Keith Clouse is an employment law specialist with over 25 years of experience representing executives and executives, business owners, physicians and corporations in complex labour disputes, arbitrations and negotiations. Senior managers, physicians and other professionals rely resolutely on Mr. Clouse for expertise and advice on employment contracts, non-compete agreements, redundancy agreements, capital bonuses, trade secret disputes and breaches of fiduciary duties. He is a certified board in labor law from the Texas Board of Legal Specialization. He can be reached in keith@clousebrown.com. Answer #2: In California, it would not hold. In fact, the Labour Code requires employers to compensate employees. Interesting that it says “during the action inside the price and magnitude”. In some states, there may be a tiny opening that should say that if you acted outside your scope, then the company is not responsible and is not responsible for your action.2 If a plaintiff sues X and its entire management team, including Ellen Executive, for damages resulting from a data protection breach, one would expect Company X to offer a defense for the management team, while he is employed by the company.

However, a compensation scheme ensures that former executives are also protected. Therefore, if Ellen Executive has a indemnification clause in its employment contract, the resignation or retirement should not impair its ability to require Company X to consult or pay its defence costs. In summary, as a general rule, a worker is not required to compensate an employer for damages he causes in the course of his employment, unless the damage is due to “gross negligence” or intentional acts of injury. This is a general rule and there are some exceptions, for example. B when the employee is highly qualified and highly remunerated. In this case, the political concerns expressed above (lack of bargaining power and resources) do not preclude the imposition of compensation on the employer. Questions about the discussion The student was dismissed for an alleged reason and sued the employer (a lawyer who was his supervisor) for unlawful dismissal. The employer argued that the contract`s opt-out protected it from action by the worker. The court said that this is not what a compensation clause does and summarized the law of compensation in employment contracts. In cases of compensation, it is usually an employee who commits a legal differential that causes damage to a third party. The third party sues the worker and the employer, and the employer is ordered to pay damages to the third party. Then, the employer sues the employee who seeks “compensation”.

The Gichuru decision contained a very different situation. There, the employer attempted to use the indemnification clause as a shield against any claim by the worker for alleged fault of the employer, such as for example. B unlawful dismissal. The Tribunal decided that an opt-out clause in an employment contract did not prohibit a worker from bringing a complaint for breach of the contractual clause to be terminated. This is due to the fact that the guilty party cannot use a compensation clause to protect him from damages resulting from his unlawful act. Therefore, Gichuru had the right to pursue his complaint against the employer. 1. Do you think employers should be held liable for damage caused by their employees? One of the ways a compensation provision can provide protection is against the rights of an officer`s former employer. For example, Ed Executive leaves Company 1 to join Company 2. Ed Executive signs an employment contract with Company 2 that contains a indemnification clause stipulating that Company 2 Ed Executive releases and defends claims, damages, attorneys` fees and expenses related to Ed Executive`s obligations to Company 2. After Ed Executive starts working for Company 2, Company 1 sues him claiming that his new job in Company 2 is contrary to various post-reserved agreements contained in his employment contract with Company 1. .

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