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.

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.