Brown was a wholesale insurance broker, a middleman between retail insurance agents and insurance companies. He worked

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Brown was a wholesale insurance broker, a middleman between retail insurance agents and insurance companies. He worked closely with Galtney for a company in which they shared commissions in an agreed upon proportion. A Dallas company, IBS, asked Galtney to open a Houston office for it. Galtney wanted Brown to be with him, so the two were hired as "Houston Team One" for IBS. They shared a base salary on a 42:58 basis (Brown got 42 percent and Galtney 58 percent) and they shared commissions similarly; the ratio adjusted annually based on performance.
IBS fired Brown after a year, claiming he mishandled accounts. He was offered severance pay, but rejected it. He sued, contending that he had been wrongfully expelled from the Houston Team One partnership. The district court held for IBS and Galtney; Brown appealed.

1. The appeals court affirmed that no partnership was ever created; Brown was an employee. Since Brown and Galtney made up the Houston office and operated on a commission basis, why would Brown not have a partnership claim, even though he shared in profits?
2. How could Brown have made sure he was considered a partner?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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The Legal Environment of Business

ISBN: 978-0538473996

11th Edition

Authors: Roger E Meiners, Al H. Ringleb, Frances L. Edwards

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