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Bar News - May 13, 2011

Do Perks for Non-profit Volunteers Imperil Their Immunity from Liability?


New Hampshire has long depended upon the volunteerism of its citizens to accomplish many good works. While New Hampshire has a volunteer immunity statute, there is uncertainty about whether a volunteer is exposed to liability in the course of his or her charitable activities if they accept certain non-cash perquisites provided by the nonprofit to attract, or reward in a minimal way, their participation. 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 of 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. A similar question is raised with respect to directors of nonprofit organizations under RSA 508:16, who are also to receive no compensation other than reimbursement for actual expenses. In practice, the conferring of marginal benefits is one of the ways nonprofit organizations attract or reward 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 or 508:16, nonprofits may have to rethink the provision of such benefits.

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 that 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.

What is compensation?

Nonprofits typically offer volunteer board members perks such as free memberships, tickets or admission to the organization’s events, meals, t-shirts, and other small gifts. Do such things constitute "compensation"? 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 or 508:16. 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 as part of an NHIS program where 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." While working at the speedway, under the auspices of this program, the plaintiff was injured, 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 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 Court 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).) There are cases from other jurisdictions that, by analogy, support the same proposition.

The difficulty is that the counter-argument, 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 Dictionary 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 NH 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, 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).) Since the legislature did not write an exception for 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 selected the language it did.

Thus, the arguments on either side of the issue are grounded in law and reason, and the ultimate resolution of this issue will certainly impact the spirit of volunteerism in this state.

Lyndsee D. Paskalis is an associate at Sheehan Phinney Bass + Green in Manchester. James Q. Shirley is a shareholder in the same firm. This is an updated and condensed version of an article originally published in the firm’s newsletter, Good Company.

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