Will my employer still cover my legal fees if I quit?
A former employee who was terminated is personally suing me for discovering criminal activity on his company computer. If I leave the firm, will my employer still be obligated to cover legal expenses? They signed an agreement with the law firm that they will cover all legal fees pertaining to the case.
3 attorney answers
The pertinent California statute is Labor Code Section 2802:
(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.
Based on your description of the dispute, it sounds like you made a good faith report of criminal activity as part of your work duties. If so, the employer has a duty to reimburse you for reasonable attorney fees. This is not necessarily the same as hiring an attorney for you, as you may potentially have to hire an attorney and get them to reimburse you. However, most of the time employers who are compelled to pay legal expenses under this section go ahead and hire the attorneys to represent the employee.
I think you'll need an attorney to review the signed agreement and the facts of your case to provide an exact answer to your question.
As a general rule, California Labor Code section 2802 requires an employer to indemnify employees for all necessary expenditures or losses incurred in direct discharge of employment duties. This statute requires an employer to reimburse and indemnify an employee for all legal expenses incurred in defending a third party lawsuit that is based on conduct within the course and scope of employment.
If the former employee is suing you for conduct that you were performing in the course and scope of employment, I think section 2802 would be applicable to your situation.
Likely yes, but it would be reckless to simply get some quick advice from an internet Q&A and rely upon it. Defending a lawsuit, even if you were to win, can be very costly. You need to be sure. It would be very wise for you to take the lawsuit and any communications you have had with the employer and the attorney defending you to an attorney solely duty bound to look out for your interests. There are several issues that can arise, including your right to independent counsel, separate from the company in such instances.
Good luck to you.
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