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The Employer’s Obligation to Indemnify under Section 2802

California Labor Code section Section 2802 provides, in pertinent part,

“(a) An employer shall indemnify his or her employee for all necessary expenditures

or losses incurred by the employee in direct consequence of the discharge of his or

her duties, or of his or her obedience to the directions of the employer, even though unlawful,

unless the employee, at the time of obeying the directions, believed them to be unlawful.

[¶] . . . [¶] (c) For purposes of this section, the term ‘necessary expenditures or

losses’ shall include all reasonable costs, including, but not limited to, attorney’s

fees incurred by the employee enforcing the rights granted by this section.”

Section 2802 thus requires an employer to indemnify an employee who is

sued by third persons for conduct in the course and scope of his or her

employment, including paying any judgment entered and attorney’s fees and costs

incurred in defending the action. (Jacobus v. Krambo Corp. (2000)

78 Cal.App.4th 1096, 1100; Douglas v. Los Angeles Herald-Examiner (1975)

50 Cal.App.3d 449, 461; Grissom v. Vons Companies, Inc. (1991) 1 Cal.App.4th

52, 57; Plancarte v. Guardsmark (2004) 118 Cal.App.4th 640, 647; Los Angeles

Police Protective League v. City of Los Angeles (1994) 27 Cal.App.4th 168, 177.)

As long as the employee is acting within the scope of his or her employment, the

right to indemnity is not dependent upon a finding that the underlying action was

unfounded. (Jacobus v. Krambo Corp., supra, at pp. 1100-1101; but see O’Hara

  1. Teamsters Union Local # 856 (9th Cir. 1998) 151 F.3d 1152, 1158.)

The elements of a section 2802, subdivision (a) cause of action, as

delineated by the statutory language, are: (1) the employee made expenditures or

incurred losses; (2) the expenditures or losses were incurred in direct consequence

of the employee’s discharge of his or her duties, or obedience to the directions of

the employer; and (3) the expenditures or losses were necessary. The second

element, at issue here, is met if “the conduct defended against was within the

course and scope of employment.” (Jacobus v. Krambo Corp., supra,

78 Cal.App.4th at p. 1101; Devereaux v. Latham & Watkins (1995)

32 Cal.App.4th 1571, 1583.) “In determining whether for purposes of

indemnification an employee’s acts were performed within the course and scope

of employment, the courts have looked to the doctrine of respondeat superior.

[Citations.] [¶] Under that doctrine, an employer is vicariously liable for risks

broadly incidental to the enterprise undertaken by the employer — that is, for an

employee’s conduct that, in the context of the employer’s enterprise, is ‘not so

unusual or startling that it would seem unfair to include the loss resulting from it

among other costs of the employer’s business. [Citations.]’ [Citations.]”

(Jacobus v. Krambo Corp., supra, at p. 1101; Plancarte v. Guardsmark, supra,

118 Cal.App.4th at p. 648; Devereaux v. Latham & Watkins, supra,

32 Cal.App.4th at pp. 1583-1584.) An employee’s conduct may fall within the

scope of his or her employment “even though the act does not benefit the

employer, even though the act is willful or malicious, and even though the act may

violate the employer’s direct orders or policies.” (Jacobus v. Krambo Corp.,

supra, at p. 1102.)

Whether an employee’s acts are within the scope of employment is

ordinarily a question of fact, but may be resolved as a question of law when the

material facts are undisputed and no conflicting inferences are possible. (Farmers

Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 1019; Jacobus v.

Krambo Corp., supra, 78 Cal.App.4th at p. 1103.)