RAQs: Recently Asked Questions

Topic: Should Small Public Libraries Carry Bonds? - 10/12/2022
Is bonding recommended for small public library director?   ...
Posted: Wednesday, October 12, 2022 Permalink

MEMBER QUESTION

Is bonding recommended for small public library director?

 

WNYLRC ATTORNEY'S RESPONSE

I won't tease the readers here; generally,[1] the answer is "no."

There are three reasons for this:

Reason 1: a public library director, unlike a library system treasurer and other local "public officers" isn't required by law to carry a bond.

Reason 2: If a public library has the right fiscal controls in place (meaning the director is never solely entrusted with fiscal authority--something that should never happen), there should be little risk of the type "bonding" is designed to mitigate.[2]

Reason 3: the majority of alleged wrong-doing by a public library director should be covered by a library's "Directors and Officers" and "General Liability" Insurance.

For this reason, while "bonding" is not required for most public library directors, a library having adequate insurance is critical.

This is why understanding the scope and costs of a library's "Directors & Officers Insurance," as well as its "General Liability" and "Premises Liability" policies, are critical annual tasks for a library board.

This type of assessment should happen every year with enough time to make sure the library can arrange new coverage if the answers are inadequate or the rates aren’t that competitive (no less than four months before renewal).

Questions to ask the broker should be based on a board's assessment of "what could go wrong?", and can include things such as:

Does our policy cover claims of discrimination, including sexual harassment?

Does our policy cover employee theft?

Does our policy cover alleged copyright and trademark infringement (or "advertising injury")?

Does our policy cover data breach of computers controlled by the library?[3]

What types of claims are excluded?[4]

What is the deductible?[5]

What is the process for reporting possible claims?

Insurance matters are complex and assessing coverage can present a lot of legal and industry jargon.

So, as a primer on the interrelationships and differences in "library world” between 'bonding," "insuring," "indemnifying," "hold harmless" and "Directors and Officers insurance" here is a short poem:

Library bonding, insurance, indemnifications...

What the heck are the differentiations?

Although the distinctions could fill a tome

Here are four rhymes to bring it home:

Director, officer, trustee...

should be insured against liability;

For anyone who with responsibility

The coverage can offer indemnity.

If your library will undertake construction

A performance bond should guarantee completion.

If you need to raise some building money

An approved "bond" can bring the honey.

For a library system treasurer[6]

An "undertaking" you must procure.

For all of these, routine review

Is something that a board should do.

 

 

 

 



[1] There is always an exception to what is "generally" true in the law.  For instance, a large library that puts additional fiscal responsibility on the library's executive director could require such a thing.  But that would be the exception...to find out why, keep reading.

[2] What is "bonding" you ask?  I have a short poem for you (see below).

[3] Many times, it is the cooperative library system's computers that need this coverage...an arrangement that varies from system to system in New York.

[4] This is a critical consideration!

[5] This one is important!  If you have a $75,000.00 deductible, for many claims, you might as well not have coverage.

[6] Actual requirement for a treasurer of a cooperative library system is: "Before entering upon his duties, such treasurer shall execute and file with the trustees an official undertaking in such sum and with such sureties as the board shall direct and approve. The treasurer need not be a member of such board."

 

Tags: Legal Poems, Liability, Public Libraries

Topic: Permissions for Photos from Defunct Publications - 08/09/2022
An academic librarian relayed this question from a researcher/author: "I am in the stage of...
Posted: Tuesday, August 9, 2022 Permalink

MEMBER QUESTION

An academic librarian relayed this question from a researcher/author:

"I am in the stage of tracking down photo permissions and have found images originally published by U.S. presses from the late 1800s and early 1900s (1887, 1893) that are now defunct--hence I cannot request photo permissions from them. The images are posted online by historical societies, but I'm not sure if they're in the public domain or not.   I plan to reach out to the society publishing the images on their digital archives, and credit them for using the images, but is there any other factor to consider?"

 

WNYLRC ATTORNEY'S RESPONSE

First, some validation: the faculty member is wise to be considering this issue, since publishing contracts[1] almost always put the responsibility and liability for photo clearances on the author.

In this case, there are several layers of copyright ownership to consider: the original copyright of the photographer, the copyright of the books, and the copyright to any re- publication by which they are being made available (for instance, a digital archive).

