Employer will not indemnify me cause I am retired

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sschullo
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Employer will not indemnify me cause I am retired

Post by sschullo » Tue Aug 07, 2018 8:38 pm

I serve on an advisory committee as a retired teacher and volunteer. This committee recommends to the CFO of our district with regards to the 457b plan. Our committee has mostly working employees and two retired members. We were told that the district will not indemnify retired members. The other member resigned immediately.

I am not quitting. My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions. The CFO has that power. My agent also said that no liability insurance exists that would cover somebody in my position because I have no power. She said it like this: if I make a restaurant recommendation to a friend and the friend gets food poisoning, the restaurant owner is liable not me.

Of course, anybody can be sued for anything and if my employer were sued and I was dragged into this, the judge would most likely dismiss me and the committee members. However, I would have to hire an attorney to make sure that happens, and that would be costly.

I am attempting to get this in writing and find out why. The legal counsel said he didn't remember why the district is not covering retirees but he will find out.

In the meantime, am I missing anything?
Thanks in advance,
Steve
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

JoeRetire
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Re: Employer will not indemnify me cause I am retired

Post by JoeRetire » Tue Aug 07, 2018 8:50 pm

sschullo wrote:
Tue Aug 07, 2018 8:38 pm
My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions.

In the meantime, am I missing anything?
Is your insurance agent qualified to make this sort of assessment?
If there is no chance of any liability, why are the working members indemnified?

If it were me, I'd run it past a lawyer first. Your insurance agent wouldn't be defending you in court if you were sued.

sschullo
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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Tue Aug 07, 2018 8:54 pm

JoeRetire wrote:
Tue Aug 07, 2018 8:50 pm
sschullo wrote:
Tue Aug 07, 2018 8:38 pm
My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions.

In the meantime, am I missing anything?
Is your insurance agent qualified to make this sort of assessment?
If there is no chance of any liability, why are the working members indemnified?

If it were me, I'd run it past a lawyer first. Your insurance agent wouldn't be defending you in court if you were sued.
All employees are covered. It is a school district.
Yes, you are right that my agent nor my umbrella insurance would defend me, but if I were convicted and had to pay liability, my agent said that the company would cover the fine.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

123
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Re: Employer will not indemnify me cause I am retired

Post by 123 » Tue Aug 07, 2018 8:58 pm

As a non-lawyer I would say you have no risk as a member of the committee because you don't decide anything. Your committee makes recommendations and your CFO makes a decision related to those recommendations. The CFO bears the risk of decision making.
The closest helping hand is at the end of your own arm.

TIAX
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Re: Employer will not indemnify me cause I am retired

Post by TIAX » Tue Aug 07, 2018 9:14 pm

sschullo wrote:
Tue Aug 07, 2018 8:38 pm
I am not quitting. My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions. The CFO has that power. My agent also said that no liability insurance exists that would cover somebody in my position because I have no power. She said it like this: if I make a restaurant recommendation to a friend and the friend gets food poisoning, the restaurant owner is liable not me.

Of course, anybody can be sued for anything and if my employer were sued and I was dragged into this, the judge would most likely dismiss me and the committee members. However, I would have to hire an attorney to make sure that happens, and that would be costly.

I am attempting to get this in writing and find out why. The legal counsel said he didn't remember why the district is not covering retirees but he will find out.

In the meantime, am I missing anything?
Thanks in advance,
Steve
First, judges generally don't just dismiss parties from cases on their own. You'll need to hire counsel to file a motion to dismiss and, assuming you're successful, the motion would cost $10-20k.

As for your restaurant example, that may be right. But how about this example: what if your doctor recommends you undergo a certain procedure and that recommendation was negligent. Even though you're making the decision, how do you think a lawsuit against the doctor would turn out? In this age of ERISA lawsuits, since you're not being compensated, it seems unwise to stay a member of the committee.

Silver Bullet
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Re: Employer will not indemnify me cause I am retired

Post by Silver Bullet » Tue Aug 07, 2018 9:21 pm

I would ask to see their E&O policy. Interesting case study reading here:

http://apps.americanbar.org/buslaw/comm ... 100100.pdf

sschullo
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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Tue Aug 07, 2018 9:25 pm

TIAX wrote:
Tue Aug 07, 2018 9:14 pm
sschullo wrote:
Tue Aug 07, 2018 8:38 pm
I am not quitting. My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions. The CFO has that power. My agent also said that no liability insurance exists that would cover somebody in my position because I have no power. She said it like this: if I make a restaurant recommendation to a friend and the friend gets food poisoning, the restaurant owner is liable not me.

Of course, anybody can be sued for anything and if my employer were sued and I was dragged into this, the judge would most likely dismiss me and the committee members. However, I would have to hire an attorney to make sure that happens, and that would be costly.

I am attempting to get this in writing and find out why. The legal counsel said he didn't remember why the district is not covering retirees but he will find out.

In the meantime, am I missing anything?
Thanks in advance,
Steve
First, judges generally don't just dismiss parties from cases on their own. You'll need to hire counsel to file a motion to dismiss and, assuming you're successful, the motion would cost $10-20k.

