Employee Indemnification Under Minnesota Law

In cases in which a plaintiff sues his or her employer and names supervisors, co-workers, or members of management individually, it is important for the employer to assess whether the individual defendants are entitled to indemnification.  With respect to employees, Minnesota law requires an employer to defend and indemnify an employee for civil damages, penalties, or fines claimed or levied against the employee when the employee:

  1. Was acting in the performance of the duties of the employee’s position;
  2. Was not guilty of intentional misconduct, willful neglect of the duties of the employee’s position, or bad faith; and
  3. Has not been indemnified by another person for the same damages, penalties, or fines.

See Minn. Stat. § 181.970.

The statute contains several exceptions for:

  1. Employees of the state or a municipality;
  2. Employees who are subject to a contract or other agreement governing indemnification rights;
  3. Employees and employers who are governed under certain other indemnification statutes (e.g., directors, officers); or
  4. Indemnification rights for a particular liability specifically governed by other law.

Takeaways:  Minnesota law requires indemnification of employees if the statutory requirements are satisfied.  Even if an exception applies, it may be beneficial in certain circumstances for an employer to present a joint defense with individuals defendants.  In other cases, separate representation may be necessary.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on April 9, 2012, in Litigation and tagged . Bookmark the permalink. Leave a comment.

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