Former executive: My employer turned me into a scapegoat

In the event that you ran into legal trouble related to your job, you might expect that your company would rush to your defense. But as some high-level brokerage industry executives have demonstrated recently with their own commercial litigation, that’s not a safe assumption.

A third executive from insurance broker Marsh, Inc. has filed suit against the company, claiming it set him up for malicious prosecution in an investigation alleging misconduct in the brokerage industry. The suit was filed at the end of November.

The senior vice president was indicted in 2005 on charges of second-degree larceny, among others. The charges were dismissed in 2009, but the executive maintains that Marsh made him a scapegoat, thereby violating his constitutional rights and destroying his prospects of future employment. He also says the company refused to pay his legal costs in a timely matter. Marsh will now have its own legal costs to pay as it defends itself against his more than $150,000 lawsuit.

Marsh insists it met all its obligations to the VP by paying his benefits under a severance package, as well as $5.4 million in legal costs for his defense, despite the fact that he never went to trial.

The VP is the third Marsh executive to seek damages against the broker after losing a job due to the investigation by New York Attorney General Elliot Spitzer. Two other executives whose bid-rigging convictions were overturned have gone after their employers, accusing them of violating federal law and breach of contract. They say they were fired without cause or the severance and stock bonuses they were entitled to after Spitzer filed a complaint against Marsh. The managing directors, both of whom were indicted for alleged bid-rigging but later exonerated, say Marsh violated the federal Employee Retirement Income Security Act.

Marsh has vowed to vigorously defend itself against the vice president’s claims. What do you think your employer would do?

Source: Business Insurance, “Ex-Marsh exec McBurnie sues broker over Spitzer case,” Mark A. Hofmann, Dec. 11, 2011