What would YOU do?

ready2fly

ready2fly

Well-Known Member
Before I left last night, our office manager placed a form in my IN-box. The form was to be filled out so that the firm could get some kind of Fiduciary Indemnity Bond Insurance from one of the big insurance companies.

The form started off as most do - asking for my name, address, social security.

Then it got more personal than anything I've ever seen asked by an employer. It asked for the following:

Authorization to run a credit check
Have you ever filed Bankruptcy?
Do you have a mortgage?
How much?
What is your payment?
With who?
List other debts and amounts.
Parents names and address (if living)
Three personal references
Bank accounts...
Work history

My office manager then informed me today that ALL employees must fill out ALL of the information or the firm would not get the insurance.

I informed her that I would happily provide the information that the firm already had, but would not - under any circumstances - provide the personal, financial information as I have never had any employer ask for that information and they have no right to ask for it now.

I was told that she would have to relay that to the Partner of the firm when he gets back on Monday, to which I replied that would be fine and I'd be glad to talk to him myself, but I will not provide the information.

Sorry so long.

What would YOU do?

R2F
 
That's a tough one R2F. You're the legal expert here. Sounds like you handled it fine to me. Wish I could offer more advice.
 
I'd have done the same as you; that stuff's WAY out of line.. Seems to me that they want to know how deep the firm's partners' pockets are so they have somewhere to go to recoup their losses if they're forced to cover a claim of some kind. (A disturbing trend in the insurance industry, really; sue whoever you can, including the policyholder if necessary, to recover losses from a claim payout. If that's the case, who needs insurance? All you need is a good pool of trial lawyers.)
 
As you guys know I work in finance, and those questions are not uncommon. The things I have not asked on your list are parents names (although a competitor asks for spouse names), and mortgage payment and other mortgage stuff (size, wuth who, etc). We get all the info about that when we pull the credit.

I am a bit confused about what 'Fiduciary Indemnity Bond Insurance' is. Is the company purchasing debt? Insuring against debt? And why they can not do it under the corporation, which then none of this information would be required. Also wouldn't it only be members who need to fill out this information rather then regular employees? Just things going through my head.

I think you are right for asking these questions, I would also ask the points I made above, and until you understand what is going on and why they need your information (and you believe them), I would refrain.
 
Here's what it reads just prior to the signature line:

"I also agree to repay [insurance company] for any costs, dmages, actual attorney fees, and expenses, which [insuance company] may sustain as a result of a loss I cause under the fidelity bond (think I mistakenly typed "fiduciary" above..), while acting alone or in collusion with another or others, or in enformcing this agreement."

Ummmmmm - HUGE F-bomb off on that one!

FWIW - I have already contacted an attorney friend of mine (funny, because I work for attorneys...).

This should be interesting.

Wonder if my FBO needs any new line guys?
 
Thanks Iain:

[ QUOTE ]
Also wouldn't it only be members who need to fill out this information rather then regular employees?

[/ QUOTE ]

That's what I asked my office manager. I asked if maybe she had given this form to the "regular" employees by mistake because, in reading the form, it seemed to be directed in anybody who had a FIDUCIARY interest in the firm.... i.e... the partners... not guys like me.

It also asked:
"Are you authorized to sign checks for this organization?"

"Do you have accounts, funds, securities, or merchandise under your control?"

Bottom line - I think the insurance company rep and my office manager have got their wires crossed.
 
[ QUOTE ]
Here's what it reads just prior to the signature line:

"I also agree to repay [insurance company] for any costs, dmages, actual attorney fees, and expenses, which [insuance company] may sustain as a result of a loss I cause under the fidelity bond (think I mistakenly typed "fiduciary" above..), while acting alone or in collusion with another or others, or in enformcing this agreement."


[/ QUOTE ]

THAT'S EXACTLY IT!!!! They want to be able to go after your house to recover their loss. I wonder what sort of premium they're charging for this "service"?
 
R2F, I think your office manager is confused. I believe this is meant for partners only. Not sure what your position is within the firm, but insurance like this is to cover anyone who has a holding interest in the firm. Especially if the firm is a Limited Partnership.
 
R2F, I don't blame you for being uncomfortable, but I don't really think that the request is unusual.

When I worked for an insurance agency, we did a couple of bonds for some of our business clients. I can tell you that the more money is involved, the more nosy they get.

