We are most likely going to have to pay out damages to a former employee for alleged sexual harassment. The accused supervisor was acting in complete disregard for our company policies. What I want to know is whether it is possible for my company to sue him for indemnification. Is that legal?
I doubt it. Does the employee have a written contract that provides for their indemnity by the company, or for their duty to the company in a case of malfeasance? Is there a company poilicy that holds the employees liable for their disregard of company policy?
The company can't act like it had no control over its own employee, either, which is why the liability attaches to the company. The company is supposed to take action once the harassment is reported, so it doesn't continue.
You should have the company lawyer address this, since they know all the facts of the situation.
I'm only licensed in CA. Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
It is possible to sue, but not likely successful. This is because California Labor Code section 2802 obligates California employers to indemnify an employee for all expenditures and losses "necessarily incurred in direct consequence of the discharge of [the employee's] duties."
State and federal courts in California have interpreted Labor Code section 2802 to require indemnification of an employee's legal fees and costs when sued by a third person, as a consequence of conduct which the employee engaged in when discharging his duties.
However, in the context of sexual harrassment cases, the law is less clear and depends upon the specific facts. The factual question comes down to whether the former supervisor employee was acting within the "course and scope of employment" and the more specific statutory term "in the discharge of his duties" in Labor Code section 2802.
If the plaintiff/victim was really harrassed (as opposed to being discriminated against), there is more liklihood of facts showing conduct outside the scope of necessary job performance and/or conduct presumably engaged in for personal gratification, which conduct is not necessary for management of the employer's business or performance of the supervisory employee's job.