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James Q. Shirley
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Alternative Dispute Resolution
Business Litigation

An Unresolved Issue Regarding Immunity for Nonprofit Volunteers

Wednesday, August 04, 2010

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New Hampshire has long depended upon the volunteerism of its constituents in accomplishing a great many worthwhile endeavors throughout the State. In this context, the question whether a volunteer has exposure to liability in the course of his or her charitable activities is a concern. The practice of providing non-cash perquisites to volunteers to attract, or reward in a minimal way, their participation raises a serious issue about the viability of the immunity they are provided by statute. New Hampshire law defines a "volunteer" under RSA 508:17, V(c) as:

[A]n individual performing services for a nonprofit organization or government entity who does not receive compensation, other than reimbursement for expenses actually incurred for such services.

The question whether volunteers lose their immunity under this statute arises when they receive, or are provided, any de minimis benefits other than direct reimbursement of expenses incurred. In practice, the conferring of marginal benefits is one of the mechanisms nonprofit organizations have for attracting or rewarding the service of board members and other volunteers. However, if the net result is to expose volunteers to liability outside the protection of 508:17, the provision of such benefits, for the organizations that do it, may have to be rethought.

In enacting 508:17, the New Hampshire legislature acknowledged that "this nation is built on volunteerism and litigation is making it impossible to be a volunteer. Those people who dedicate their own time, not for profit, but to be of service to their communities, should be encouraged" to continue in that vein. Without a volunteer immunity statute, the legislature found volunteers were "discouraged from serving." Volunteers feared they would "risk their personal assets in the event of a lawsuit against them or the organization that they serve." Thus, the legislature acknowledged that a law "to protect our volunteers [was] long overdue." Considering "their importance to our state, [volunteers] are entitled to [the] protection" afforded by this statute.This legislative history clarifies the purpose of 508:17 and underscores the importance of volunteerism in this state.[1]

There is a question whether the type of perquisites that nonprofits typically offer to volunteer board members, such as free memberships, tickets or admission to the organization's events, meals, t-shirts, and other small gifts, constitute "compensation". To resolve such an issue about the meaning of a statue, normally a court will ascribe the plain and ordinary meaning to terms that are not otherwise defined in a statute. State v. Laporte, 157 N.H. 229, 232 (2008). Although it is a longstanding principle that the interpretation of a statute presents a question of law, Babiarz v. Town of Grafton, 155 N.H. 757, 759 (2007), a court will not add language that the legislature did not see fit to include. Upton v. Town of Hopkinton, 157 N.H. 115, 117 (2008).

There is currently no New Hampshire case law interpreting the term compensation as the term is used in RSA 508:17. However, there is a case that deals with the interpretation of what constitutes compensation in another context. Appeal of Jenks, 158 N.H. 174 (2008), involved a workers' compensation claim by a plaintiff who was injured while volunteering at the New Hampshire International Speedway ("NHIS"). The activities took place pursuant to an NHIS program whereby volunteers from nonprofit or charitable organizations could perform services at NHIS during race weekend events, and in exchange, NHIS would donate to the organization $7.00 per volunteer for every hour "worked." The plaintiff was involved with a certain nonprofit organization that made arrangements with NHIS to participate in the fundraising program, and the plaintiff and his wife agreed to participate as volunteers. While volunteering, the plaintiff suffered an injury, and subsequently filed a workers' compensation claim against NHIS.

The issue on appeal was whether the plaintiff was an NHIS employee under the workers' compensation statute. The Court ultimately looked to the parties' intent to determine the question, and found that the parties did not intend that the charitable donation made by the racetrack in exchange for the plaintiff's volunteer services would constitute payment for such services.

In Jenks, in addition to the payment made to the organization for services provided, the plaintiff received a hat, shirt, and discounts at the concessions stands and gift shop. The Court affirmed the determination of the Compensation Appeals Board that under the circumstances, these items did not constitute payment for the plaintiff's services. The Court noted that the shirt and hat were required apparel for the security services the plaintiff was providing, and found "no evidence that the discounts on souvenirs and food were anything other than gratuities or gifts." The emphasized that "[m]ere gratuities or gifts, unless understood by the parties to constitute the equivalent of wages, are not considered payment under a contract of hire." Citing Appeal of Dube, 138 N.H. 155, 157 (1993). The same rule applies to "various discounts that may come with the claimant's position, but that are not primarily intended to be remuneration for specific services." Citing 3-65 Larson's Workers' Compensation Law § 65.03[1]; see also Doe by Doe v. Greenville Hosp. System, 448 S.E.2d 564, 567-68 (S.C. Ct. App. 1994) (unpaid hospital volunteer was not an "employee" for purposes of the workers' compensation act, although she received classroom and on-the-job training, a uniform and a free lunch).

Federal authority also supports the proposition that customary non-cash perquisites to volunteers should not be treated as compensation.The federal Volunteer Protection Act ("the VPA") defines a volunteer as:

[A]n individual performing services for a nonprofit organization or a governmental entity who does not receive (A) compensation (other than reasonable reimbursement or allowance for expenses actually incurred); or (B) any other thing of value in lieu of compensation, in excess of $500 per year.

