Does employee's statutory right to indemnity for attorney fees in defending action obligate employer to pay for attorney who duplicates work of employer-provided attorney?
Labor Code section 2802, subdivision (a), requires an employer to indemnify its employee for "necessary" expenditures or losses incurred as a direct consequence of the employee carrying out his employment duties.
In Carter v. Entercom Sacramento, LLC (filed 9/3/13) 2013 DJDAR 11886, Carter, as an employee of defendant's radio station, helped conduct an ill-conceived water-drinking contest that resulted in the death of a woman. The woman's family sued the station and employee Carter, among others. Carter tendered defense of the action to defendant station's insurer. The insurer accepted the tender and appointed conflict-free counsel to represent Carter rather than the attorney of Carter's choice. Carter declined the appointed attorney and insisted on utilizing the services of separate counsel. When the insurer refused to pay for that separate attorney, Carter brought this action seeking indemnity under section 2802. The trial court found that none of the fees and costs Carter incurred after the insurer appointed the attorney to represent him were necessary expenditures, thus found in favor of Entercom.
On appeal, Carter claims he had an absolute right to choose his own attorney at the employer's expense. This, he stated, was especially so because he faced potential liability for punitive damages and potential criminal charges. The Court of Appeal, Third Appellate District, disagreed, finding the question of whether the fees and costs claimed were necessary, and thereby subject to the duty of indemnity under section 2802, is a factual one; Carter failed to show the trial court's determination lacked substantial evidence to support it.