Federal Law Protects Nonprofit Volunteers

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Volunteers for charities and other nonprofit entities have an additional line of defense against the threat of personal liability now that Congress has finally passed a federal Volunteer Protection Act.

Federal Law Protects Nonprofit Volunteers

By Don Kramer
Excerpted from Nonprofit Issues

Volunteers for charities and other nonprofit entities have an additional line of defense against the threat of personal liability now that Congress has finally passed a federal Volunteer Protection Act.

Acting in the euphoria for citizen service following the Presidents’ Volunteer Summit in Philadelphia in April, Congress passed with fanfare a bill that had been languishing in both House and Senate, in various forms, for a decade.

The new law (42 USCA Sec. 14501 et seq.) generally provides that volunteers will not be personally liable for their acts or omissions if they are acting within the scope of their responsibility for the organization and the harm is "not caused by willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the individual harmed."

A volunteer is a person who performs services for the organization without compensation, other than reasonable reimbursement or allowance for expenses actually incurred, or "any other thing of value in lieu of compensation, in excess of $500 per year." If this standard is met, a volunteer would include a person serving on the board of directors or a building committee, or a person teaching classes. If might even include individuals not normally thought of as volunteers, such as officers of the entity or apprentices providing services to the organization. The key in each case is whether the statutory definition of a volunteer is met. Volunteers for governmental entities are also protected.

A "nonprofit organization" is one classified as exempt from tax as a charity under Section 501(c)(3) of the Internal Revenue Code or "any not-for-profit organization which is organized and conducted for public benefit and operated primarily for charitable, civic, educational, religious, welfare, or health purposes." An organization does not qualify if it perpetrates hate crimes.

Although the law provides a benefit to volunteers, it will not in most cases reduce the recovery of a victim. Since the Act does not eliminate liability of the organization itself for the acts or omissions of its volunteer agents, and since most nonprofits maintain insurance to protect themselves and their volunteers, most cases will continue to be settled by insurance payments from the organization’s insurer.

How does the new Act work?
A volunteer is not personally liable for harm that he or she caused if the volunteer was (1) acting within the scope of his or her responsibilities, (2) was "properly licensed, certified, or authorized by the appropriate authorities" to act in such manner "if appropriate or required," (3) did not fall below the minimum standard of conduct described above, and (4) was not operating "a motor vehicle, vessel, aircraft or other vehicle" for which the state requires an operators license or insurance.

The protection does not apply to misconduct that constitutes a crime of violence or terrorism (for which the volunteer is criminally convicted) or a hate crime (whether or not convicted). In addition, there is no protection for sexual offenses (for which the volunteer is criminally convicted), for civil rights violations, or for acts that occurred when the volunteer was under the influence of "intoxicating alcohol" or drugs.

state law that it is "inconsistent" with it and does not provide at least equivalent protection for the volunteer, unless the state specifically passes a new law opting out of coverage. A state law which provides immunity for a volunteer would, however, provide additional protection and exceed the federal standard.

A state law will not be deemed inconsistent with the Act if it: (1) requires the nonprofit to adhere to risk management procedures, including mandatory training of volunteers; (2) makes the organization liable for the acts of volunteers to the same extent as it is liable for the acts of employees; (3) makes a limitation of liability inapplicable in an action brought by a state or local official; or (4) requires a "financially secure source of recovery," such as insurance or risk pool trust.

Finally, the Act does not preclude a nonprofit organization from bringing a suit against one of its own volunteers for damages to the nonprofit.

You Need to Know
The Volunteer Protection Act certainly does not mean that volunteers will be immune from suit. Plaintiffs’ lawyers representing injured persons will, whenever possible, continue to sue volunteers, by alleging gross negligence, flagrant indifference, or acts outside the scope of the volunteers’ responsibility.

Nonprofit entities will continue to be sued as well, however, since they are likely to have "deeper pockets" and will still be liable for acts of their volunteer agents, even if the volunteers are not personally liable. Where the nonprofit has insurance for the claim, which hopefully covers the volunteer as well as the organization, the outcome will probably not be much different under the Act.

If the nonprofit is without insurance, however, the volunteer may have a defense to personal liability not available to the organization.

Permission is granted for organizations to download and reprint this article. Reprints must provide full acknowledgment of source, as provided:

Reprinted from the December 1997 issue of Don Kramer’s Nonprofit Issues®. For more information about the publication call 1- 888-NP-Issue or visit the Website at http://www.nonprofitissues.com

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