As for your restaurant example, that may be right. But how about this example: what if your doctor recommends you undergo a certain procedure and that recommendation was negligent. Even though you're making the decision, how do you think a lawsuit against the doctor would turn out? In this age of ERISA lawsuits, since you're not being compensated, it seems unwise to stay a member of the committee.
I get it that an attorney has to make a motion to dismiss on my behalf. Thanks for the cost quote.
Not sure the negligent factor in your example applies to my committee responsibility. The committee is all volunteer except for benefits personal, and the rep from the CFO. We follow the ERISA guidelines, a written DC plan and we have a paid professional financial consultant. Our recommendations are always about lower costs and requiring transparency, those are hardly negligent issues. We are aware of the 401k and the new 403b lawsuits. We got rid of revenue sharing years ago.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

Silver Bullet
Posts: 134
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Re: Employer will not indemnify me cause I am retired

Post by Silver Bullet » Tue Aug 07, 2018 9:31 pm

Some people don't like to click links. This is from the first 2 paragraphs of the link. It's not entirely applicable - but worth taking notice and discussing with a qualified attorney.

"When things go wrong in a company, security holders, creditors, and the corporation
itself may all seek out individuals to hold accountable for their losses. Anyone associated with
the management of the company becomes a potential target. Confronted with this risk, and the
additional obligations and potential criminal penalties that can be imposed under the SarbanesOxley
Act of 2002 (including individual fines of up to $5 million and prison terms of up to 20
years), many investors and other persons involved with both private and public companies, are
re-thinking their roles in corporate governance and seeking new ways to avoid personal
exposure.
One popular alternative that many individuals have chosen is to accept roles as observers
or advisors to boards, instead of accepting actual directorships as members of boards of directors.
Many board observers attend the full board meetings and participate in the board discussions.
Generally, the primary difference between these individuals and actual board members is that
they are non-voting. So this raises a question: What are your potential risks and liabilities as a
board observer? As a board observer myself, I found a dearth of information on my potential
risks. In answering this question, we reviewed both U.S. and Canadian statutes and case law
surrounding these issues. We did not consider cases surrounding outside experts that were
specifically hired to advise the board on certain topics, such as financial advisors retained to
provide a fairness opinion, and focused our research and discussion on the individuals who
attend board meetings and join in board discussions for general purposes.
"

47Percent
Posts: 349
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Re: Employer will not indemnify me cause I am retired

Post by 47Percent » Tue Aug 07, 2018 9:45 pm

sschullo wrote:
Tue Aug 07, 2018 8:38 pm
I serve on an advisory committee as a retired teacher and volunteer. This committee recommends to the CFO of our district with regards to the 457b plan. Our committee has mostly working employees and two retired members. We were told that the district will not indemnify retired members. The other member resigned immediately.

I am not quitting. My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions. The CFO has that power. My agent also said that no liability insurance exists that would cover somebody in my position because I have no power. She said it like this: if I make a restaurant recommendation to a friend and the friend gets food poisoning, the restaurant owner is liable not me.

Of course, anybody can be sued for anything and if my employer were sued and I was dragged into this, the judge would most likely dismiss me and the committee members. However, I would have to hire an attorney to make sure that happens, and that would be costly.

I am attempting to get this in writing and find out why. The legal counsel said he didn't remember why the district is not covering retirees but he will find out.

In the meantime, am I missing anything?
Thanks in advance,
Steve
Forget about what the Umbrella agent's opinion is about whether you are liable or not.
What really matters and what is really relevant is *if* you are sued will the umbrella policy cover you or not.

You should be able to find a policy that would -- because it is the *UMBRELLA* policy. It should not care if it is rain or the sun.

TIAX
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Re: Employer will not indemnify me cause I am retired

Post by TIAX » Tue Aug 07, 2018 9:45 pm

sschullo wrote:
Tue Aug 07, 2018 9:25 pm
I get it that an attorney has to make a motion to dismiss on my behalf. Thanks for the cost quote.
Not sure the negligent factor in your example applies to my committee responsibility. The committee is all volunteer except for benefits personal, and the rep from the CFO. We follow the ERISA guidelines, a written DC plan and we have a paid professional financial consultant. Our recommendations are always about lower costs and requiring transparency, those are hardly negligent issues. We are aware of the 401k and the new 403b lawsuits. We got rid of revenue sharing years ago.
The lawsuits were not only about revenue sharing. For example, plans have been sued for including as options active funds. See also this article ("for example, in Bell v. Anthem, Anthem offered a Vanguard fund charging 4 bps and was called out for not using its bargaining power to get a similar 2 bps investment."). I would either want to be indemnified or paid if I were you.

straws46
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Re: Employer will not indemnify me cause I am retired

Post by straws46 » Tue Aug 07, 2018 10:09 pm

Worked as counsel for a public company and we had several advisory boards. They were paid but had no actual authority and should not have been liable in any legal action. Nevertheless, they were covered by our indemnification bylaw and by D&O insurance. Even if the district won't indemnify you, you should ask them to explore the costs of getting advisory directors covered by their D&O policy, assuming they have one. The additional cost should be minimal since your liability is nil, and in the event you are named as an additional defendant in a case, they will already be providing a defense to the other defendants so the cost of defense for you would be minimal. Hope it works out for you.

spectec
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Re: Employer will not indemnify me cause I am retired

Post by spectec » Tue Aug 07, 2018 10:52 pm

I worked for a printing ink manufacturer many years ago. We were named in a lawsuit against a dozen ink manufacturing companies in which someone claimed they had developed cancer due to exposure to some chemicals in the printing ink. Apparently the guy just went through the warehouse and wrote down the name & addresses of all the ink on the shelves at that time.

