Indiana University may have to pay for the legal expenses and penalties of a former student in a $2 billion dollar lawsuit, said a Monroe County judge.
Judge Kelsey Hanlon denied the university’s motion to dismiss counts that the student acted on its behalf when he allegedly violated a nondisclosure agreement during a business school project and enabled a competitor to steal plans for a proposed luxury resort in Puerto Rico.
Tim and Doris Anne Sadler of Indianapolis opened the case last year, initially against five students and their professor, but eventually added IU.
Former student T.R. Hollis argued that IU should indemnify him, meaning it would cover his legal expenses and penalties. Public organizations such as IU are required to indemnify employees acting on official business under Indiana law.
The university refused, arguing that student wasn’t an employee at the time or doing authorized work of the university.
But Hanlon said Hollis’s status as an employee was muddied when he signed a non-disclosure agreement with the Sadlers associated with his school project.
