why is it so risky?
It’s common for individuals to take on board positions for non-profit organizations to serve their local communities. If you sit on a non-profit board and cause a wrongful act, it can result in a lawsuit against you.
“Wrongful act” is defined as any actual or, alleged, act or omission by directors and officers, individually or collectively. Lawsuits can come from organization members, employees, other officers or government officials.
A wrongful act could come from:
• Employment-related discrimination
• Slander or defamation
• Conflict of interest
• Fraudulent financial statements
• Mismanagement of funds
• Misleading statements
• Negligence
• Misuse of association funds
condominium association and homeowners association
Members of condominium association and homeowners association boards make tough decisions. As a result, they are often sued, both along with the association itself and separately. Homeowners’ association disputes may seem petty to outsiders, but they don’t feel very petty to the aggrieved party. Any dispute connected to one’s home quickly becomes fraught with emotion.
frequent causes of action against condo and HOA board members
• Violation of privacy
• Failure to pay HOA debts
• Unfair enforcement
• Unlawful discrimination in housing
• Sexual harassment against an association employee.
• Violation of governing documents
• Illegal or improper eviction
• Injuries on the property
contact us if you serve on any type of board
church board
There is a major concern for church boards, deacons or officers. For example, a church board was sued alleging misrepresentation of the financial status of the church. The case settled for $75,000 and the board incurred $86,000 in defense costs. Another example is a volunteer who filed a lawsuit for discrimination claiming she was denied a full time non-paid position because she was pregnant.
sports teams
Most of the claims filed against small, local sports and recreation groups are for 1) discrimination based on race or handicap under ADA 2) wrongful suspension or termination of coaches or participants 3) failure to follow their own rules and bylaws regarding player eligibility.