Employment Agreement Indemnification

It is not uncommon for employment contracts and collective agreements to include explicit compensation from an employer to its employee for the debts incurred by the worker during his or her employment. There are two basic types of compensation agreements, says Robert J. Milligan, JD, a lawyer at Milligan Lawless in Phoenix. One of these is the common law requirement that the party who is solely responsible for a claim must compensate another named party in a lawsuit. Sullivan cites the example of a doctor helping a security guard detain a combative head injury. In this scenario, the doctor may be obliged to reimburse the hospital all costs if the hospital is later named as a defendant in a patient lawsuit. “Compensation clauses are not appropriate in medical employment contracts,” Sullivan argues. “In addition to financial risks, contractual compensation can also void a doctor`s medical insurance.” Keith Clouse is an employment law specialist with more than 25 years of experience representing C-Suite executives and executives, contractors, physicians and businesses in complex litigation, arbitration and negotiations. Senior managers, physicians and other professionals routinely rely on Mr. Clouse for labour contract expertise and advice, non-compete agreements, severance pay, stock bonuses, commercial litigation and breach of trust obligations.

He is Board Certified in Labor and Employment Law of the Texas Board of Legal Specialization. He can be reached at keith@clousebrown.com. By accepting contractual compensation, a physician may be required to grant an employer full reimbursement of events to be compensated. “Sometimes this compensation may apply, even if the employer`s negligence may have caused its harm,” says Sullivan. For example, when a doctor is accused of having a heart attack in a busy emergency room, a compensation agreement could force the doctor to bear all the costs incurred by the hospital to defend the complaint, even if the misconduct occurred because the hospital severely underestimated the emergency department. The general principles of compensation are governed by statues of the state. Many companies are based in Delaware and other states often comply with Delaware`s compensation law. In general, a company may compensate its officers if they acted in good faith, in a manner reasonably considered to be in the best interests of the company and which had no reasonable reason to consider their conduct to be unlawful. In some states (minnesota, for example), the power to compensate a corporate officer becomes an obligation, with compensation mandatory for certain types of rights. “In addition, adding contractual compensation for a medical group`s agreement with a hospital can complicate unnecessary procedures for erroneous procedures,” Sullivan explains. In order to avoid compensation in litigation, several defendants may reveal undesirable facts about the other defendants, thereby increasing the liability of all defendants. For example, a defendant obstetrician argued that the hospital should compensate him because a hospital was not under-supervised.1 In return, the hospital complained that the resident had to compensate him because the resident had withheld important information from those present and provided inadequate care.