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The 1997 Federal Volunteer Protection Act:
Limited Protection For Volunteers

Limitation of liability for noneconomic loss

Section 5 of the Act limits the liability of a volunteer for damages resulting from an act or omission by a volunteer who was acting within the scope of his or her volunteer responsibilities. Under the Act, a volunteer's liability for noneconomic loss shall be limited to the percentage of the volunteer's cause of the loss. In other words, there is no joint or several liability of volunteers for harm caused by other volunteers of the organization or entity. If there is a court case, the trier of fact would have to determine the percentage of responsibility of each volunteer for the claimant's loss.¹⁴

Changes from prior Wisconsin law

Currently, Wisconsin law grants limited liability to volunteers of nonstock corporations organized under Chapter 181.¹⁵ This limited liability also applies to officers and directors of nonstock corporations; however, the test for limitation of liability for officers and directors follows the limitations as set forth in Chapter 180, the Business Corporation Law, and is different than limited liability of volunteers.¹⁶ Volunteers of religious associations and corporations also are protected from liability under Chapter 187 of the Wisconsin Statutes.¹⁷There also are a variety of other Wisconsin statutes that provide some limited protection for volunteers.¹⁸

Wisconsin law has no similar provisions applicable to volunteers of unincorporated nonprofit associations. The Uniform Unincorporated Nonprofit Association Act (UUNA),¹⁹ limits the liability of a member or an officer of such an association for contract and tort damages based upon that individual's status as a member or officer of the association. The UUNA does not grant immunity to volunteers for their own actions. The Federal Volunteer Protection Act, however, specifically applies to unincorporated nonprofit organizations.²⁰

It should be noted that the volunteer provisions in both Chapters 181 and 187 of the Wisconsin Statutes state that protection from liability does not apply to a volunteer who is licensed, certified, permitted, or registered under state law where liability is based upon the volunteer's act or omission within the scope of practice under the volunteer's license, certificate, permit, or registration.²¹ The Act, however, contains no such exception, and provides protection from malpractice claims to a professional who volunteers his or her services to a nonprofit organization without compensation.²²

Insurance requirements

The Act does not protect the organization itself from liability for the acts of a volunteer. Thus, an organization will have to carry liability insurance to protect the organization's assets from claims based upon the negligent acts of its volunteers.

In addition, there is the problem of the use of automobiles not owned by the organization. If such an automobile is driven by a volunteer in the course of his or her volunteer activities on behalf of the organization, under Arsand the organization can be held liable for damages caused by the volunteer's negligent driving under the theory of respondeat superior.²³

Another very important factor nonprofit organizations need to consider is defense costs. The Act, while providing the volunteer an affirmative defense to a lawsuit, does not protect the organization against legal fees incurred in defending a lawsuit based upon a volunteer's negligence. In addition, the organization and its assets are not protected from such a lawsuit, so there still is a need for liability insurance.

Nonprofit organizations should contact their insurance carriers regarding the Federal Volunteer Protection Act and inquire whether the insurance company will use the Act as a basis to reduce their liability insurance premiums. In addition, as the Act may be an unknown factor for some insurance carriers, nonprofit organizations should comparison shop for their insurance because there may be a wide disparity in the treatment of the Act by insurance companies.

The Act only applies to acts occurring after Sept. 16, 1997. The Act has no retroactive effect. Most liability insurance policies are being written on a claims-made basis, meaning that the claim must be made during the term of the policy. Thus, volunteers still may be subject to liability for claims arising out of acts occurring before Sept. 16, 1997.

In addition, as in all areas of tort reform, there may be constitutional challenges to the Act.

Applying the Act in the real world

As of the writing of this article this author found no case law that applies the Act. There is only one Wisconsin case that deals with the Wisconsin Statute on Limitation of liability for volunteers.²⁴ The following examples have been created by the author who takes sole responsibility for them.

• A church organization sponsors a summer camp and a child is injured swimming; the volunteer counselor cannot be held liable for failure to properly supervise the child. But, the church organization itself might be sued for not providing a trained lifeguard.
  
  
• A volunteer nurse screens persons for high blood pressure for a nonprofit organization. She negligently misreads the high blood pressure. Under current Wisconsin law prior to Jan. 1, 1999, the nurse who is licensed could be held liable for negligence. However, under the Act the nurse would not be personally liable.²⁵
  
  
• A volunteer for the local Little League, while driving the players to a game, runs a stop sign and hits another car. The volunteer does not have immunity under either the Act or state law.²⁶
  
  
• A volunteer at a nonprofit fund raiser failed to check an ID and sells beer to a minor who, while he is intoxicated, is in an auto accident and injures the passenger in another car. There probably is no immunity because the sale was in violation of law and an argument can be made that this is willful misconduct. The organization itself also is liable for the sale of the intoxicant to the minor.

