The Volunteer Protection Act of 1997 took more
than a decade to wind its way through the House and
Senate before it rested under the pen of President Bill
Clinton. But has the wait been beneficial for bar association
and foundation leaders anxious to bolster volunteerism by
sidetracking liability in a litigation-prone society?
The new federal law shields volunteers of
government entities and non-profit organizations from
liability if the volunteer commits negligent acts or
omissions while performing his or her responsibilities.
Non-profit leaders, including those from bar
associations and bar foundations, are now taking a hard
look at the Volunteer Protection Act as it becomes effective
in mid-September. Does it offer the necessary coverage to
help shield all volunteers from costly litigation? Or is it just
another Constitutional landmine, ready to blow up with a
court challenge?
"Of course, people can sue volunteers. The law
merely allows the defendants in the lawsuits to raise the act
as a defense to any such suit. Lawsuits like that would
likely be thrown out (of court) at the outset of the case,"
says George Constantine, associate director of government
affairs for the Americal Society of Association Executives
in Washington, D.C., a national organization representing
23,500 association executives and suppliers, which was a
primary force behind the legislation.
Approximately 138,000 associations in the United
States may be affected by the new act, according to a
statement by R. William Taylor of Washington, D.C.,
ASAE president at the time of the act's passage.
"Potential threats of legal liability have discouraged
many people from volunteering, even from serving on
boards and committees. Because associations rely heavily
on volunteers to carry out their missions and public service
activities, federal legislation providing uniform and
adequate protection is essential," Taylor says.
ASAE anchored much of its support for the new act
on a 1988 Gallup Organization study, "The Liability Crisis
and the Use of Volunteers by Nonprofit Associations,"
which found 1 in 10 non-profit organizations had
volunteers resign over concerns about liability, and 1 in 6
withheld their services because they feared exposure to a
liability lawsuit.
The risk of being sued has caused many non-profits
to make changes, according to the Gallup report. "About
one in 20 report changing the structure of their board of
directors, and as many eliminated committees due to the
potential exposure to liability risk. A larger proportion (14
percent) have eliminated programs they believed would
expose the organization to risk," the report states.
About 16 percent of the board members report they
have withheld their services to an organization out of fear
of liability. More common, 7 in 10 report volunteers are
more careful in what they do or say as board members, the
report adds.
Of 265 executives interviewed, the report reveals
that 1 in 4 organizations has been sued for some reason at
some point in time.
Support at the start
The Volunteer Protection Act was first introduced
in the legislature in 1987 and went through various
renditions until earlier this year. In April, the issue moved
to the front burner during the President's Summit for
America's Future, a forum in Philadelphia that spotlighted
the power of volunteers and their invaluable help in
assisting non-profits achieve goals to help society.
The Senate version, S543, passed 99-1. It was then
amended and approved 390-35 in the House in May. The
Senate then approved the amended House version by voice
vote in May. On June 18, President Clinton signed PL105-19 into law, effective 90 days later.
"The Volunteer Protection Act seemed to enjoy a
broad support each time it was introduced. For something
to be around that long, it could have been hard to continue
the momentum or the excitement behind it. So this victory
is more exciting," Constantine says about the new law.
According to an analysis of the act by the American
Bar Association, volunteers are protected from liability if
they:
act within the scope of their responsibility in the
organization at the time of the problem or omission;
are licensed, certified or authorized (if appropriate
or required) by the state in which the so-called harm
occurred, and
do not commit willful or criminal misconduct, gross
negligence, reckless misconduct or a conscious
flagrant indifference to the rights or safety of the
one harmed.
Limitations on liability will not apply to any
misconduct that:
constitutes a crime of violence and act of
international terrorism and conviction;
constitutes a hate crime;
involves a sexual offense and conviction;
violates federal or state civil rights laws;
involves intoxication from alcohol or drugs at the
time of the misconduct.
Definitions at question
The new law defines a volunteer as someone who
provides service for a non-profit and is not compensated,
other than being reimbused for expenses or anything of
value under $500 a year. The act defines non-profits as
501(c)(3)s under the 1986 Internal Revenue Service Code,
and any not-for-profit organization geared for public
benefit and operated for charitable, educational, religious,
welfare or health purposes.
This includes bar foundations and other foundations
nationwide which are trying to generate interest in
volunteerism at a time when funds are diminishing,
according to Patricia Lewis of Alexandria, Va., executive
director of the 16,000-member National Society of Fund
Raising Executives.
"Anything we can do to help volunteers feel more
protected, and can help without a concern for personal
jeopardy, is a terrific step forward," Lewis says about the
Volunteer Protection Act.
However, 501(c)(6)s, including trade and
professional associations such as bar associations, are not
specified in the act. The sponsors of the bill decided not to
change the statutory definition, but rather to include
language in the House Judiciary Committee Report stating
their intent to cover volunteers of 501(c)(6) organizations,
explains Jeffrey Altman of Washington, D.C., chair of
ASAE's legal section and a lawyer who specializes in tax-exempt organizations and business law.
"If challenged, the courts will hopefully look for
guidance to the committee report and give the statute its
intended meaning, rather than require a technical
amendment," he says.
Altman believes the most important feature of the
act is the immunity for volunteers when they act in good
faith within the scope of their volunteer duties.
"While a first good step, the major shortcoming of
the Act is that it does not provide any immunity for the
nonprofit organization itself. What's left is a hodgepodge
of state laws, some of which provide protection for the
organization subject to caps or insurance coverage, while
others provide no protection for the non-profit organization
at all," Altman adds.
