Indemnification Provisions – Always Remember to Check the Indemnity Clause of any Contract You Sign with a Third Party Vendor or Subcontractor to Ensure You are Protected
November 16, 2011Ohio Supreme Court Refuses to Recognize a Claim for Wrongful Discharge in Violation of Public Policy when an Employee is Fired after Complaining about Fire Safety
December 18, 2011In a recent ruling by a federal district court in Tennessee, Cracker Barrel Old Country Store, Inc. was denied reimbursement under its employment practices liability insurance (“EPLI”) policy for a settlement it had reached in a lawsuit filed by the Equal Employment Opportunity Commission (”EEOC”). In the case of Cracker Barrel Old Country Store, Inc. v. Cincinnati Insurance Company (N.E.Tenn., No. 3:07-CV-00303, 9/21-11) the U.S. District Court for the Middle District of Tennessee ruled that the restaurant chain’s insurance policies limited “claims” to actions or suits filed by employees. Since the EEOC was not an employee, the Court held that the policy did not cover the action. The Court also noted that it was immaterial that Cracker Barrel employees had filed EEOC charges which were the basis for the EEOC’s decision to sue Cracker Barrel. Plain and simple, the EEOC lawsuit was not brought directly by an employee and, therefore, the claim was not covered under Cracker Barrel’s EPLI policy.
Employers who maintain this type of coverage should carefully review the language in their EPLI policies to ensure coverage for actions brought by the EEOC and involving prior charges from employees.
