Criminal Indictment of Supervisor May Not be a Claim “By or on Behalf of” Minor Employee under EPL Policy
The U.S. District Court for the Southern District of Ohio, applying Ohio law, has held that it cannot conclude as a matter of law whether a criminal indictment brought by the state based on sexual harassment of a minor employee constitutes an employment practices claim made “by or on behalf of” an employee under a company’s EPL policy. Twin City Fire Ins. Co. v. RK Family, Inc., 2025 WL 2772462 (S.D. Ohio Sept. 29, 2025). The court found the phrase “by or on behalf of” ambiguous and construed it against the insurer in denying the insurer’s early dispositive motion.
A minor employee of a chain farm supply store alleged sexual harassment by a supervisor. Following the incident, three actions ensued: (1) a 2021 criminal indictment by a grand jury charging the supervisor with rape, sexual battery, and compelling prostitution; (2) Charges of Discrimination brought in 2022 by the minor employee before the Ohio Civil Rights Commission and the EEOC; and (3) a civil lawsuit brought in 2022 by the minor employee against the store manager, the store, and its parent company.
The store and parent company sought coverage under their 2022-2023 EPL policy. The insurer filed a declaratory judgement action asserting that there was no coverage for the criminal proceeding, Charges of Discrimination, and civil proceeding because they constitute a single “Employment Practices Claim” arising from the same “Wrongful Acts” and “Interrelated Wrongful Acts,” and that claim must be deemed first made in 2021, outside the policy period.
The Policy defined Employment Practices Claim to include “any of the following made by or on behalf of an Employee,” including “a criminal proceeding commenced by the return of an indictment or similar document.” The insureds argued that although the minor employee was an employee of the chain farm supply store, the indictment brought against the supervisor was not made “by or on behalf of” the minor employee. Accordingly, the insureds contended that the criminal proceeding did not meet the definition of an Employment Practices Claim and thus cannot be deemed interrelated to the civil lawsuit or Charges of Discrimination.
Ruling on the insurer’s motion for judgement on the pleadings, the Court held that it could not conclude as a matter of law that the criminal indictment qualified as a claim “by or on behalf of” the minor employee under the policy to qualify as an “Employment Practices Claim” such that it may be “interrelated” with the civil lawsuit or Charges of Discrimination. The court reasoned that the indictment was brought by the state in its sovereign capacity, and thus it did not depend on an insured’s decision to initiate or pursue relief “by or on behalf” of the minor employee. The court observed that the contract did not define the phrase “on behalf of” and therefore determined that it was ambiguous. The court construed this ambiguity against the insurer and denied its motion for judgement on the pleadings.
