A Nationwide Mutual Insurance Co. unit was not obligated to defend a former restaurant owner in litigation filed by former employees under an employment-related practice exclusion in his coverage, a federal appeals court said Wednesday, in affirming a lower court ruling.

Douglas Joseph Guillon, who was a shareholder, director and CEO of Crush Steakhouse and Bar in Ukiah, California, until its closure, purchased a business owner's liability insurance policy for Crush from Nationwide unit AMCO Insurance Co. in 2015, according to the ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Douglas Joseph Guillon v. AMCO Insurance Co.

After learning of a lawsuit filed against Crush by three former employees, Mr. Guillon contacted his insurance broker seeking coverage under his policy. AMCO denied the claim and Mr. Guillon retained counsel at his own expense. The underlying lawsuit culminated in a trial and a verdict of more than $430,000.

A year later, Mr. Guillon filed suit against AMCO in U.S. District Court in San Francisco, charging it had violated his policy. The court ruled in the insurer’s favor, and was affirmed by a three-judge appeals court panel.

The panel pointed to an employment-related practice exclusion provision in the policy that excluded coverage for allegations of “coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution.”

“The plain language of Crush’s AMCO policy does not provide coverage for the claims asserted the underlying lawsuit, because each of the plaintiffs in the underlying lawsuit’s (underlying plaintiffs) allegations of discrimination, harassment, and coercion, are excluded” by the exclusion’s “plain language,” the ruling said.

“Plaintiffs’ battery claims – the only underlying claims that Guillon now argues ‘potentially’ required AMCO to defend him under the policy – are excluded by the policy’s (employment-related practice exclusion provision) clause along with the other claims,” the decision said, in affirming the lower court’s ruling.

Attorneys in the case did not respond to requests for comment.