Think your government
employer will protect you? Think again.
by Randall K. Edwards
There are a lot of people
who work for the government at some level or another, from the President of the
United States, at the federal level, to the guy who fixes potholes in front of
your house, on the local level. In addition to full-time government employees,
there exists a host of volunteers and part-timers who also contribute to our
government, from volunteer firemen to part-time school board members. Every one
of these folks can be sued in connection with their government job.
Unfortunately, most of them have no idea of the possibility that they may have
some personal liability for carrying out their duties, and that their own
personal fortune, such as it is on a government salary, may be at risk.
Let’s start off with a
real-life example – one I’ve actually seen during my years working in and out of
government (I’ve alternatively been a Deputy City Attorney and then Chief Deputy
City Attorney in Reno, Nevada, an Assistant City Attorney in Salt Lake City,
Utah, and outside [private] counsel to various governmental entities and
Let’s suppose that you are
a part-time school board member in a school district where a teacher is accused
of sexually abusing one of his students. Let’s further suppose that this is the
third such instance of claimed sexual abuse by a teacher in your district in the
past two years. Parents are outraged, the newspaper is editorializing and the
political heat is on to do something. Among the things that are done is a
lawsuit brought by the family of the latest victim against not only the teacher
(who, of course, has been fired from his job and has no money), but also against
the school district administration and the school board members individually.
The claims against you, as a board member, are that you knew or should have
known that your district's hiring, retention and review policies were
inadequate, and that your failure to have done anything meaningful about them
constituted not only negligence but malice and/or reckless disregard for the
rights of the students in your district. There’s a claim brought against you for
punitive damages, among other claims.
You go to your school district’s attorney and demand defense and indemnity as a
school board member, coupled with a few choice words about the incompetent
administration of your school district. (Defense is where the government
provides a governmental attorney to represent the official; indemnity is where
the government pays any damages assessed against the official). The school
board’s attorney informs you that the plaintiff’s lawyer can’t get any punitive
damages against the district itself, because under the governmental immunity
statute of your state, no such damages are allowed (and that the same is
generally true even if a claim is brought in federal court). He also tells you
that the district will cover you in the unlikely event that there is an award
against you for negligence. He explains to you that this is due to a concept
known as “sovereign immunity,” a holdover from English common law that says that
the “sovereign” (in England, the king, and in modern America, the government)
can do no wrong and thus can’t be sued. He also explains that while most
governments have waived their sovereign immunity by statute, there are also
exceptions to that waiver, which include some types of claims for negligence of
public officials acting within the scope of their duties. Your agency’s lawyer
explains that under the statutes of your state, the government is duty-bound to
defend and indemnify any negligence claims against you.
“Great,” you say, “so I’ve got nothing to worry about.”
“Uh … not so fast,” says your school district attorney, “there have been
allegations against you personally for punitive damages, and it’s our
policy that the district may not indemnify you for those.”
“Huh?” you say. “Why not?”
“Well, it’s certainly
arguable that any action on your part that might lead to punitive damages, such
as malice or reckless conduct, are by definition outside the course and scope of
your duties … after all, it’s not in your job description to be reckless or
malicious,” he explains.
“But … but I wasn’t
malicious or reckless,” you protest. “I was just doing my job.”
“Well, we won’t really know
that until the jury comes back, will we?” replies the school district’s lawyer.
Suddenly that little knot
that’s been forming in the pit of your stomach turns into full-fledged nausea.
“Are you saying that I’m
not protected?” you ask.
At this point, the school board’s attorney starts to hem and haw, because he’s
caught in a quandary – in fact, a conflict of interest.
If, on the one hand, he
tells you that you should consider hiring your own lawyer to defend yourself
against any punitive damage claim, there’s a question as to whether you’ll have
to pay that lawyer out of your own pocket. After all, if there’s a determination
that your actions weren’t within the course and scope of your duties (and thus
you’re not covered under the governmental immunity statute), why should the
school district foot the bill for your lawyer to defend you personally?
If, on the other hand, he
tells you not to worry about punitive damages since, after all, he just doesn’t
see that a jury is going to hit you with them, he may be leading you down a
primrose path of relying on legal advice that may not be in your best interest,
but is only in the district’s best interest (since the district doesn’t want to
pay for a separate lawyer for you).
If he tells you that he’ll
defend the claims, but that the district can’t guarantee that it will pay for
any punitive damages, he’s put you in the worst of all situations, since the
district has no real monetary incentive to put up a vigorous defense of the
punitive damage claims, inasmuch as the district won’t have to pay for them
anyway. In fact, it may actually be in the district’s advantage to place any
blame on you individually so that the district can get off the hook from an
You’re in a mess,
especially since you know that the public mood is to find some poor schmuck to
blame for this disaster and you fear that it may well be you and the other
members of the elected body. And while you may actually have a pretty good case
on the merits, you fear that in this politically charged atmosphere, a jury may
well find someone to hang with punitive damages in order to send a message –
damages your school district has already made clear they won’t pay. When you
were running for office, you didn’t really see this kind of a train wreck on the
horizon. You were more interested in looking over budgets and teacher salaries.