Our insurance company notified us that because the lawsuit asked for both compensatory and punitive damages, they would only cover up to the maximum of the compensatory damages if we lost. If the plaintiff won any punitive damages, that would be our responsibility.

When we researched the details of the lawsuit, we discovered that the plaintiff had been diagnosed with cancer BEFORE our company had even begun business. We thought that was a slam dunk to get us dismissed from the lawsuit. Silly us. We notified our liability insurance company, and to our surprise they said they would only assign us a legal representative much later in the process. If we wanted to try and get dismissed, we had to undertake that ourselves with our own lawyer. About $15,000 - $20,000 later, using our own lawyer, we finally got our company dropped after a couple of appearances before a judge.

This many years later, some of the details escape me, and the actual costs are fuzzy. They don't include the emotional toll on my boss as he contemplated potential bankruptcy for months. My point is that even when you have insurance, the potential financial risks are unknowable once a lawsuit gets underway. Without insurance you're on your own, and even with insurance you might be on your own. It all depends on the fine print. Add to that the fact that the system feels it necessary to indemnify paid employees, which tells you there is some sort of risk, even if you can't quite figure it out or even if defies common sense.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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wjo
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Re: Employer will not indemnify me cause I am retired

Post by wjo » Tue Aug 07, 2018 11:27 pm

straws46 wrote:
Tue Aug 07, 2018 10:09 pm
Worked as counsel for a public company and we had several advisory boards. They were paid but had no actual authority and should not have been liable in any legal action. Nevertheless, they were covered by our indemnification bylaw and by D&O insurance. Even if the district won't indemnify you, you should ask them to explore the costs of getting advisory directors covered by their D&O policy, assuming they have one. The additional cost should be minimal since your liability is nil, and in the event you are named as an additional defendant in a case, they will already be providing a defense to the other defendants so the cost of defense for you would be minimal. Hope it works out for you.
This strikes me as excellent advice. There are many horror stories about lawsuits dragging everyone into them - I wouldn't risk it without D&O coverage. (Edit - here's a useful story (https://www.physicianonfire.com/hospital-board-sued/) that should give anyone pause.) I would resign immediately but give the advice above to the district and see what they can do. I've been on two volunteer boards and am just waiting for the time I will be party to a lawsuit in some way. Fortunately, the D&O policies should cover me. Without it, forget it.

JoeRetire
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Re: Employer will not indemnify me cause I am retired

Post by JoeRetire » Wed Aug 08, 2018 6:38 am

sschullo wrote:
Tue Aug 07, 2018 8:54 pm
Yes, you are right that my agent nor my umbrella insurance would defend me, but if I were convicted and had to pay liability, my agent said that the company would cover the fine.
Interesting that's what your agent said. But unless you can find specific words to that effect within your policy, it's just idle chit-chat. And if they would cover the fine (if any) but not the legal fees incurred, then you can decide how much it's worth.

This is not a risk I would take, and apparently the other non-employee members felt the same way.

Perhaps the risk is small, and perhaps it's a risk you feel is worth taking because you really want to be on this committee.

Jefferson
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Re: Employer will not indemnify me cause I am retired

Post by Jefferson » Wed Aug 08, 2018 6:47 am

Your insurance agent sells you the policy. He or she has zero say in what will actually happen in the event of a claim. And I’ve never seen a lawyer-agent, so let’s just assume they have zero credibility in giving legal advice.

Bottom line, you are incurring risk. And that may be okay for you. It’s up to you to decide whether it’s still worth it to you to do this. Just don’t trust anybody that says otherwise.

Jags4186
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Re: Employer will not indemnify me cause I am retired

Post by Jags4186 » Wed Aug 08, 2018 6:51 am

I’d quit and find a better committee to be part of.

Jack FFR1846
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Re: Employer will not indemnify me cause I am retired

Post by Jack FFR1846 » Wed Aug 08, 2018 6:55 am

I would immediately quit.

Lawyers pursuing a claim are going to name anyone and everyone who has any involvement in order to secure as much compensation as possible.

I volunteered as a high performance driving instructor for a dozen years. Despite every student signing an indemnification statement with respect to the track, owner, officials, employees, club members, and instructors.....and the club carrying a $1MM liability policy for all club members and volunteers, when I asked my insurance company if my umbrella policy would provide additional coverage for me, they immediately cancelled my policy. It took me 6 months to find a new umbrella policy that would cover me, knowing about my track activities.

