Baxter, at Age 45, Was Hired as the General Manager

question 12

True/False

Baxter, at age 45, was hired as the general manager of the CountrySide Shipping Company by Carrothers, the company president. The initial contract of employment was for a three-year term and was embodied in an exchange of letters between Baxter and Carrothers in 2008. At the end of the three-year term, Baxter continued on as general manager, receiving annual increases in salary, executive profit sharing, pension contributions, and discretionary bonuses, if business was exceptionally good in a given year. In January 2020, for no apparent reason, Carrothers called Baxter into his office, and told him his services were no longer required. Carrothers offered Baxter a week's salary as "severance pay." At the time of termination, Baxter was earning a salary of $70,000 per year, received company paid pension contributions of $5,000 annually, and, in 2019, had received $3,000 from profits shared, and a $5,000 bonus. At Common Law, Carrothers is required to give Baxter reasonable notice of termination.

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Definitions:

Not Excludable

A characteristic of a good or service where it is difficult or impossible to prevent individuals from enjoying its benefits, even if they do not pay for it.

Not Rival

A characteristic of a good where its consumption by one individual does not reduce availability or quality for others.

Excludable

A characteristic of a good or service that allows its owner to prevent others from using it, typically through the mechanism of property rights.

Rival in Consumption

A characteristic of a good whereby consumption by one individual prevents simultaneous consumption by another individual.