So, what can you do? Or is it too late to do anything?
Here are a few suggestions:
First, find out now
whether you’re covered.
As a governmental employee or volunteer, the quickest thing you can do is to
find out long before trouble arises whether your governmental entity covers you
– both with respect to defense and indemnity – for any lawsuit related to your
job, including allegations of punitive damages. If you are on the government
payroll right now, a quick letter or email to your government lawyer should
start the ball rolling to get an answer to this question – or perhaps provide a
surprise that you may not be as secure as you thought. I believe that you
should insist on a written response from your entity’s lawyer – something you
can rely on and, if necessary, produce later in the event of a dispute over
whether you are covered by the entity or not.
Of course, it goes without
saying that most government workers – including volunteers – never think of this
until they find their name on the defendant line of a lawsuit, and by then it
may be too late to do much but worry about what’s going to hit you next. After
all, no one goes to their government job ever thinking that they’re going to get
sued as a result. After years of defending police officers, firemen, janitors,
truck drivers, city councilmen and others, the only thing I can tell you is that
it can and does happen, every day. And it can be devastating – to your credit,
your career and your peace of mind. So, a little checking on your part will
serve you well. It’s good to know now what you can – and can’t – count on.
Second, if you’ve been
sued, make sure you know where you stand.
The next course of action,
in the event that you do find yourself in a lawsuit in which you’ve been named
personally for punitive damages, is to either get a commitment in writing from
your governmental entity that you will be covered in all instances for all
matters arising from your governmental duties … including any claims of punitive
damages or, if your employer won’t give you this, to get your own lawyer to try
to convince the governmental entity that it would be in its best interest to
cover you (and send the bills for that lawyer to your governmental entity).
Another option after litigation against you arises – and, unfortunately, not a
very pleasant option – is for you to sue your governmental entity for a
declaratory judgment that you are covered by the governmental entity’s statutory
requirements of defense and indemnity. This is a mess for a couple of reasons.
First, it puts you in an adversarial position at the time that you most need to
be in the governmental entity’s good graces, and second, there is no guarantee
that you’ll win … thus not only leaving you “bare” with regard to punitive
damage coverage (and now having angered everybody in the government
administration), but also leaving you with a huge attorney’s fees bill that the
administration isn’t going to pay.
Most importantly, have an asset protection plan in place – now!
A savvy plaintiff’s
attorney is well aware of the potential conflicts I’ve listed above, even if the
average civil servant isn’t. Thus, the claimant’s lawyer will try as hard as he
can to find a basis upon which punitive damages can be alleged against the
government employee in order to drive a potential wedge between the employee and
his employer, since such a rift may well lead the governmental entity to a quick
settlement of the plaintiff’s claim rather than put that entity, its lawyers and
its administrators in the conflict of interest situation I’ve just laid out. Of
course, a quick settlement may save the government time, hassle and money in not
having to deal with the hard decisions of either extending coverage or, even
worse, denying coverage, for a punitive damage claim.
But what if the government
doesn’t want to settle – and also doesn’t want to defend or indemnify you for
the punitive damage claims against you? It’s during those times that you’ll
either a) lay awake at night wishing you had put some kind of personal asset
protection plan in place or b) rest easy at night, knowing that long before the
storms arose, you did.
You need to have an asset
protection plan in place today. You need to make sure that in the event that
it’s your name on the defendant line of that lawsuit, you can rest easy knowing
that no matter what, you’re not going to lose everything you own. You need to
make sure that your home, your retirement, your bank account and your future
earnings aren’t all going to be jeopardized by a claim against your government
employer and – by extension – you.
This is something that
you’ll need to take up with an independent asset protection professional. Your
entity’s attorney has no interest – in fact, can’t ethically advise you – on
making sure that your personal estate is protected in the event that the entity
and you are sued. You’ll need to sit down with somebody who represents your
interests – and only your interests – to figure out where you stand and what
your options are. The sooner you can do this, the better. By the time the case
hits the newspapers, it may be a bit too late to try to salvage what you can of
your fortune and your reputation.
There are a couple of
morals to this story.
First, you need to be aware
that taking a job with the government – or even simply volunteering for a
government board as a patriotic act of civic duty may be a bit more complicated
and involved than you may think, and that you need to go into public service
with both eyes open about whether you’ll be covered in the event that your
public agency has a liability meltdown.
Most importantly, you need to be aware that government employees and volunteers
– just like everyone else – need to have an asset protection plan in place
before trouble arises, just in case the public entity they serve goes sideways
Randall K. Edwards practices law in
Nevada, Utah, California and Arizona, with his primary office located in Salt