Paying a lawyer to defend you in a baseless lawsuit still costs a lot of money.
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MikeG62
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Re: Employer will not indemnify me cause I am retired

Post by MikeG62 » Wed Aug 08, 2018 6:59 am

wjo wrote:
Tue Aug 07, 2018 11:27 pm
straws46 wrote:
Tue Aug 07, 2018 10:09 pm
Worked as counsel for a public company and we had several advisory boards. They were paid but had no actual authority and should not have been liable in any legal action. Nevertheless, they were covered by our indemnification bylaw and by D&O insurance. Even if the district won't indemnify you, you should ask them to explore the costs of getting advisory directors covered by their D&O policy, assuming they have one. The additional cost should be minimal since your liability is nil, and in the event you are named as an additional defendant in a case, they will already be providing a defense to the other defendants so the cost of defense for you would be minimal. Hope it works out for you.
This strikes me as excellent advice. There are many horror stories about lawsuits dragging everyone into them - I wouldn't risk it without D&O coverage. (Edit - here's a useful story (https://www.physicianonfire.com/hospital-board-sued/) that should give anyone pause.) I would resign immediately but give the advice above to the district and see what they can do. I've been on two volunteer boards and am just waiting for the time I will be party to a lawsuit in some way. Fortunately, the D&O policies should cover me. Without it, forget it.
+1.

I’d resign if they did not provide insurance (and a lot of it) that covered me.

Why would you take ANY risk for a volunteer position. Personally I would not take any position which exposes me to any risk of being sued. I am retired, why would I want this potential exposure/headache.
Real Knowledge Comes Only From Experience

Rupert
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Re: Employer will not indemnify me cause I am retired

Post by Rupert » Wed Aug 08, 2018 7:18 am

First, you say your committee "follows ERISA guidelines," but are you really an ERISA plan? Many school plans aren't. Second, most D&O policies don't cover ERISA liability. Many employers don't bother to read the fine print and think they are covered for retirement plan decision making, but they aren't. And there's personal liability under ERISA. Typically firms have to purchase a separate ERISA policy or an ERISA rider for their D&O policy to be covered. It seems like your school district self-insures, OP, but I mention this for the benefit of others following this thread.

dkarst
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Re: Employer will not indemnify me cause I am retired

Post by dkarst » Wed Aug 08, 2018 7:35 am

I (unfortunately) have personal experience in this area as a member of a committee but was an active employee. It is fairly easy to find a group of folks "wronged" (ie. company stock in plan, forced out of company stock in plan, exp ratios too high, lack of index funds in a specific area etc.). Then these folks engage a lawyer or two.

Believe me when I tell you they find everyone's name and their dogs to make up a list of potential litigants involved in this "wronging" and it is your mission to escape. I won't get into details here but the case I was involved in had legal bills I would estimate at 20X - 50X the average wealth of those on this board.

Tell them you need coverage.

sschullo
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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 10:04 am

Silver Bullet wrote:
Tue Aug 07, 2018 9:31 pm
Some people don't like to click links. This is from the first 2 paragraphs of the link. It's not entirely applicable - but worth taking notice and discussing with a qualified attorney.

"When things go wrong in a company, security holders, creditors, and the corporation
itself may all seek out individuals to hold accountable for their losses. Anyone associated with
the management of the company becomes a potential target. Confronted with this risk, and the
additional obligations and potential criminal penalties that can be imposed under the SarbanesOxley
Act of 2002 (including individual fines of up to $5 million and prison terms of up to 20
years), many investors and other persons involved with both private and public companies, are
re-thinking their roles in corporate governance and seeking new ways to avoid personal
exposure.
One popular alternative that many individuals have chosen is to accept roles as observers
or advisors to boards, instead of accepting actual directorships as members of boards of directors.
Many board observers attend the full board meetings and participate in the board discussions.
Generally, the primary difference between these individuals and actual board members is that
they are non-voting. So this raises a question: What are your potential risks and liabilities as a
board observer? As a board observer myself, I found a dearth of information on my potential
risks. In answering this question, we reviewed both U.S. and Canadian statutes and case law
surrounding these issues. We did not consider cases surrounding outside experts that were
specifically hired to advise the board on certain topics, such as financial advisors retained to
provide a fairness opinion, and focused our research and discussion on the individuals who
attend board meetings and join in board discussions for general purposes.
"
Interesting. You are suggesting that I could resign but still be an observer. Too me, that is a lot of time because as a member of the public, I could not speak until the end of the meeting during that allows the public to speak. We could change the investment policy statement to include nonvoting members. Just to be clear again, our votes only make recommendations to the CFO. We never make the final decision, we have no power.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

sschullo
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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 10:07 am

47Percent wrote:
Tue Aug 07, 2018 9:45 pm
sschullo wrote:
Tue Aug 07, 2018 8:38 pm
I serve on an advisory committee as a retired teacher and volunteer. This committee recommends to the CFO of our district with regards to the 457b plan. Our committee has mostly working employees and two retired members. We were told that the district will not indemnify retired members. The other member resigned immediately.

I am not quitting. My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions. The CFO has that power. My agent also said that no liability insurance exists that would cover somebody in my position because I have no power. She said it like this: if I make a restaurant recommendation to a friend and the friend gets food poisoning, the restaurant owner is liable not me.

Of course, anybody can be sued for anything and if my employer were sued and I was dragged into this, the judge would most likely dismiss me and the committee members. However, I would have to hire an attorney to make sure that happens, and that would be costly.

I am attempting to get this in writing and find out why. The legal counsel said he didn't remember why the district is not covering retirees but he will find out.

