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Overview of Common Non-Profit Legal Issues

Non-Profit Legal Overview from The Startup Garage

There are two categories of common legal problems this post will discuss: the problems that arise by virtue of being a business (contract, employment and personal injury issues) and the problems that are common to non-profits (fundraising, lobbying, profit-seeking).  Here we will explain the former as they are more simple, and will reserve individual blog posts for the latter.

Contract disputes

  • Most of your everyday transactions will be based on a contract, either written or oral.  Make sure you are meticulous with the details of a written contract before you sign it, and try to avoid oral agreements.  A paper trail of your past agreements with their terms enumerated will be invaluable in protecting your non-profit if an issue arises.

Employment claims

  • Employment lawsuits are one of the biggest category of lawsuits against non-profits.  It is important that you are well versed in the relevant employment laws that apply to non-profits.  You can begin your research at the Department of Labor’s web site.  Some of the categories of employment claims include:
    • Wrongful termination: At-will employees may not be fired for an illegal reason, and contract employees must be fired with “good cause”.
    • Sexual harassment: Employers can be responsible for failing to prevent or responding inadequately to an employee’s claim of sexual harassment.
    • Discrimination: When it comes to hiring, firing, pay, shift assignments, promotions or access to training, you are prohibited from using race, color, gender, national origin, religion, disability, citizenship status or age as a criterion. In California, the additional criteria of ancestry, mental disability, medical condition, marital status, or sexual orientation are also protected.
    • Retaliation: If an employee has filed an action against your non-profit or has assisted someone else in doing so, you are prohibited from punishing them by denying them something they were otherwise qualified for.
    • Wage and hour claims: The laws that govern the worker/employer relationship are complex and may necessitate consultation with an attorney.
    • Defamation: The main context for a defamation claim is over an ex-employee’s reference.  Avoid issues by requiring a prospective employer to place a request for a reference in writing.

Personal injury suits

  • Personal injury claims can include physical injuries, property damage, emotional distress or damage to a person’s reputation.  There are many risk management strategies that can be utilized to minimize the risk of personal injury, including purchasing a general liability policy.

*The information contained in this post is provided for informational purposes only, and should not be construed as legal advice on any subject matter.  You should not act or refrain from acting on the basis of any content included in this site without seeking legal or other professional advice. The contents of this post contain general information and may not reflect current legal developments or address your situation. We disclaim all liability for actions you take or fail to take based on any content on this site.

Whether you have a question about Common Non-Profit Legal Issues, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

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