While the act provides some forms of protection for
the individual volunteer when faced with a civil lawsuit,
another twist emerges. For example, a lawsuit may name
both the volunteer and the nonprofit since the nonprofit
carries the insurance. While the volunteer can claim
immunity under the Act, the nonprofit faces blame. The
Act preserves the right of the nonprofit to seek indemnity
from the volunteer, according to Jeffrey Livingston of San
Francisco, chair of the ABA Nonprofit Organizations
Committee of the Section of Tort and Insurance Practice.
"So where's the protection? If the lawsuit doesn't
come through the front door, it just might come through the
back door," Livingston says of his first impressions of the
new act.
More questions
The Nonprofit Risk Management Center in
Washington, D.C., has been flooded with calls since the act
was signed into law, according to Executive Director
Melanie Herman. "Some (non-profit executives) don't
think they need insurance anymore. They ask, Can we
drop our directors-and-officers coverage?' We tell them
No.'" Herman says.
Besides the misconception that nonprofits can drop
liability insurance while covered under the federal law,
Herman says that tort laws in each state may be challenged
regarding possible compensation to victims of a volunteer's
actions. The new act supersedes state laws and may force a
state to opt out in order to avoid the preemption of its tort
laws. Also, states can opt out of the federal law if state law
provides greater protection for volunteers.
"We hope this law doesn't dissuade non-profits
from focusing on safety and incorporating risk management
measures," Herman adds.
Challenges expected
In Illinois, the 1995 tort reform law (which includes
a section involving volunteers) has already been challenged
with the personal injury case, Best v. Allied Manufacturing,
and was found to be unconstitutional at the trial level.
In August, the voluntary Illinois State Bar
Association filed an amicus brief in the Illinois Supreme
Court challenging the constitutionality of the law in
providing relief to some litigants and not others. It also
opposed the elimination of joint and several liability (where
multiple defendants each share 100 percent of the liability)
--an issue that comes up in the Volunteer Protection Act.
The new federal law may eliminate joint and several
liability, according to bar president Todd Smith of Chicago.
"This is an unfortunate Act. It apparently provides
immunity from carelessness. If volunteers do something
careless, they can't be held responsible for their actions,"
Smith says about his first glance at the new law. He
believes volunteer protection should remain an issue lthat is
decided by the states.
The new law may have no impact on the Illinois
bar, which has about 1,500 volunteers in committees,
sections and pro bono initiatives, he adds.
Several other bar association and foundation
officials contacted for their impressions of the Volunteer
Protection Act were still reviewing it. At first glance, some
officials believe the act may have merit but question what it
actually covers.
The new law may have had an impact about five
years ago when the unified Idaho State Bar's all-volunteer
Professional Conduct Board (which includes 15 lawyers
and seven non-lawyers) was among those sued by two
lawyers. In one case, a lawyer received a private reprimand
and appealed several times before filing a lawsuit in the
U.S. District Court. A second case involved another lawyer
who was suspended and then disbarred, who also filed a
lawsuit in U.S. District Court. Both cases went through
several court rounds until they were dismissed in the 9th
Circuit U.S. Court of Appeals.
The bar, which is insured under the state, was
represented by another state agency, the Bureau of Risk
Management, which incurred about $130,000 in legal fees.
"Those of us who are in the profession eventually
get toughened, or just used to being sued. But volunteers
who are in our system may not be used to being sued. I
think there's a cost there, not that anyone quit because of it.
But it's an unnerving experience," says Idaho's bar
counsel, Michael Oaths of Boise.
The legal costs of such litigation remain a threat for
the bar's 300 volunteers, or any volunteers at associations,
says Executive Director Diane Minnich of Boise.
"Volunteers still could be sued, even if they're not
found at fault, or there are no grounds for a suit. It still
costs us," says Minnich.
Pro bono coverage?
Rosalie Small, executive director of the Bar
Association of The District of Columbia, believes the act
may have "a far-reaching effect" on lawyers involved in the
bar's pro bono initiative.
"Aren't most attorneys considered officers of the
court and, therefore, subj ect to discipline based on the
courts' powers? Apart from that, it would appear that a
simple negligence suit involving a lawyer offering his or
her time pro bono for a covered organization would
certainly enjoy the protection included in the Act, provided
his or her actions weren't willful," accoridng to
Constantine of ASAE.
Besides the varied coverage offered by each state
for volunteer protection, many non-profits, including bar
foundations, have indemnification clauses written into their
bylaws.
Mary Barden, executive director of the Oakland
(Mich.) Bar/Adams Pratt Foundation was looking into
various ways to protect the foundation's volunteer board of
directors from liability when Michigan passed a volunteer
protection law for non-director volunteers in 1994 and a
House bill extended additional volunteer protection in
1996.
While Braden is looking to bolster her foundation's
bylaws with indemnification clauses such as those found at
other bar foundations, including the Massachusetts Bar
Foundation and the Indiana Bar Foundation, she is
watching how Michigan will react in light of the new
federal law.
"We're just trying to stay up on all the legislation,"
Braden says.
Like other states, Florida has laws covering both
non-profit organizations and volunteers. In addition, The
Florida Bar Foundation indemnifies its volunteers and
carries insurance, according to Jane Curran of Orlando,
executive director of the foundation, who is still reviewing
the new act.
"If this new federal law will encourage more people
to serve as trustees and directors of charitable organization,
then it's a positive step," she says.
