Question

MEMORANDUMTo: StudentFrom: SupervisorRe: New Client, Career Institute of America, Inc.

(CIA)

Date: December 6, 20—

FACTS: We have just met a new client, the CEO of Career Institute of America, Inc. (CIA). Although the business was formed a year ago as a nonprofit corporation, they’re not sure they’re happy being a nonprofit. CIA is a classroom and online education organization that specializes in training students in the United States auto industry, one of this country’s largest industries. Their founder, who also serves as the CEO of CIA, would like to retain most of the ownership and control of the company, since it is really his enterprise. He also has some concerns about the independent contractor agreement their instructors must sign when they agree to work for the company. He wants to be sure they’re not construed as employees of the company and are viewed as true independent contractors. Note that most of the company’s income is from online trainingcourses. You should also know that they received a U.S.Department of Labor retraining grant for the instruction they’recurrently providing and that this type of grant is awarded onlyto nonprofit educational organizations. Even though CIA wasable to obtain this grant as a nonprofit institution, they realizeit was a one-time grant. They must make their income fromtuition for online courses and in the two small classrooms inwhich they teach traditional courses. This is why they’re notnecessarily opposed to changing their form of business from anonprofit organization to a for-profit business.You should further know that the employment contract theyprovide to their instructors looks as if it was designed by anamateur and may not comply with the legal requirementsfor a valid independent contractor agreement.RESEARCH ASSIGNMENT: Research two areas of law andprepare a memorandum addressing each area, so the clientcan be properly advised how to proceed.

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