In the meantime, am I missing anything?
Thanks in advance,
Steve
Forget about what the Umbrella agent's opinion is about whether you are liable or not.
What really matters and what is really relevant is *if* you are sued will the umbrella policy cover you or not.

You should be able to find a policy that would -- because it is the *UMBRELLA* policy. It should not care if it is rain or the sun.
The company says no they will not cover me. Umbrella is for home and auto, but the agent says that all companies say that and at the final analysis if I were convicted and with a fine that the umbrella will cover my fine. But I would need an attorney. Others have said that I am only taking the chit-chat of my agent. I get it.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

sschullo
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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 10:10 am

straws46 wrote:
Tue Aug 07, 2018 10:09 pm
Worked as counsel for a public company and we had several advisory boards. They were paid but had no actual authority and should not have been liable in any legal action. Nevertheless, they were covered by our indemnification bylaw and by D&O insurance. Even if the district won't indemnify you, you should ask them to explore the costs of getting advisory directors covered by their D&O policy, assuming they have one. The additional cost should be minimal since your liability is nil, and in the event you are named as an additional defendant in a case, they will already be providing a defense to the other defendants so the cost of defense for you would be minimal. Hope it works out for you.
Thank you.
I will ask about D&O insurance.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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HueyLD
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Re: Employer will not indemnify me cause I am retired

Post by HueyLD » Wed Aug 08, 2018 10:16 am

Steve,

I admire your dedication to lower the cost for teachers retirement programs. And I have read your book and loved it.

However, please do not expose yourself to unnecessary liability unless you are dead broke and thus judgment proof.

Good luck and best wishes.

beardsworth
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Re: Employer will not indemnify me cause I am retired

Post by beardsworth » Wed Aug 08, 2018 10:26 am

Steve,

Liability issues aside, if an organization to whom I was giving unpaid volunteer work made clear that they wouldn't lift a finger to protect me, I would quit helping them and would find another outlet for my hands-on altruism.

I'm assuming that promoting good employee plans at your previous school system must be very important to you on a personal level, i.e., important enough to put up with this kind of hassle in order to spend time on a committee which is purely advisory and (in your own words) has "no power"? Your previous posts here don't actually say why you're so motivated to keep doing it, despite the way they're treating you.

But best wishes in whatever you decide.

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Prokofiev
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Re: Employer will not indemnify me cause I am retired

Post by Prokofiev » Wed Aug 08, 2018 10:48 am

My first question would be "Why are you doing this?"

You are retired and I would look to move-on and do what I truly enjoy in life.

Now if this IS what you truly enjoy and need to keep connected to old friends and co-workers, find happiness and direction in
being involved, or just love the donuts, I would continue.

Life is short and risks are everywhere. The odds of being sued are very small - 1 in 100 or 1 in 1000?
The odds of a frivolous lawsuit going forward is smaller still. Could you end up with a lawyer fee of $5k or 10k?
Sure. And if that would affect your standard of living, well maybe reconsider.

But I would ask myself how important is this volunteer committee and what do I get from it. I have been involved in many volunteer activities, mentoring, boards, clubs, tutoring, teaching . . . and I usually find it frustrating. I start thinking I can make some positive difference, but usually end up disillusioned.

The slight possibility of a lawsuit would not deter me, if I was finding purpose and enjoyment from the activity.
Everything should be made as simple as possible, but not simpler - Einstein

rantk81
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Re: Employer will not indemnify me cause I am retired

Post by rantk81 » Wed Aug 08, 2018 10:51 am

Nothing to add directly to the OP, but I will chime in:

I recently resigned from my condo HOA board due to the thought that perhaps someone may want to sue me one day due to my actions or in-actions while being a member of the board. I investigated getting an umbrella liability policy. However, when my agent sent me over the copy of the policy, the list of "exclusions" was like 5 or 6 pages long, and one of the specific exclusions was that it would not protect me while I was serving in some kind of board member capacity, regardless of whether it was a paid position or not. In fact, after reading all of the exclusions, I was hard pressed to envision *any* scenario where the policy would protect me from a lawsuit. I told my agent I would not be signing up for that policy.

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Re: Employer will not indemnify me cause I am retired

Post by TIAX » Wed Aug 08, 2018 11:46 am

Prokofiev wrote:
Wed Aug 08, 2018 10:48 am
Life is short and risks are everywhere. The odds of being sued are very small - 1 in 100 or 1 in 1000?
The odds of a frivolous lawsuit going forward is smaller still. Could you end up with a lawyer fee of $5k or 10k?
Sure. And if that would affect your standard of living, well maybe reconsider.
The 5k or 10k number isn't close to correct even for lawsuits you might consider frivolous. For federal litigation, an attorney would ask for no less than a 10k retainer and that retainer would need to be replenished relatively quickly.
Last edited by TIAX on Wed Aug 08, 2018 3:42 pm, edited 2 times in total.

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 11:55 am

beardsworth wrote:
Wed Aug 08, 2018 10:26 am
Steve,
I'm assuming that promoting good employee plans at your previous school system must be very important to you on a personal level, i.e., important enough to put up with this kind of hassle in order to spend time on a committee which is purely advisory and (in your own words) has "no power"? Your previous posts here don't actually say why you're so motivated to keep doing it, despite the way they're treating you.

