Retaliatory Discharge Not Covered Under CGL

General Liability	Personal Injury
Workers Comp	Indemnification

Randell Phelps (Phelps), who was employed by Emtech Machining & Grinding (Emtech), injured his back and foot while working. Phelps applied for and received workers compensation benefits. The record did not show when he was injured, but he was discharged in October 1991. Emtech sent Phelps a letter dated October 18, 1991, informing him that he was discharged as the direct result of fraudulent misrepresentations to Emtech concerning previous claims for workers compensation.

Phelps filed suit for wrongful termination, and the trial court granted Emtech's motion for summary judgment. Emtech then filed this action against Transcontinental Insurance seeking reimbursement and indemnification for its costs in the Phelps' action. Emtech contended that the commercial general liability policy issued to it by Transcontinental provided for such indemnification.

The specific issue before the court on appeal was whether the policy covered such expenses. The policy defined "personal injury" as injury, other than bodily injury, arising out of one or more of the following offenses: false arrest, detention or imprisonment; malicious prosecution; oral or written publication of material that slanders or libels a person or oral or written publication of material that violates a person's right of privacy.

The court, on appeal, pointed out that previous decisions have ruled that since retaliatory discharge was not specifically listed, it was not covered. Emtech argued that since it was not excluded, it was covered.

The court decided that since the insurance company had no duty to defend, it also had no duty to indemnify its insured. The judgment of the trial court in favor of Emtech was reversed.

Emtech Machining and Grinding, Inc. v. Transcontinental Insurance Company, Appellant--No. 2-97-0040--Appellate Court of Illinois, Second District--May 21, 1998--695 North Eastern Reporter 2d 545.