Primarily, when your boss has sex with your wife or girlfriend, but can be used for anyone who you know who has sex with your wife or girlfriend.
Derived from Sen. John Ensign of Nevada, who was having sex with the wife of one of his friends, who also was a staff worker for Sen Ensign. When the friend found out, Ensign fired him.
My buddy "ensigned" me by having sex with my girlfriend the other night.
I just found out my boss has "ensigned" me for months now with my wife, and when I found out, the jerk fired me!