Jacobus v. Krambo Corporation (March 3, 2000)
* Court: California State Appellate
* Trial Court: In favor of corporation
* Appellate Court: In favor of plaintiff
* Issues: Sexual harassment, employer indemnification, attorneys'
fees
Jacobus Facts
* Krambo Corporation is a small investment banking firm.
* Jacobus was the corporation's treasurer.
* Rosie Vera-Aviles was a secretary at the firm.
* Jacobus and Vera-Aviles were friends, engaged in sexual banter,
discussed their sexual encounters, shared erotic stories, etc.
* Jacobus was not Vera-Aviles's supervisor.
* Jacobus and the corporation's vice-president met with Vera-Aviles
about excessive use of the telephone; she became upset; she claimed that
she had been sexually harassed.
* Jacobus resigned; Vera-Aviles quit and sued; she settled with
Krambo Corporation; her case against Jacobus went to trial; she lost.
* Jacobus incurred $80,000 in attorneys, fees; he requested
reimbursement from Krambo; Krambo refused; Jacobu's sued Krambo for
reimbursement.
* The trial court ruled against Jacobus; the appellate court ruled in
favor of Jacobus.
Jacobus Analysis
* Under Labor Code section 2802, an employer must pay for an employer’s
defense with respect to lawsuits arising out of the employee’s
employment, even if the employment engaged in wrongful conduct.
* Believe it or not, the court concluded that Jacobus’s conduct
with Vera-Aviles "was simply part of the social intercourse that
occasionally occurs in modern office setting…. We conclude that
Jacobus’s consensual sharing of sexual material with Vera-Aviles was
no more usual or startling than other forms of everyday conversation
among coworkers."
* "In summary, we hold that in light of all the circumstances,
the mutual exchange of sexual materials between Jacobus and Vera- Aviles
was broadly incidental to their employment and Jacobus was entitled to
indemnification of his legal costs incurred in successfully defending
Vera-Aviles’ sexual harassment action."
* The court further held that Jacubus cannot recover the fees
incurred in bringing the indemnification action.
Jacobus Conclusion
This bizarre case may be useful in efforts by the Fund to recover
attorney’s fees in situations where the participant was found not to
have sexually harassed a co-worker.
