Example of a State Law Protecting Nonprofit Board Members from Litigation

Florida State Law 617.0834

Officers and directors of certain corporations and associations not for profit; immunity from civil liability.

  1. An officer or director of a nonprofit organization recognized under s. 501(c)(3) or s. 501(c)(4) or s. 501(c)(6) of the Internal Revenue Code of 1986, as amended, or of an agricultural or a horticultural organization recognized under s. 501(c)(5), of the Internal Revenue Code of 1986, as amended, is not personally liable for monetary damages to any person for any statement, vote, decision, or failure to take an action, regarding organizational management or policy by an officer or director, unless:
    1. The officer or director breached or failed to perform his duties as an officer or director; and

    2. The officer's or director's breach of, or failure to perform, his duties constitutes:
      1. A violation of the criminal law, unless the officer or director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful. A judgment or other final adjudication against an officer or director in any criminal proceeding for violation of the criminal law estops that officer or director from contesting the fact that his breach, or failure to perform, constitutes a violation of the criminal law, but does not estop the officer or director from establishing that he had reasonable cause to believe that his conduct was lawful or had no reasonable cause to believe that his conduct was unlawful;

      2. A transaction from which the officer or director derived an improper personal benefit, either directly or indirectly; or

      3. Recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.
      1. For the purposes of this section, the term:
      1. "Recklessness" means the acting, or omission to act, in conscious disregard of a risk.
        • Known, or so obvious that it should have been known, to the officer or director; and

        • Known to the officer or director, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such action or omission.
      2. "Director" means a person who serves as a director, trustee, or member of the governing board of an organization.

      3. "Officer" means a person who serves as an officer without compensation except reimbursement for actual expenses incurred or to be incurred.


      History.

      s. 54, ch. 90-179

      Copyright 1996, Lawyers Cooperative Publishing