee unless the actions are taken within the scope of employment. If an action is within the scope of employment, the employee is taking action in the course of and as the means to accomplish the purposes of employment and, therefore, in furtherance of the masters business. In contrast, if an employee abandons his employment and is engaged in some purpose of his own, this is not considered to be within the scope of employment.
In this case, Gardner, in driving around town after drinking enough beer to become intoxicated, was not in any sense about any conceivable business of the college, nor was he performing any act that could be considered incidental to his employment. Gardner was obviously a frolicking employee engaged in affairs of his own.
Therefore, concluded the court, the college is not liable for Gardners alleged negligence relating to the auto accident in question. To extend the above discussion, it becomes apparent, therefore, that most acts of an intentional nature done by an employee are outside the scope of employment. Intentional torts, which are deliberate actions takensuch as assault and battery, as discussed in Chapter 18are usually undertaken to serve the employees own interests, not to benefit the employer. Therefore, the general rule of respondent superior does not usually apply to cover intentional torts.
Nevertheless, on rare occasions an intentional tort may be considered to be within the scope of employment. For example, in the case of Nathans v. Offerman (2013), a federal district court in Connecticut held that a battery by a minor league baseball player could be considered to be within the scope of employment. In this case, the defendant employee, while at bat, was struck by a pitch. He charged the mound with his bat in hand, and during the melee hit the opposing teams catcher in the head with his bat. The defendant employer asserted that it should not be vicariously liable for the defendant employees battery, since it was not in the scope of employment. However, the court noted that the Restatement (Second) of Agency § 245 provides exceptions in which an employees intentional tort may be considered to be within the scope of employment. Two of these exceptions could apply here, i.e., actions in excess of zeal in competition and fighting arising out of work for ones employer. Therefore, the court declined to grant summary judgment for the defendant employer as it held that whether this battery was in the scope of employment should be a determination made by the finder of fact (the jury).
While vicarious liability can be difficult to establish in cases dealing with intentional torts such as sexual assault, one case illustrates that, given certain facts, a youth organization may be held vicariously liable for its representatives sexual assault of a child. In the case of Southport Little League v. Vaughan (2000), an appellate court in Indiana upheld a finding of vicarious liability against a Little League baseball club. The abuser was an equipment manager who molested several children in an equipment shed where he took them supposedly to distribute and check the fitting of base-ball uniforms and equipment. One notable fact was that the abuser, through his roles as Little League official and equipment manager, had organizational authority to be alone with a participant in the equipment shed (Preston, 2006). Although this is only one situation, Gibbons and Campbell (2003) speculated that it could mark a trend in courts to reconsider holding employers liable for their employees sexual assaults of children, particularly if the organizations place their employees in a position of trust and authority. Regarding the implications of Southport Little League, they remarked that Courts may find that coaches and administrators that sexually assault players accompanying them on team trips are, at least in part, acting within the scope of their employment (p. 215).
Also, in some circumstances an intentional tort may be considered to be within the scope of employment because the employer has engaged in some behavior that ratifies or condones the employees propensity to engage in acts of that naturethis is the ratification/condonation principle (27 Am. Jur. 2d Employment Relationship § 381, 2005). In Chapter 18 the case of Tomjanovich v. Los Angeles Lakers (1979) is presented. In the case, Tomjanovich was severely injured by a punch thrown by Kermit Washington, a Lakers player, who was rewarded by the Lakers for his rough play. The Lakers, therefore, essentially condoned Washingtons vio-lent propensities, which led to this foreseeable attack upon Tomjanovich. This is an example of the ratification or condonation of behavior that would normally be outside the scope of employment. Ugolini (2007) provides an interesting law review discussing the NFLs responsibility for the behavior of its players.
In an example illustrating the concept of ratification or condonation, a lawsuit has been filed against USA Swimming based on the actions of Rick Curl, founder of the Washington, D.C. areas most prominent swim club. Curl was banned for life in 2012 by USA Swimming after a revelation that Curl had a sexual relation-ship with a 13-year-old swimmer in the 1980s. In July 2012, Kelly Dav
