Office of the President

Policy on Legal Defense and Indemnification of University Employees and Representatives

 

I. Purpose
The University is committed to defending and protecting its employees and other representatives from liability in the fulfillment of their duties and responsibilities to the University. The purpose of this policy is to set forth the conditions and procedures for an eligible person to qualify for indemnification and defense. This policy replaces and supersedes the University’s Administrative Announcement No. 87-6 dated February 1987.  

II. Scope
This is a University-wide policy.

III. Definitions
1. “Eligible person” is any person who is or was a member of the Board of Trustees, Board of Regents, University officer or employee and who is or was threatened to be made a party to a proceeding. An “eligible person” shall include volunteers and students acting at the University’s direction. An “eligible person” shall be referred to as “the person” or “a person” throughout this policy.

2. “Expenses” means reasonable costs, disbursements and attorney’s fees.

3. “Indemnify” means payment on behalf of or by the University of any settlement, judgment, fine, penalty and/or other expenses actually and reasonably incurred in connection with a proceeding.

4. “Liabilities” means amounts paid or incurred in satisfaction of any settlements, judgments, fines or penalties.

5. “Proceeding” means a pending, threatened or completed civil, criminal, administrative or arbitrative action or suit, any appeal therefrom or any inquiry or investigation that could lead to the action or suit. “Proceeding” does not include internal University hearings, reviews or investigations, actions brought against an eligible person by the University, or legal procedures an eligible person initiated or proposes to initiate, unless such legal procedures were specifically authorized by vote of the Board of Regents.

IV. Policy
1. Subject to the following conditions, prohibitions and procedures, and if permitted by law, the University, in its discretion, may indemnify, or shall indemnify as required by law, eligible persons for liabilities and expenses as long as:

a. the person acted in good faith;
b. the person acted in a manner that s/he reasonably believed to be in, or not opposed to, the best interests of the University; and
c. with respect to any criminal proceeding, the person had no reasonable cause to believe that his or her conduct was unlawful.
2. Termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, by itself, create a presumption that the person failed to adhere to the standard of conduct required for indemnification.  

3. Nothing in this policy shall limit any other rights to which the person is entitled under any applicable University policies, employee handbook, Faculty Guide or collective bargaining agreements.

4. Notwithstanding this policy, the University reserves the right to make determinations regarding indemnification that are in the best interests of the University.

V.Conditions
An eligible person may be indemnified under this policy as long as the following conditions are met:

1. The person must supply the University with timely and appropriate notice of the actual or threatened proceeding by providing the Office of General Counsel with the original summons, complaint, charge, notice, demand or any other document or pleading received by the person as promptly as is reasonably possible but not later than seven (7) days from the person’s receipt of same. A delay in notifying the Office of General Counsel may disqualify the employee from indemnification if such a delay prejudices the University’s defense of the matter or increases expenses. The person shall not incur any expenses or otherwise act in the proceeding until a determination is made regarding indemnification.

2. The person shall provide the Office of General Counsel with all pertinent information and shall cooperate fully with the University in defense of the claim or action forming the basis for the proceeding.

3. The University shall have the right to select legal counsel for defense of the claim or action and to otherwise control the proceeding.

4. Any settlement, compromise or other voluntary disposition of the claim or action is subject to the prior written approval of the Office of General Counsel.

5. The person shall provide prompt written notice to the Office of General Counsel of any other entity that may be obligated to defend and/or indemnify the person. To the extent that indemnification may be available under any professional or other liability insurance policy required to be in effect that covers the person, the University, in its discretion, may require that the person exhaust any available benefits from such other entity and/or insurers.

6. Upon request by the University, the person shall provide prompt written notice to the Office of General Counsel of any personal or other insurance coverage that may be available for defense and/or indemnification of the matter. The University, in its discretion, may require that the person exhaust any available benefits under such insurance.

7. The person shall make no statement, oral or written, regarding the claim, action or subject matter of the proceeding without prior written permission from the Office of General Counsel.

VI. Prohibitions
1. The University shall not indemnify a person if there is a judgment or other final adjudication that the person:

a. acted or failed to act in breach of his or her duty of loyalty to the University;
b. acted in bad faith or in knowing violation of the law; or
c. received an improper personal benefit.
2. The University shall not indemnify a person who commits an act with the intent to harm or injure if there is a judgment or final adjudication that establishes such intent unless, following an investigation, the University determines, in its discretion, that the specific findings are unwarranted.

3. The University shall not indemnify a person for awards of punitive or exemplary damages unless, following an investigation, the University determines, in its discretion, that the specific award is unwarranted.

4. The University shall not indemnify a person for actions or omissions while the person was on an unpaid leave of absence from the University, unless the University, in its discretion, determines that the person was properly engaged in activities consistent with and similar to his or her University responsibilities.  
 
VII. Procedures
1. Indemnification under this policy shall be made by the University only with respect to a specific proceeding and after a determination has been made that:
a. the person meets the applicable standard of conduct; and
b. applicable conditions are satisfied; and
c. indemnification is not barred by the prohibitions; and
d. indemnification, in the University’s judgment, is proper under the circumstances.
2. The determination regarding indemnification shall be made by the Office of General Counsel in consultation with the appropriate supervisor and/or other University officials.

3. The determination to indemnify a person may be made at any time. Should the University learn of material information that would render indemnification inappropriate, it may revoke the indemnification and seek restitution for any amounts paid on behalf of the person.

4. In proceedings in which both the University and an eligible person are parties, the University shall have discretion to determine if an actual, apparent or potential conflict of interest exists between the University and the person so that separate representation for the person is appropriate. If the University, in its discretion, determines that joint representation of the University and the person is inappropriate, the person shall select outside counsel satisfactory to the Office of General Counsel.

In such instance, the Office of General Counsel may impose additional conditions, such as provision of periodic status reports, and/or require that information be provided that will enable the University to monitor the cost and quality of the representation and compliance with applicable insurance requirements.

5. If a member of the Office of General Counsel is a party to the proceeding, decisions that are to be made by the Office of General Counsel under this policy may be made by the President and/or the Board of Regents.

VIII.
Responsible Offices
President
Office of General Counsel
Office of Board Affairs

Approved  
This policy was approved by the Board of Regents on December 6, 2012. It replaces and supersedes the University’s Administrative Announcement No. 87-6 dated February 1987.

Effective Date

December 6, 2012

 
 
Contact Us

Office of the President
(973) 761-9620
Presidents Hall

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