The County Attorney’s Office is proposing an amendment of the county’s Defense and Indemnification Plan (the “Plan”) for employees. The Plan was first adopted in 1976, amended in 1985, and has remained unchanged since that time. In light of statutory changes, Hennepin County changes (i.e., creation of Hennepin Healthcare Systems, Inc.) and judicial decisions, the Plan needs to be updated. Attached as Exhibit A to this Board Action Request is the proposed Second Amended Plan.  Attached as Exhibit B is the Amended Plan from 1985, which is currently in effect. The most significant change needed is to explicitly outline procedures to be employed in the (rare) situations in which the County declines to defend and/or indemnify an employee and to ensure the employee’s right to challenge such a decision.

The proposed Second Amended Plan, like the original one, provides defense and indemnification from civil lawsuits filed against an employee, officer, or volunteer arising out of an alleged act or omission occurring in the performance of the duties of their position. The proposed Second Amended Plan also explicitly outlines an internal Hennepin County procedure for employees and others entitled to defense and indemnification to challenge a decision to deny defense and indemnification. This internal process can then be reviewed by the Minnesota Court of Appeals if the employee, officer, or volunteer believes the denial was improper. Even though this internal process is not detailed in the Amended Plan from 1985, these procedures are currently required by law and so have been followed by Hennepin County in the few instances where it has denied defense to an employee. The proposed Second Amended Plan will spell out this internal process and provide greater transparency to employees and others about the decision making process and the employees’ right to judicial review.  The proposed Second Amended Plan (attached as Exhibit A) was presented to the county’s management-labor committee and no objections were raised.

It is important to note that the proposed Second Amended Plan does not change the scope of when employees and others are entitled to defense and indemnification. The standard is found in Minn. Stat. § 466.07 and requires defense and indemnification if the employee, officer, or volunteer was acting in the performance of the duties of the position and was not guilty of malfeasance in office, willful neglect of duty, or bad faith.

Over the past decade, Hennepin County has denied defense to an employee in very rare circumstances (all involving significant malfeasance). Our research indicates Hennepin County has denied defense and indemnification to an employee approximately 10 times in the past 25 years or so.