There is also the fact that, if the insurance company has to pay out under the bond, they can seek to collect from your company. It isn't like insurance where they pay and the only thing that happens to you is that your premiums go up next year. They may be trying to make sure that there are sufficient assets in your company to collect if necessary.

The main question on that line of reasonging is that if you aren't a partner, then you shouldn't be held liable for company business.

Oh heck, why are you asking me? Aren't you the lawyer?
grin.gif
 
[ QUOTE ]
"I also agree to repay [insurance company] for any costs, dmages, actual attorney fees, and expenses, which [insuance company] may sustain as a result of a loss I cause under the fidelity bond (think I mistakenly typed "fiduciary" above..), while acting alone or in collusion with another or others, or in enformcing this agreement."



[/ QUOTE ]

Ding ding ding ****BS ALERT**** ding ding ding

Good thing you actually read what you are signing (unlike most people). I wonder how many of your fellow employees signed that without reading it.
 
Okay - here's the latest. Had a conference with the office manager who informed us that this was indeed an indemnity agreement (after she was asked if she knew what an indemnity agreement was and didn't, but still expected us all to sign it).

Basically, it boils down to this:

If you steal from the firm or bill time for tasks you did not do - or commit "collusion" and/or cause any damages to the firm - then you will be PERSONALLY liable for any and all damages.

Basically guys - no damn way I'm signing this.

I understand that my employer wants to cover his ass to his clients, but not at my expense.
 
R2F -

I wouldn't have signed it.

Is the company in ok shape financially?

My experience has been when a company starts asking for weird sh*t from the employees something else is going on - something usually bad.
frown.gif
 
Well, financially speaking - the law firm is doing quite well.

It stems from a couple of things:

1. The woman who I replaced had billed for time when she wasn't even in the office and also for tasks that the secretary had done, but she took credit for.. and the client, understandibly, was pissed and wouldn't pay. BUT, now the firm cannot go after her for that, so they're asking us to sign an indemnity agreement saying that we will be good and honest employees and that we agree to let them come after our personal assets if we f*#K them over.

It's basically asking us to be "bonded". If I were a licensed professioinal - like an attorney - I'd sign it. BUT I'm a paralegal and no paralegal in the United States is "licensed" to practice law. THere are paralegals who are CERTIFICATED and others, like me, that are Degreed, but none who are licensed to practice law.

I see no need for the bond myself.

2. The office manager who is so gung-ho about this left about 200 blank checks sitting on the printer last week when she printed them - then went home for the day.

I think - if I'm understanding everything - it MIGHT come down to "Sign it or lose your job"... that being the case - I will choose the latter.

I'm not giving anybody the go-ahead to attach my assets. Period.

I'll keep you updated. Not looking good right now though.
 
Exactly. Do you actually bill for time? I thought only the attorney's did that. Albeit, they billed your time to the client. Therefore, in essensce, they are liable since they actually billed the time. Comes with the territory. You should not have to sign this. If they can you for not signing it, looks like you might have a case of termination w/o just cause. Probably need to talk with an attorney before it comes to that. Just to be safe.
 
Oh yes - Paralegals do indeed bill time. Part of the job. Basically, an attorney can do everything an attorney can do except:

1. Give legal advice
2. Set fees
3. Be a "mouthpiece" in court.

One of the reasons why I'm VERY careful on these boards NOT to give LEGAL advice that does not include - "Talk to an attorney".

But, we do ALL the research. ALL the client prep (in most cases). ALL the case workup. The summaries, .... the meat and potatos of the case.

WE just get paid about a quarter to a sixteenth of what the attorneys do... and our time is billed out for less.

Example: Attorneys time is billed out anywhere from $120/hr. for an associate to $250 - $300/hr. for a partner (these are VERY general figures).

My time is billed out at $65/hr. - but you can guaranteed I make a VERY small fraction of that.

But - I am not considered a "professional" in the state of Florida - or any other state for that matter. My position does not require a license. AND - up until today - I had NEVER heard of a Paralegal having the need to be "bonded".

OH - and I did talk to an attorney (a buddy of mine who does not work here) and he said - basically - he's never heard of it in the legal field and the decision was mine to make and that it was a "tough deal", but not uncommon for employers to ask the employees to indemnify themselves for any possible damages.
 
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