Conclusion

The Federal Volunteer Protection Act of 1997 takes great strides forward in protecting volunteers of nonprofit organizations and governmental entities from liability. In addition, the Act can be a risk management tool for nonprofit organizations to help limit liability and encourage volunteers to continue to work for such organizations. This is especially true for professional volunteers who now have a new layer of liability protection when they volunteer their professional services to a nonprofit organization. However, the Act does not absolve the nonprofit organization from carrying insurance or taking other proper risk management steps to ensure that the organization is performing services well and does not necessarily incur liability for unsupervised or other improper acts by its volunteers.

Thomas L. Frenn, Marquette 1976, is a shareholder at Petrie & Stocking S.C., Milwaukee. He concentrates his practice in small business law, real estate, nonprofit organizations, bankruptcy, estate planning, and probate. He is chair of the State Bar Business Law Section Nonprofit Organizations Committee, and the Business Law Section's secretary/treasurer.

Endnotes

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¹Volunteer Protection Act was signed on June 18, 1997, by President Clinton as PL 104-19. It is also at 42 U.S.C. 14051, 140454. References in this article will be individual sections of PL 104-19. Effective date of the Act was Sept. 16, 1997.

² Hate crimes are described in 28 U.S.C. 534(b)(1).

³ The actual definition of a public nonprofit organization operated primarily for charitable, civic, educational, religious, welfare, or health purposes can be very broad and is not further defined in the Act. See Federal Tax Coordinator, § D4100-4199 for examples of the types of organizations.

⁴See Wis. Stat. §§ 181.297, 187.44, 187.40-44, and 187.30-33. Because the federal law specifically preempts state law, it controls over state law. On April 13, 1998, the Wisconsin Legislature enacted 1997 Wis. Act 79 which revised Chapter 181 Nonstock Corporations effective Jan. 1, 1998. Unless specified otherwise, references are to the old Chapter 181.

⁵ See supra note 3.

⁶ Arsand v. City of Franklin, 83 Wis. 2d 40, 164 N.W.2d 579 (1978).

⁷ See Wis. Stat. §§ 187.35(3)(1) and 187.43(3)(1).

⁸ Act, § 4.

⁹ See, generally, Arsand v. City of Franklin, 83 Wis. 2d 40, 264 N.W.2d 579 (1978); Heims v. Heinke, 5 Wis. 2d 465, 468, 93 N.W.2d 455 (1958).

¹⁰ For an explanation of the expanded liability of a servant versus an agent, see Arsand cited above.

¹¹ Act, § 4(F).

¹² Act, § 3. This article does not provide a detailed analysis of how current Wisconsin law differs from the Act. However, one difference is that a volunteer may receive up to $500 of compensation per year under the federal Act but there is no such limit under Wisconsin law. Another difference is the detail of the exceptions to the volunteers immunity under Wisconsin statutes. Since there is no case law interpreting the Wisconsin statute, words such as "willful misconduct," a detailed comparison would be only this author's opinion. See, IGL-Wisconsin Awning Tent and Trailer Co. Inc. v. Greater Milwaukee Air and Water Show Inc., 185 Wis. 2d 864, 530 N.W.2d 279, 283 (Ct. App. 1994).

¹³ See Ghiardi, Kircher & Wiseman, Punitive Damages, Law and Practice (Callaghan, 1997). The Law of Damages in Wisconsin, ATS-CLE, State Bar of Wisconsin, Chapter 2.

¹⁴ See Act, §§ 6(1) and 6(2).

¹⁵ Wis. Stat. §§ 181.297, 180.0828. See also, new § 181.0855. The new nonstock corporation act does not change the liability of officers and directors of a nonstock corporation.

¹⁶ Wis. Stat. §§ 181.287, 181.297. See supra note 11.

¹⁷ Wis Stat. §§ 187.40-44; 187.30-33.

¹⁸ Wis. Stat. §§ 29.59 Removal of Wild Animals; 146.31(2) Blood or Tissue Transfer Services; 146.37 Health Care Service Review Civil Immunity; 895.44 Exemption from Civil Liability for Furnishing Safety Inspection or Advisory Services; 895.482 Civil Liability Exemption Ski Patrol Members; 895.51 Liability Exemption Food Donation Sale or Distribution; and 895.48 Civil Liability Emergency Care.

¹⁹ 1997 Wis. Act 140, Wis. Stat. Ch. 184.

²⁰ Act, § 6.4(b).

²¹ Wis. Stat. §§ 181.297, 187.40-44, and 187.30-33. See also¸1997 Wis. Act 79 effective Jan. 1, 1999. This act also provides protection for professional volunteers while the old law does not. See new Wis. Stat. § 181.0670.

²²Act, § 4.

²³ See, generally, Arsand v. City of Franklin, 83 Wis. 2d 40, 264 N.W.2d 579 (1978); Heims v. Heinke, 5 Wis. 2d 465, 468, 93 N.W.2d 455 (1958).

²⁴ See supra note 11.

²⁵ Under the new Chapter 181, effective Jan. 1, 1999, the nurse would not be personally liable if she or he was volunteering for a Wisconsin nonstock corporation. However, the result would be different if the nurse was volunteering for an unincorporated nonprofit association. Under the Act, volunteers of both types of organizations have immunity.

²⁶ See, Act 3(a)(4) and Wis. Stat. § 181.297.