But best wishes in whatever you decide.
Hi beardsworth,
Here is a picture of my motivation, and the motivation of all of our volunteers! After 12 years our committee has produced an Award Winning plan. This table says it all:

Image

My colleagues on this committee are beyond reproach! We are one of the most knowledgeable, all volunteer, advisory committees in the country. My forever free PDF book Fighting Powerful Interests tells a 20-year story of how a bunch of us nobody's implemented the first and only Award Winning plan in the history of defined contribution plans from the 2nd largest public PreK-12 school district in the country. We were all initially ripped off by annuity 403(b) sales people and we wanted to try and make a change so others would not be ripped off.
Last edited by sschullo on Wed Aug 08, 2018 12:18 pm, edited 2 times in total.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 11:58 am

Prokofiev wrote:
Wed Aug 08, 2018 10:48 am
My first question would be "Why are you doing this?"
Refer to my answer to Beardsworth and the table post.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by straws46 » Wed Aug 08, 2018 12:09 pm

sschullo wrote:
Wed Aug 08, 2018 10:10 am
straws46 wrote:
Tue Aug 07, 2018 10:09 pm
Worked as counsel for a public company and we had several advisory boards. They were paid but had no actual authority and should not have been liable in any legal action. Nevertheless, they were covered by our indemnification bylaw and by D&O insurance. Even if the district won't indemnify you, you should ask them to explore the costs of getting advisory directors covered by their D&O policy, assuming they have one. The additional cost should be minimal since your liability is nil, and in the event you are named as an additional defendant in a case, they will already be providing a defense to the other defendants so the cost of defense for you would be minimal. Hope it works out for you.
Thank you.
I will ask about D&O insurance.
You would need to make sure they have Side A coverage. Side B and C cover the entity rather than the individual.

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 12:10 pm

Prokofiev wrote:
Wed Aug 08, 2018 10:48 am
My first question would be "Why are you doing this?"

You are retired and I would look to move-on and do what I truly enjoy in life.

Now if this IS what you truly enjoy and need to keep connected to old friends and co-workers, find happiness and direction in
being involved, or just love the donuts, I would continue.

Life is short and risks are everywhere. The odds of being sued are very small - 1 in 100 or 1 in 1000?
The odds of a frivolous lawsuit going forward is smaller still. Could you end up with a lawyer fee of $5k or 10k?
Sure. And if that would affect your standard of living, well maybe reconsider.

But I would ask myself how important is this volunteer committee and what do I get from it. I have been involved in many volunteer activities, mentoring, boards, clubs, tutoring, teaching . . . and I usually find it frustrating. I start thinking I can make some positive difference, but usually end up disillusioned.

The slight possibility of a lawsuit would not deter me, if I was finding purpose and enjoyment from the activity.
This 12-year adventure was about 75% frustrating and disillusioned. But I find it fascinating working with a large district that considers our involvement absolutely worthless. It's fascinating. As I have posted here, again and again, public school 403(b) plans are the worst plans ever created! And these terrible plans are still being sold every day! This 457(b) plan is a way to get around the monopoly of annuity 403b plans.
We started with ZERO assets in 2006 and now have about $150 million with over 4000 LAUSD employees enrolled.
We just implemented auto enroll with one of the eight unions, and other unions are weighing in and we think that will be a game changer to get public educators out of the 403b forever.

I cannot underestimate how terrible the 403b is with the 4,000,000 educators across the country. Our legendary boglehead, Bill Berstein said (or he quoted a reporter): that teachers "find themselves in one of the dankest, foulest smelling cellars of the financial world--403(b) plans." Don't we all love Bill!!!!

This is what I do in retirement. I love it! I wrote two books and I give both of them away. I have NO ads on my blog as I have plenty of money.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 12:12 pm

straws46 wrote:
Wed Aug 08, 2018 12:09 pm
sschullo wrote:
Wed Aug 08, 2018 10:10 am
straws46 wrote:
Tue Aug 07, 2018 10:09 pm
Worked as counsel for a public company and we had several advisory boards. They were paid but had no actual authority and should not have been liable in any legal action. Nevertheless, they were covered by our indemnification bylaw and by D&O insurance. Even if the district won't indemnify you, you should ask them to explore the costs of getting advisory directors covered by their D&O policy, assuming they have one. The additional cost should be minimal since your liability is nil, and in the event you are named as an additional defendant in a case, they will already be providing a defense to the other defendants so the cost of defense for you would be minimal. Hope it works out for you.
Thank you.
I will ask about D&O insurance.
You would need to make sure they have Side A coverage. Side B and C cover the entity rather than the individual.
Thank you.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by Prokofiev » Wed Aug 08, 2018 2:31 pm

"This is what I do in retirement. I love it! I wrote two books and I give both of them away. I have NO ads on my blog as I have plenty of money"

In that case, you have answered your own question! This is what you love, you have plenty of money and you are not trying to profit or set-up a consulting business. Why worry about something that is your passion? The odds are slim you will have ever have to face a lawsuit for your volunteer work.
Everything should be made as simple as possible, but not simpler - Einstein

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Re: Employer will not indemnify me cause I am retired

