1. How much obedience and loyalty does an agent employee owe to an employer? What if the employer engages in an activity—or requests that the employee engage in an activity—that violates the employee’s ethical standards but does not violate any public policy or law? In such a situation, does an employee’s duty to abide by her or his own ethical standards override the employee’s duty of loyalty to the employer?

2. When an agent acts in violation of his or her ethical or legal duty to the principal, should that action terminate the agent’s authority to act on behalf of the principal? Why or why not?

3. If an agent-employee injures a third party during the course of employment, under the doctrine of respond eat superior, the employer may be held liable for the employee’s action even though the employer did not authorize the action and was not even aware of it. Is it fair to hold the employer liable in this situation? Would it be more equitable if the employee alone was held liable for his or her tortious (legally wrongful) actions to third parties, even when the actions were committed within the scope of employment?

4. How should immigration law be reformed? Does the United States have any ethical duties to undocumented (illegal) aliens who come here to work? How can the law be fair and balance the rights of immigrants, their families, the companies that employ them, and U.S. citizens?

5. Should the law prohibit discrimination against transgender persons? Why or why not?

Ethical principles—and challenging ethical issues—pervade the areas of agency and employment. As you read in Chapter 32, when one person agrees to act on behalf of another, as an agent does in an agency relationship, that person assumes certain ethical responsibilities. Similarly, the principal also assumes certain ethical duties. In essence, agency law gives legal force to the ethical duties arising in an agency relationship. Although agency law also focuses on the rights of agents and principals, those rights are framed by the concept of duty—that is, an agent’s duty becomes a right for the principal, and vice versa. Significantly, many of the duties of the principal and agent are negotiable when they form their contract. In forming a contract, the principal and the agent can extend or abridge many of the ordinary duties owed in such a relationship.