New York: Court Carves Out Narrow Exception for Retroactive Application of Indemnification Agreement Against Employer

Ordinarily, where a New York employer executes an indemnification agreement after its employee sustains a work-related injury, a third party sued in tort by the injured employee may not raise the existence of the indemnification agreement to shield it from a damage assessment. Here, however, a state appellate court held that there was an issue of fact as to whether the employer had intended the agreement to have retroactive effect. Under those circumstances, the trial court appropriately refused to dismiss the third-party’s indemnity claim against the plaintiff’s employer. The court stressed that an indemnification agreement that is executed after a plaintiff’s accident may only be applied retroactively where it is established that (1) the agreement was made as of a date prior to the accident, and (2) the parties intended the agreement to apply as of that prior date.

Thomas A. Robinson, J.D., the co-Editor-in-Chief and Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is co-author of Larson’s Workers’ Compensation Law(LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance.

See Lorica v. Krug, 2021 N.Y. App. Div. LEXIS 3736 (3D Dept., June 10, 2021)

See generally Larson’s Workers’ Compensation Law, § 121.03.

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law

For a more detailed discussion of the case, see

Sign up for the free LexisNexis Workers’ Compensation enewsletter at www.lexisnexis.com/wcnews.