Post by spectec » Wed Aug 08, 2018 2:55 pm

Since the decision not to indemnify the retired members only affected you and one other person, has it occurred to you that the decision was made specifically with the intent to nudge you both out? Especially it already had that effect on one of you. I'm not suggesting what their motive might be, but it sure has the look and feel of having some sort of intended purpose.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 3:07 pm

spectec wrote:
Wed Aug 08, 2018 2:55 pm
Since the decision not to indemnify the retired members only affected you and one other person, has it occurred to you that the decision was made specifically with the intent to nudge you both out? Especially it already had that effect on one of you. I'm not suggesting what their motive might be, but it sure has the look and feel of having some sort of intended purpose.
Who knows what their motivation is. We are dealing with a world that is so totally cut off from real life and real people, public k12 bureaucrats. It is fascinating. I had an older brother who was diagnosed as a paranoid schizophrenic, and there is a lot of behavioral overlap. :happy
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by TIAX » Wed Aug 08, 2018 3:45 pm

sschullo wrote:
Wed Aug 08, 2018 11:55 am
Image

My colleagues on this committee are beyond reproach! We are one of the most knowledgeable, all volunteer, advisory committees in the country. My forever free PDF book Fighting Powerful Interests tells a 20-year story of how a bunch of us nobody's implemented the first and only Award Winning plan in the history of defined contribution plans from the 2nd largest public PreK-12 school district in the country. We were all initially ripped off by annuity 403(b) sales people and we wanted to try and make a change so others would not be ripped off.
Voya is a somewhat expensive TPA. Did you consider other alternatives?

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Re: Employer will not indemnify me cause I am retired

Post by Good Listener » Wed Aug 08, 2018 5:12 pm

I'd think about it this way. The employees are covered. Why? You are not getting paid nor getting covered. Why not? So why would you risk anything?

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 5:40 pm

TIAX wrote:
Wed Aug 08, 2018 3:45 pm
sschullo wrote:
Wed Aug 08, 2018 11:55 am
Image

My colleagues on this committee are beyond reproach! We are one of the most knowledgeable, all volunteer, advisory committees in the country. My forever free PDF book Fighting Powerful Interests tells a 20-year story of how a bunch of us nobody's implemented the first and only Award Winning plan in the history of defined contribution plans from the 2nd largest public PreK-12 school district in the country. We were all initially ripped off by annuity 403(b) sales people and we wanted to try and make a change so others would not be ripped off.
Voya is a somewhat expensive TPA. Did you consider other alternatives?
This plan is, of course, more expensive than my portfolio because I am retired. Tax-deferred retirement plans have expenses with record keeping and other types of paperwork. Plus, 12 options are .40% or less total cost, including the TPA cost.
I shudder to think what the average plan costs are that also have a committee that doesn't know crap (or doesn't have a committee).
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Wed Aug 08, 2018 5:52 pm

Good Listener wrote:
Wed Aug 08, 2018 5:12 pm
I'd think about it this way. The employees are covered. Why? You are not getting paid nor getting covered. Why not? So why would you risk anything?
I think the risk is very low. The plaintiffs have to prove beyond a reasonable doubt that I harmed or been negligent when:
A. I am a volunteer, and a nonprofessional retiree (the committee has a paid financial consultant that provides quarterly reports of the plan).
B. I only have one vote out of 8 members
C. The committee has no power, and (how can I be negligent with no power?)
C. All we discuss reducing costs, including more broadly diversified index funds and demand transparency. (Again, how can I be found negligent?)
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by TIAX » Wed Aug 08, 2018 7:04 pm

sschullo wrote:
Wed Aug 08, 2018 5:52 pm
Good Listener wrote:
Wed Aug 08, 2018 5:12 pm
I'd think about it this way. The employees are covered. Why? You are not getting paid nor getting covered. Why not? So why would you risk anything?
I think the risk is very low. The plaintiffs have to prove beyond a reasonable doubt that I harmed or been negligent when:
A. I am a volunteer, and a nonprofessional retiree (the committee has a paid financial consultant that provides quarterly reports of the plan).
B. I only have one vote out of 8 members
C. The committee has no power, and (how can I be negligent with no power?)
C. All we discuss reducing costs, including more broadly diversified index funds and demand transparency. (Again, how can I be found negligent?)
That's incorrect. In a civil case, the plaintiffs would only have to prove by preponderance of the evidence (i.e., more likely than not) that you are liable. Beyond a reasonable doubt is the criminal law standard of proof. You keep mentioning factors that you think should affect the outcome of the case. Maybe they will and maybe they won't. I would speak with counsel knowledgeable in this field and find out.

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Re: Employer will not indemnify me cause I am retired

Post by larsm » Wed Aug 08, 2018 7:09 pm

Just because you may have no liability as a volunteer does not stop someone from including you in a lawsuit. And while you may not have to be concerned with damages it still opens you up to potential legal bills, which D&O insurance would normally cover.

Me, I'd head for the hills...

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Re: Employer will not indemnify me cause I am retired

Post by Jags4186 » Wed Aug 08, 2018 7:19 pm

You could always apply for a job... :shock:

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Re: Employer will not indemnify me cause I am retired

Post by gostars » Thu Aug 09, 2018 12:40 am

How does the district handle insurance issues for other volunteers who are involved with district/school events? They can't just be letting random people help out with zero coverage, can they?

