NJ Supreme Court Addresses Indemnification of School Employees

The Supreme Court of New Jersey recently addressed whether N.J.S.A. 18A:16-6 entitles a school board employee to indemnification for attorney fees and costs spent in defense of a civil action arising from the same allegations contained in a dismissed criminal indictment. In L.A. v. Board of Education of the City of Trenton, the court held that the statute requires indemnification unless there is proof by a preponderance of the evidence that the employee’s conduct fell outside the course of performance of his or her employment duties.

The Legal Background

Under the civil indemnification statute, N.J.S.A. 18A:16-6, a board of education employee may be indemnified for attorney’s fees and costs incurred defending civil actions arising out of an act or omission that took place in the course and scope of employment duties. Meanwhile, the criminal indemnification statute, N.J.S.A. 18A:16-6.1, requires a disposition of the criminal charges in favor of the employee before he or she is entitled to reimbursement for costs incurred in defending against the charges.

The Facts of the Case

The plaintiff, L.A., worked as an elementary school security guard for the Trenton Board of Education (Board). While at work, L.A. allegedly had unlawful sexual contact with two minor students, N.F. and K.O. Following an investigation by the Institutional Abuse Investigation Unit (IAIU) of the Department of Children and Families, L.A. was indicted on several related criminal charges. L.A. pled guilty to one count of second-degree endangering the welfare of a minor (N.F.) in exchange for dismissal of the remaining charges regarding N.F. and complete dismissal of the K.O. indictment.

K.O.’s guardian ad litem subsequently filed a civil complaint alleging that L.A. sexually assaulted K.O. and that the Board negligently hired L.A. Ultimately, the civil action settled without any admission of wrongdoing by L.A. or the Board. After the settlement, L.A. sought reimbursement for the attorney’s fees and costs incurred in defending the civil action.

The Administrative Law Judge (ALJ) awarded L.A. attorney’s fees and costs pursuant to N.J.S.A. 18A:16-6 after concluding that the Board had failed to meet its burden of establishing that L.A.’s conduct fell outside of the performance of his duties as an elementary school security guard. On appeal by the Board, the Appellate Division reversed, holding that indemnification was not warranted because the IAIU report substantiated K.O.’s allegations against L.A. and provided sufficient evidence to prove that the claim did not arise out of, or in the course of performance of, his employment duties.

The Court’s Decision

The New Jersey Supreme Court held that N.J.S.A. 18A:16-6 requires indemnification unless there is proof by a preponderance of the evidence that the employee’s conduct fell outside the course of performance of his or her employment duties.

In reaching its decision, the court held that the Appellate Division erroneously conflated the civil and criminal indemnification statutes. “We have a question of civil indemnification, which requires only a determination of whether the employee was acting within the scope of his or her employment duties. Thus, the criminal indemnification statute, N.J.S.A. 18A:16-6.1, is not germane to our inquiry,” the court explained.

The court further held that the ALJ’s summary decision was inappropriate because he failed to determine by a preponderance of the evidence whether L.A. was acting within the scope of the duties of his employment. The NJ Supreme Court further noted that the fact that an employee was charged with a crime but not convicted does not establish that the conduct was within the scope of his or her employment duties.

According to the court, the ALJ should have considered “ the extent of any factual overlap between the offenses alleged in the N.F. indictment, which L.A. admitted to, and the offenses alleged in the K.O. indictment” as well as “L.A.’s admission during his plea colloquy that he spoke inappropriately to K.O., or the evidence referred to in the IAIU report substantiating K.O.’s allegations.”

Because disputed issues of material fact exist regarding whether L.A. was acting within the scope of the responsibilities of his employment, the court remanded the matter to the Commissioner of Education to determine the issue.

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group

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