42 U.S. C. 14505(6) (emphasis added); see also Gaudet v. Braca, 2001 WL 1617208 (Conn. Super. 2001) (discussing the VPA; overturned on other grounds).

In addition there are cases from other jurisdictions that, by analogy, also support the same proposition. At issue in a relevant Texas case was whether a volunteer firefighter was in the department's paid service because he was furnished equipment and training and because he received $2 to $3 for responding to calls and attending weekly department meetings and received a $25,000 life insurance policy paid by funds donated to the department. Ramirez v. County of Live Oak, 2005 WL 167308 (Tex. App. 2005). Finding that these items and amounts were not compensation, the court relied on Harris County v. Dillard, 883 S.W.2d 116, 167 (Tex. 1994) where the Texas Supreme Court held that an unpaid volunteer reserve deputy sheriff was not an "employee" under the Texas Tort Claims Act. The court focused on the fact that the volunteer fire department members were not paid a salary for their services, and additionally, it noted that under the Fair Labor Standards Act, "volunteers may be paid expenses, reasonable benefits, a nominal fee, or any combination thereof, for their services without losing their status as volunteers." Citing 29 C.F.R. 553.106 (emphasis added).

Finally in a recent Louisiana case, it was held that the volunteer tournament director of a sports association that sponsored a softball tournament was immune from liability for a participant's injury. See Bridges v. City of Carenco, 982 So.2d 306 (La.App. 2008). The court interpreted the Louisiana volunteer immunity statute to cover the tournament director even though he was not in one of the positions specifically listed in the statute, which included volunteer athletic coaches, managers or officials (language similar to RSA 508:17, V(c)). Interestingly, the Louisiana statute, La.R.S. 9:2798(C), which is otherwise similar to the New Hampshire volunteer immunity statute, provides that "[t]he receipt of a small stipend or incidental compensation for volunteer services shall not exclude any individual or person, who is otherwise covered, from the limitation of liability [under this statute]."

The argument on the other side of the proposition, that non-cash perquisites do constitute compensation, is certainly not frivolous. Although the statute does not define "compensation," the term is commonly understood to mean payment for services rendered. Webster's New World Dict. at 279 (1970). RSA 508:17, V(c) does not indicate that a minimum amount of compensation can be paid to the volunteer without jeopardizing that person's volunteer status. One can certainly argue that the plain language of the statute suggests that any remuneration paid by the non-profit, aside from reimbursement of out of pocket expenses, removes the volunteer from the protection offered by RSA 508:17 and that had the legislature intended to allow minimal compensation to volunteers, it would have said so.

Stated differently, the statute does not allow an exception for any compensation. There is case authority that to read such language into the statute would be clearly inappropriate. See Upton v. Town of Hopkinton, 157 N.H. 115, 117 (2008) (court cannot add language to a statute that was not included by the legislature). In addition, the New Hampshire Supreme Court has ruled that statutes "in derogation of the common law are to be interpreted strictly," and although a statute "may abolish a common law right, there is a presumption that the legislature has no such purpose." Estate of Gordon-Couture v. Brown, 152 N.H. 265, 266 (2005) (interpreting landowners' immunity under two recreational use statutes). Because it is stated in the body of the statute that the only payment a volunteer is allowed to receive is reimbursement for expenses, a court might well follow a rule of strict construction and determine that the provision of, or receipt of, any benefit other than the reimbursement of expenses constitutes impermissible compensation thus disqualifying the volunteer from the immunity protection of the statute.

Finally, reference to the legislative history of RSA 508:17 may not be persuasive to a court. When the statutory language is clear, the court will not look into the legislative history. Pennelli v. Town of Pelham, 148 N.H. 365, 368 (2002). Here, where the legislature did not write an exception for certain, or even de minimis compensation, into RSA 508:17, V(c), one could argue that a Court need not, and should not, go behind the words of the statute to analyze why the legislature made the choice to word the statute as it did.

As evidenced by the foregoing, the arguments on either side of the issue are grounded in law and reason, and the ultimate resolution of the issue will certainly impact the spirit of volunteerism in this State.

[1] The Federal Volunteer Protection Act is in accord. See 42 U.S.C. §14501(a) (1997)("The Congress finds and declares that (1) the willingness of volunteers to offer their services is deterred by the potential for liability actions against them; (2) as a result, many nonprofit public and private organizations … have been adversely affected by the withdrawal of volunteers from boards of directors and service in other capacities; (3) the contribution of these programs to their communities is thereby diminished, resulting in fewer and higher cost programs than would be obtainable if volunteers were participating; …(7) clarifying and limiting the liability risk assumed by volunteers is an appropriate subject for Federal legislation because (A) of the national scope of the problems created by the legitimate fears of volunteers about frivolous, arbitrary, or capricious lawsuits; (B) the citizens of the United States depend on … numerous social programs that depend on the services of volunteers; (C) it is in the interest of the Federal Government to encourage the continued operation of volunteer service organizations and contributions of volunteers because the Federal Government lacks the capacity to carry out all of the services provided by such organizations and volunteers …").

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.