The uncompensated directors of a nonprofit organization didn’t engage in “willful misconduct or a knowing violation of the criminal law” and were immune from claims by former employees under the Virginia Nonstock Corporation Act, or VNCA, the Western District of Virginia held.
The defendants argued that Virginia’s nonstock corporation law, rather than New Jersey’s, should apply. Faced with conflicting laws, U.S. District Judge Norman K. Moon found that Virginia had a greater interest in the dispute.
“Unpaid directors of a Virginia nonprofit should not lose immunity conferred by Virginia law just because a suit is (at least initially) brought in another state,” he wrote. “The policy underlying the VNCA — and, for that matter, the New Jersey Charitable Immunity Act — is to protect the unpaid directors of in-state nonprofits. Those protections should not be permitted to be skirted so easily. Accordingly, the Court concludes that the VNCA should apply to the Defendant Directors in this case.”
The opinion is Lang v. Patients Out of Time Inc. (VLW 023-3-529).
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