[1] The scope of the right to indemnity that can be exercised against the employee, where the employer suffered losses due to the illegal acts committed by the employee

[2] In a case where an employee who causes damage to an employer by an illegal act related to the performance of his/her duties submits a letter of intent to fully repay the damage, whether the amount of compensation under the good faith principle should be reduced

[1] In general, in cases where an employer has suffered direct loss due to a tort committed by an employee in relation to the performance of his/her duties or has suffered loss as a result of an employer's liability for damages to a third party, the employer may claim damages against the employee or exercise the right to indemnity only to the extent deemed reasonable under the good faith principle in light of the nature and scale of his/her business, status of facilities, details of his/her duties, working conditions and attitude of his/her employee, causes and characteristics of the harmful act, the degree of employer's consideration as to the prevention of harmful act or the distribution

[2] Even if an employee has prepared and submitted a letter of commitment to compensate the entire amount of damages suffered by the employer due to a tort related to the performance of his/her duties, it is not possible for the employer to seek compensation for damages for the portion exceeding the reasonable limit under the good faith principle from the perspective of fairness.

[1] Articles 2 and 756(3) of the Civil Act / [2] Articles 2 and 756(3) of the Civil Act

[1] Supreme Court Decision 91Da7255 delivered on May 10, 1991 (Gong1991, 1612), Supreme Court Decision 92Da25595 delivered on September 25, 1992 (Gong1992, 302), Supreme Court Decision 94Da17246 delivered on December 13, 1994 (Gong195Sang, 476)

Het Korea Co., Ltd. (Attorneys Lee Jae-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and two others (Law Firm LLC, Attorneys Jin-young et al., Counsel for the defendant-appellant)

Seoul High Court Decision 95Na17580 delivered on October 27, 1995

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal (to the extent of supplement in case of a statement in the grounds of appeal submitted after expiration of the period) are examined.

In general, in cases where an employer has suffered direct loss due to a tort committed in relation to the performance of duties by an employee or has suffered loss as a result of an employer's liability for damages to a third party who is the victim, the employer shall be deemed to be able to claim damages against the employee or exercise the right of indemnity only to the extent deemed reasonable under the principle of good faith in light of the nature and scale of the business, status of the facility, details of the business, working conditions and attitude of the employee, causes and nature of the harmful act, the degree of consideration of the employer as to the prevention of harmful act or the distribution of loss, and other circumstances (see, e.g., Supreme Court Decisions 86Meu1045, Sept. 8, 1987; 91Da7255, May 10, 1991).

The lower court: (a) determined the sales policy of the Plaintiff’s ○○○○○○○○○ Company’s sales of tools; (b) held that the Plaintiff’s ○○○○○○○ Company’s sales of the said tools would not sell the Plaintiff’s products to the end-consumers; (c) provided that, if the Plaintiff’s sales of tools were approved in writing by the head of the ○○○○○○○ Office, the Plaintiff would be entitled to take disciplinary measures, including dismissal, against employees in charge of sales; and (d) the Plaintiff’s remuneration system was composed of basic wages of KRW 700,00 per month, and sales allowance corresponding to the Plaintiff’s sales performance. If the Plaintiff’s sales of tools were to have been carried out by the ○○○○○○○○○○ Company’s sales of tools by way of improper consultation with the lower court’s employees, the lower court’s determination that the Plaintiff’s sales of tools would have been carried out by the ○○○○○○ Company’s sales of tools, supra, was likely to prevent the Plaintiff’s sales of tools.

In addition, even if Defendant 1 prepared a letter to repay all of the damages suffered by the Plaintiff due to his disguised sale as above and submitted it to the Plaintiff, it is not possible for the Plaintiff, an employer, to seek compensation for damages in excess of the reasonable limit under the good faith principle, from the perspective of fairness. Thus, there is no error of law in the misapprehension of legal principles as discussed in the judgment below that held to the same effect. All of the arguments are without merit.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeong Jong-ho (Presiding Justice)