On June 18, 1997, President Clinton signed into law S.543, the "Volunteer Protection Act of 1997." The legislation, which took effect 90 days from the date of enactment, was the culmination of over ten years' effort to enact a federal law to provide some protection from liability for volunteers. The Act provides civil liability protection for non-profit or government volunteers if:
Pre-Emption and State Election of Nonapplicability
The federal Volunteer Protection Act pre-empts existing state laws except those (like New Jersey's) that provide broader volunteer protection than the federal law. However, the new law does allow states to enact their own legislation to make the federal law inapplicable in a particular state.
The federal statute allows states that have certain existing restrictions on volunteer immunity to retain those limitations without having to take the affirmative step to enact new legislation. These restrictions, which states may enact at a later date if they so choose, include:
Additionally, liability limitations would not apply to violations of various federal statutes including civil rights laws, crimes of violence, terrorism or hate crimes, nor to misconduct committed under the influence of alcohol or other intoxicating drugs.
Impact in New Jersey
What does the Volunteer Protection Act mean to New Jersey non-profits? Very little for the time being. New Jersey already has broad immunity laws protecting uncompensated trustees, officers and volunteers, as well as charitable organizations, under specific conditions. These statutes already exceed the breadth provided for in the new federal law. And, like the federal Act, New Jersey's immunity does not apply to acts of gross negligence, willful or wanton misconduct, or the negligent operation of a motor vehicle. Unless the State enacts new restrictive legislation (of which we have seen no inclination lately), this situation will not change. Whether the new law will affect rates for directors' and officers' or volunteer liability insurance remains to be seen.