The Massachusetts Supreme Judicial Court recently issued an important decision (Lynch v. Crawford) involving a  volunteer board member’s invocation of immunity from  liability for claims made under the Massachusetts Wage Act.

The basic facts of the case are not complex. In 2013 a nonprofit health center encountered distress and closed without paying wages immediately.  Employees brought a class action lawsuit against the volunteer board chair (who was also serving as acting CEO). The board chair sought to have the suit dismissed.  He pointed to both state law (MGL c. 231, sec 85W) and federal law (42 USC sec 14503) – both of which generally seek to protect volunteers in connection with their service to nonprofits.  Although the employees were eventually paid from the entity, they nevertheless continued their Wage Act complaint (seeking treble damages and attorneys’ fees).

The trial judge denied the director’s motion to dismiss.  The  Massachusetts Appeals Court also refused to dismiss.   Neither court was convinced the above statutes necessarily provided the volunteer director absolute immunity from a Wage Act claim.    The issue  before the SJC was twofold:  (i) procedurally – was the volunteer director entitled to bring an appeal of the denial of the motion to dismiss immediately or did he need to await a final judgement; and (ii) under what circumstances (if at all) does an unpaid volunteer board member have immunity from a Wage Act suit.

In its decision, the SJC considered the intersection of the Mass Wage Act and the various immunity statues for service to a nonprofit and held that the volunteer board member was entitled to bring an immediate appeal of the lower court’s denial of his motion for summary judgement.   That holding, of course, is welcome news to any volunteer board member as the SJC recognized the importance of allowing immediate review to a board member seeking  immunity from liability by statute.

The SJC did not stop its analysis there however.   Rather, it further held that on the particular facts of the case presented, genuine issues of material fact existed that justified the denial of the director’s summary judgement motion.    Specifically, the SJC pointed to language in the state immunity law excepting “any acts or omissions intentionally  designed to harm.”   When viewing the record in the light most favorable to the nonmoving party (the Wage Act plaintiffs), the SJC determined that a genuine issue of of fact existed on that issue making denial of summary judgement appropriate.

As a result of this decision, nonprofit board members should be especially mindful of engaging in managerial acts that could be construed later as intentionally inflicting harm.  In the Crawford opinion, the SJC pointed specifically to facts indicating that the board member directed certain vendor claims to be paid before employee claims.   Although the volunteer will have the opportunity to dispute this factual issue at trial, the mere existence of such a factual issue proved sufficient to put his entitlement to immunity in jeopardy.