Thursday, November 2, 2006
David Hechler has a piece in Corporate Counsel and law.com here that notes that federal prosecutors are not the only ones trying to stop the payment of attorney fees to indicted corporate employees. The article discusses how AG Spitzer has also been inserting a "no indemnification" clause in some of his agreements.
Corporate employees are increasingly subject to agency investigations, state prosecutions, and federal investigations. When an individual is guilty, having a no indemnification clause may seem acceptable to some. The problem with this reasoning is that we operate in a system of justice in which individuals are innocent until proved guilty and the deprivation of attorney fees may significantly affect the ability of the accused to respond to the government prosecution.