Companies often stand by HR professionals and managers who are sued as individual defendants in employment litigation, so long as HR and managers have handled things properly. But if they haven’t, they may have to retain and pay for their own attorneys and be responsible for paying a share of any settlement, judgment, or verdict won by plaintiffs.
If managers have handled things by the book and still are unfortunate enough to be named as individual defendants — which happens — their company will normally stand by them and agree to a “united defense,” said Robin Shea, an attorney with Constangy, Brooks, Smith & Prophete in Winston-Salem, N.C.
“As a practical matter, this means that the company will retain and pay the lawyers, and the company will pay 100% of any settlement, judgment, or verdict,” Shea said.
On the other hand, if managers fail to comply with the law and corporate procedures, the company’s attorneys will probably not be able to represent them because the employee’s position could create a conflict of interest with that of the company, she added. “The practical effect of this is that the individual defendant would be paying for their own attorney and possibly paying at least a portion of the plaintiff’s recovery — in addition to the stress and job insecurity that could result from the noncompliance.”
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