Ophthalmic Surgeons, Ltd. v. Paychex, Inc.

632 F.3d 31 (2011)

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Ophthalmic Surgeons, Ltd. v. Paychex, Inc.

United States Court of Appeals for the First Circuit
632 F.3d 31 (2011)

  • Written by Brett Stavin, JD

Facts

Ophthalmic Surgeons, Ltd. (OSL) (plaintiff) employed Carleen Connor in a position in which Connor handled payroll for OSL. Connor was made the designated payroll contact with OSL’s payroll provider, Paychex, Inc. (defendant). According to OSL, Dr. William Andreoni, an OSL agent, expressed to Paychex that he wanted Paychex to remit OSL employees their salary on a weekly basis. Nonetheless, while employed in her position, Connor frequently called in more than one week’s worth of payroll at a time. Dr. Andreoni expressed no objection to these payments. At some point, Connor embezzled OSL funds by ordering herself checks from Paychex that exceeded her salary. In turn, OSL filed suit against Paychex in federal court, claiming that Paychex should not have released the checks. Paychex moved for summary judgment. Paychex argued that even if Connor lacked the contractual authority to order the checks, she had apparent agency authority to do so. OSL argued that its actions did not establish any appearance that Connor had the authority to order paychecks that exceeded her regular salary. In response, Paychex argued that the appearance of authority was established by OSL’s placement of Connor in a position of authority as well as OSL’s failure to object to previous transactions authorized by Connor. The district court granted summary judgment in favor of Paychex, and OSL appealed.

Rule of Law

Issue

Holding and Reasoning (Torruella, J.)

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