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Re: Employer will not indemnify me cause I am retired

Post by HIinvestor » Thu Aug 09, 2018 1:36 am

I agree that all board members should have access to the D&O policy and read it, as well as their umbrella policy. If you don’t feel there is coverage, I’d resign.

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Re: Employer will not indemnify me cause I am retired

Post by spectec » Thu Aug 09, 2018 5:12 am

sschullo wrote:
Wed Aug 08, 2018 5:52 pm
Good Listener wrote:
Wed Aug 08, 2018 5:12 pm
I'd think about it this way. The employees are covered. Why? You are not getting paid nor getting covered. Why not? So why would you risk anything?
I think the risk is very low. The plaintiffs have to prove beyond a reasonable doubt that I harmed or been negligent when:
A. I am a volunteer, and a nonprofessional retiree (the committee has a paid financial consultant that provides quarterly reports of the plan).
B. I only have one vote out of 8 members
C. The committee has no power, and (how can I be negligent with no power?)
C. All we discuss reducing costs, including more broadly diversified index funds and demand transparency. (Again, how can I be found negligent?)
You're right.
The risk is very low.
Until it shows up.
And your retired colleague obviously doesn't agree that it is low.

And it's not clear that you really believe the risk is very low - otherwise why would you have asked the initial questions?
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

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Re: Employer will not indemnify me cause I am retired

Post by MikeG62 » Thu Aug 09, 2018 7:20 am

sschullo wrote:
Wed Aug 08, 2018 5:52 pm
Good Listener wrote:
Wed Aug 08, 2018 5:12 pm
I'd think about it this way. The employees are covered. Why? You are not getting paid nor getting covered. Why not? So why would you risk anything?
I think the risk is very low. The plaintiffs have to prove beyond a reasonable doubt that I harmed or been negligent when:
A. I am a volunteer, and a nonprofessional retiree (the committee has a paid financial consultant that provides quarterly reports of the plan).
B. I only have one vote out of 8 members
C. The committee has no power, and (how can I be negligent with no power?)
C. All we discuss reducing costs, including more broadly diversified index funds and demand transparency. (Again, how can I be found negligent?)
Forget what they have to prove. You'd have to defend yourself and that could potentially require very significant sums spent on legal defense.
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Re: Employer will not indemnify me cause I am retired

Post by BolderBoy » Thu Aug 09, 2018 11:10 am

sschullo wrote:
Tue Aug 07, 2018 8:38 pm
We were told that the district will not indemnify retired members. The other member resigned immediately.
You should, too.
I am not quitting. My umbrella insurance agent said that I was not liable because I am a volunteer, nonpaid, and most importantly, our committee has no power to make decisions.
So your insurance agent will pony up a lawyer to file the necessary paperwork to get you dismissed if you were in fact to get named in a Complaint? And will continue to provide you with representation if the judge decides not to dismiss you? I'd get that in writing from your insurance agent. If you have to hire a lawyer to take care of your, "no liability" situation, it'll cost you a bundle. And for what? Altruism can be expensive.

IANAL.
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Re: Employer will not indemnify me cause I am retired

Post by sschullo » Thu Aug 09, 2018 11:29 am

TIAX wrote:
Wed Aug 08, 2018 7:04 pm
sschullo wrote:
Wed Aug 08, 2018 5:52 pm
Good Listener wrote:
Wed Aug 08, 2018 5:12 pm
I'd think about it this way. The employees are covered. Why? You are not getting paid nor getting covered. Why not? So why would you risk anything?
I think the risk is very low. The plaintiffs have to prove beyond a reasonable doubt that I harmed or been negligent when:
A. I am a volunteer, and a nonprofessional retiree (the committee has a paid financial consultant that provides quarterly reports of the plan).
B. I only have one vote out of 8 members
C. The committee has no power, and (how can I be negligent with no power?)
C. All we discuss reducing costs, including more broadly diversified index funds and demand transparency. (Again, how can I be found negligent?)
That's incorrect. In a civil case, the plaintiffs would only have to prove by preponderance of the evidence (i.e., more likely than not) that you are liable. Beyond a reasonable doubt is the criminal law standard of proof. You keep mentioning factors that you think should affect the outcome of the case. Maybe they will and maybe they won't. I would speak with counsel knowledgeable in this field and find out.
Thanks TIAX,
"civil case, the preponderance of the evidence, beyond a reasonable doubt, criminal law standards of proof." By the time this discussion is completed, I will be ready to take the Bar! :D
I realize those factors I listed above are not about outcomes, I was thinking that my attorney with use as evidence when asking the judge to dismiss me. Yes, I would have to hire an attorney to get me to that place.
Thank you for time and your comments. I am torn beyond reason.
Steve
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Employer will not indemnify me cause I am retired

Post by randomguy » Thu Aug 09, 2018 11:56 am

Not exactly the same but this was talked about a while back: https://www.physicianonfire.com/hospital-board-sued/

And observational, nonvoting role resulted in a 3.5 year lawsuit and tens of thousands of dollars of legal expenses.

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