Mont. Code Ann. » TITLE 39. LABOR · CHAPTER 2. THE EMPLOYMENT RELATIONSHIP · Part 7. General Liability Arising From Employment Relationship
Montana Code Annotated

Mont. Code Ann. § 39-2-701 (2026)

Indemnification Of Employee

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  1. MCA Contents
  2. TITLE 39
  3. CHAPTER 2
  4. Part 7
  5. 39-2-701 Indemnification of employee

TITLE 39. LABOR

CHAPTER 2. THE EMPLOYMENT RELATIONSHIP

Part 7. General Liability Arising From Employment Relationship

Indemnification Of Employee

39-2-701. Indemnification of employee. (1) An employer shall indemnify an employee, except as prescribed in subsection (2), for all that the employee necessarily expends or loses in direct consequence of the discharge of duties as an employee or of the employee's obedience to the directions of the employer, even though unlawful, unless the employee at the time of obeying the directions believed them to be unlawful.

(2) An employer is not bound to indemnify an employee for losses suffered by the employee in consequence of the ordinary risks of the business in which the employee is employed.

(3) An employer shall in all cases indemnify an employee for losses caused by the employer's want of ordinary care.

History: (1)En. Sec. 2660, Civ. C. 1895; re-en. Sec. 5242, Rev. C. 1907; re-en. Sec. 7757, R.C.M. 1921; Cal. Civ. C. Sec. 1969; Field Civ. C. Sec. 1005; re-en. Sec. 7757, R.C.M. 1935; Sec. 41-102, R.C.M. 1947; (2)En. Sec. 2661, Civ. C. 1895; re-en. Sec. 5243, Rev. C. 1907; re-en. Sec. 7758, R.C.M. 1921; Cal. Civ. C. Sec. 1970; Based on Field Civ. C. Sec. 1006; re-en. Sec. 7758, R.C.M. 1935; Sec. 41-103, R.C.M. 1947; (3)En. Sec. 2662, Civ. C. 1895; re-en. Sec. 5244, Rev. C. 1907; re-en. Sec. 7759, R.C.M. 1921; Cal. Civ. C. Sec. 1971; Field Civ. C. Sec. 1007; re-en. Sec. 7759, R.C.M. 1935; Sec. 41-104, R.C.M. 1947; R.C.M. 1947, 41-102, 41-103, 41-104; amd. Sec. 1477, Ch. 56, L. 2009.

Notes of Decisions
Cited in 7 cases, 1981–2005 · leading case: Rothwell v. Allstate Ins., 1999 MT 50, 976 P.2d 512.
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Rothwell v. Allstate Ins., 1999 MT 50, 976 P.2d 512. · cites it 78× “¶ 15 Allstate also argues that we should look at the legislative history of § 39-2-701, MCA, and conclude that, under basic principles of agency, in the absence of a contract to the contrary, an employer is responsible for the necessary expenses of its employees.”
Campbell v. Mahoney, 2001 MT 146, 29 P.3d 1034. · cites it 6× “" ¶ 42 Allstate contended that Rothwell had waived her statutory right to indemnification because of provisions in Allstate's standardized employment agreement which provided that neighborhood office agents are responsible for a portion of their own office expenses.”
Collection Bureau Servs., Inc. v. Morrow, 2004 MT 84, 87 P.3d 1024. · cites it 4× “2d 512, ¶ 16 (employee indemnification statute, § 39-2-701(1), MCA, not subject to waiver) and State ex rel.”
Mohl v. Johnson, 911 P.2d 217 (Mont. 1996). · cites it 5× “” Although it did not say so, it appears that the court determined that, as Johnson’s employer, U-Haul had a duty to indemnify Johnson based on § 39-2-701, MCA. Section 39-2-701, MCA, provides: Indemnification of employee.”
Buck v. Billings Montana Chevrolet, Inc., 811 P.2d 537 (Mont. 1991). “The District Court of the Thirteenth Judicial District, Yellowstone County, held that the reasons asserted by defendants for Buck’s discharge constituted a legitimate business reason under the Wrongful Discharge from Employment Act, Sections 39-2-701 et seq., MCA. It therefore…”
Johnston v. K & T Mfg., Inc., 625 P.2d 66 (Mont. 1981). · cites it 3× “Such payment was an “indemnification of employee” referred to in section 39-2-701(1), MCA. There is no statutory penalty for the failure to indemnify an employee for expenditures covered by that section.”
Cole v. Valley Ice Garden, 2005 MT 21. · cites it 2× “2d 512 , we were called upon to determine whether the provisions of § 39-2-701(1), MCA, which required an employer to indemnify an employee for money she expended in the discharge of her duties of employment, could be waived by the provisions of an employer's standard written…”
Mont. Code Ann. § 39-2-701(1): 5 cases
Rothwell v. Allstate Ins., 1999 MT 50, 976 P.2d 512. “¶ 15 Allstate also argues that we should look at the legislative history of § 39-2-701, MCA, and conclude that, under basic principles of agency, in the absence of a contract to the contrary, an employer is responsible for the necessary expenses of its employees.”
Campbell v. Mahoney, 2001 MT 146, 29 P.3d 1034. “" ¶ 42 Allstate contended that Rothwell had waived her statutory right to indemnification because of provisions in Allstate's standardized employment agreement which provided that neighborhood office agents are responsible for a portion of their own office expenses.”
Collection Bureau Servs., Inc. v. Morrow, 2004 MT 84, 87 P.3d 1024. “2d 512, ¶ 16 (employee indemnification statute, § 39-2-701(1), MCA, not subject to waiver) and State ex rel.”
Johnston v. K & T Mfg., Inc., 625 P.2d 66 (Mont. 1981). “Such payment was an “indemnification of employee” referred to in section 39-2-701(1), MCA. There is no statutory penalty for the failure to indemnify an employee for expenditures covered by that section.”
Cole v. Valley Ice Garden, 2005 MT 21. “2d 512 , we were called upon to determine whether the provisions of § 39-2-701(1), MCA, which required an employer to indemnify an employee for money she expended in the discharge of her duties of employment, could be waived by the provisions of an employer's standard written…”
Mont. Code Ann. § 39-2-701(1)(1995): 1 case
Rothwell v. Allstate Ins., 1999 MT 50, 976 P.2d 512. “¶ 15 Allstate also argues that we should look at the legislative history of § 39-2-701, MCA, and conclude that, under basic principles of agency, in the absence of a contract to the contrary, an employer is responsible for the necessary expenses of its employees.”
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