Legislature(1993 - 1994)
02/09/1994 01:15 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 277 - INDEMNIFICATION OF PUBLIC EMPLOYEES Number 490 REP. PORTER informed the committee that the Department of Law had rewritten HB 277 basically with the same content, but so it makes better sense. He said the definition of public employer means the state or quasi public corporations, but excludes University of Alaska, municipal school districts or Rural Education Attendance Area, and the reason is there is existing state law that already provides this benefit, indemnification, for those employees. REP. PHILLIPS addressed the definition and said she was concerned the committee was setting a precedent in statute, and that definition can be used for any case. REP. PORTER explained that the definition is for the purposes of this act. Number 547 SUSAN COX, Supervisor, Special Litigation Section, Department of Law, testified that HB 277 had been reworked from the one the committee saw a week ago, broken down into several statutes, and made into a chapter to make the legislation more manageable. She highlighted a few things: one being to address the concern that employees would be terminated to avoid having to indemnify or defend them, a provision has been added to make it clear that former employees are covered the same as current employees if they are sued about something that pertains to their former employment. Number 575 MS. COX then addressed a new section that discusses when an employee is paying the tab fully for defense and indemnification, they can settle a case without the employee's consent as long as they settle all the claims against the employee. Number 584 REP. DAVIDSON indicated he still had a concern about some settlements that leaves questions about the reputation of an employee. Number 592 MS. COX replied there are two things: one, the common practice of including a provision that says nothing in this settlement is an admission of guilt, or responsibility or liability; and two, if the employee feels maligned by litigation, he or she can bring a counter-claim against the individual. She added that the state doesn't pay costs in this case. Number 620 REP. DAVIDSON asked, what if there was just cause to counter-claim, how do you ensure that the suit doesn't create a bad situation for that person? Number 633 MS. COX responded that the employee could strongly object and an agreement could be made by the state, and the employee can go on and continue to litigate, but at his or her own expense. Number 655 REP. DAVIDSON expressed concern that the resolution is money versus whether someone was right or wrong. Number 661 REP. PORTER observed that he had been in the employee's position personally and tried to address it, but all of this, for these kinds of employees, is just policy. He continued, saying to try to balance the rights of an individual versus the rights of the employer is basically the direction HB 277 went, and he agrees that the employer cannot, by settlement, sign away the rights of the employee to take further action if he or she chooses to do so. Number 676 REP. GREEN asked if the litigation record could have an adverse effect if the employee pursued the case. Number 688 MS. COX indicated she couldn't conceive of circumstances where that would be the case. She said the claim you may have against someone else, i.e., defamation, would arise from certain facts, and so it wouldn't matter what was developed in the first lawsuit in terms of what's on the record, so the issue is going to be what happened, and will most likely have nothing to do with the lawsuit. MS. COX added that many attorneys don't put an individual's name on the suit, usually it is the employer who is fully engaged, but not the individual. Number 743 REP. PHILLIPS returned to the subject of the definition of public employer and said it needs to be clarified that it only applies to this act. Number 750 The committee discussed various ways of handling Rep. Phillips' concerns. Number 796 REP. PORTER introduced Amendment No. 1, which would add that written notice must be given to the employee if it is the employer's intention not to provide defense, and the notice must be given within 60 days in writing after receiving a request for legal defense. Number 854 REP. GREEN moved Amendment No. 1. Hearing no objection, Amendment No. 1 was adopted. Number 861 REP. PHILLIPS introduced Amendment No. 2, which would address the definition of public employer and state that it is "for the purposes of this act only." TAPE 94-20, SIDE B Number 000 The committee discussed Amendment No. 2 and asked for Legal's interpretation of the amendment. Number 083 TERRY CRAMER, Legislative Legal Counsel, Legislative Affairs Agency, drafter of HB 277, told the committee that it was contrary to drafting procedures to include that type of definition. She said HB 277 would become statute, and the amendment implies that it's not a chapter. The committee discussed Ms. Cramer's interpretation and Rep. Phillips asked that Amendment No. 2 be withdrawn. Number 165 REP. GREEN made a motion to move CS HB 277(JUD) out of committee with individual recommendations and zero fiscal notes. Hearing no objection, it was so moved. ADJOURNMENT CHAIRMAN PORTER adjourned the meeting at 2:30 p.m.