If an employee is sued for acts that were done within the course and scope of their employment, their employer is required to pay for any reasonable and necessary legal fees incurred in defending the lawsuit. This also includes the paying of a judgment if one is entered against the employee. (Cassady v. Morgan, Lewis & Bockius (2006) 145 Cal. App. 4th 220, 230.)
“California has a strong public policy that favors the indemnification (and defense) of employees by their employers for claims and liabilities resulting from the employees' acts within the course and scope of their employment.’ [Citation.] ... [S]ection 2802 codifies this policy and gives an employee a right to indemnification from his or her employer.” (Nicholas Laboratories, LLC v. Chen (2011) 199 Cal.App.4th 1240, 1247 quoting Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 952.)
This policy is codified in California Labor Code section 2802 which provides a basis for an employee to recover “necessary expenditures or losses” incurred in the course and scope of their employment. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful...(c) For purposes of this section, the term “necessary expenditures or losses” shall include all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section. (Cal. Lab. Code § 2802) The employee has a burden of establishing that law with is based on conduct that occurred within the course of employment. (Cassady, supra, 145 Cal. App 4th at 224-225.)
Any activity that is found to be incidental to the employment enterprise is generally found to have been within the course of scope of employment. In determining whether an activity was in the course and scope of employment, California courts will determine if the conduct was foreseeable form the employee’s duties. (See Lisa M. V. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal. 4th 291, 298-299.)
If you, or one of your employees, are faced with a lawsuit as a result of actions taken in the course of employment, call the Louderback Law Group today for a free consultation with one of our experienced employment attorneys.