Because of the publication dates (1887, 1893), the original copyrights (for the photograph and the original book), are most certainly expired.[2] The only concern would be if the images were somehow used to create a work with a "new" copyright...for instance, if the picture of the long-dead person was enmeshed with a picture of Janelle Monae on a rocket ship to Mars...which isn't the case here.

So, while in the law game there is a rule of "never say never," based on the dates, the images in this question should be free from copyright.  That said, as contemplated by the question, it is almost always a good idea[3] to extend a "courtesy acknowledgement" to a historical society, library or other archival resource that stewarded the image so it could be used for research. 

Even more important when using a digital source, however, is first confirming, and documenting, that the image isn't being taken from a website or repository in violation of any of their "terms of use" conditions.  Written confirmations from the archive, or keeping a screenshot of the "terms of use," image information, and metadata, are all good ways to do this.

Other risks of using old photographs for commercial publications are: the possibility that the image is being used as a trademark, and the possibility that the re-publication could make commercial use of images of deceased "personalities."  These should both be ruled out before publication.

In addition, when using a photo--especially for publication--it is a good idea to confirm that there are no ethical or relational concerns with using certain images.[4]  For these reasons, writing to the historical societies to inquire about images kept in their collections (as the faculty member in this example is doing) is a good idea...just ask for information, not permission.   Checking in with a person who focuses on ethical issues in that particular area of scholarship is wise, too.

 

 


[1] This is something "authorlaw.com" attorney Sallie Randolph and I often bicker about. I advise writers to resist such clauses (or demand better royalties for taking on the risk). Sallie, who has negotiated hundreds of author contracts, tells me this is not realistic advice, because for most major publishes, it's non-negotiable. But as I see it, everything in a contract is up for negotiation!

[2]  A good resource for double-checking the date when works are in the "public domain" (which can vary) is at https://guides.library.cornell.edu/copyright/publicdomain. Thank you, Cornell.

[3] I discussed this part with Sallie Randolph, too, and for once, we agreed! When contacting an organization about a public domain image, never ask for permission, but say something like "I am contacting to discuss using a public domain image from your [archive] to see how you would like the organization credited for having made the image available to researchers."

[4] For more on that, see "Ask the Lawyer" https://www.wnylrc.org/ask-the-lawyer/raqs/172.

 

Tags: Academic Libraries, Archives, Copyright, Liability, Photographs, Public Domain

Topic: /Liability Waivers for Library Fitness Programs - 07/26/2022
My hometown library has implemented a fitness waiver for their movement and exercise activity prog...
Posted: Tuesday, July 26, 2022 Permalink

MEMBER QUESTION

My hometown library has implemented a fitness waiver for their movement and exercise activity programs. I am wondering if this is a good idea for my library. We provide some exercise classes including chair yoga, Zumba, nature walks, and are looking into another movement class activity. For reference, please copy and paste the form used by my hometown library [redacted for anonymity] into your browser or refer to the attached screenshot. Are we within our legal/ethical practices to implement such a waiver? Will we need to consult an attorney to draw up the waiver for a fee, or can we borrow the language used by [redacted for anonymity]? Thank you.

 

WNYLRC ATTORNEY'S RESPONSE

I have a lot of fun-loving clients.  Here are some examples of activities I've created liability waivers for:

  • Mechanical bull riding
  • Smashing a car with a sledgehammer for charity
  • A "ToughMudder" event
  • Sword fighting

I have also worked on liability waivers for more commonplace activities like attending a hockey game, horseback riding, and cheerleading.[1]

The purpose of a liability waiver is to limit a person's ability to bring legal action for injuries related to a particular activity.  Therefore, the trick to creating a successful waiver is making sure it is enforceable when a worst-case scenario--an injury related to that particular activity--occurs.

Because of the high stakes--and because the law in New York can have an impact on how much liability can be waived (for instance, a waiver of liability at certain types of pools[2] is invalid, no matter how well-written) -- a waiver should almost always be custom-crafted to the actual activity, at a specific place, and thus not borrowed from another entity.

The waiver for the mechanical bull rider was different from the waiver for the hockey spectator.

The waver for the person venting their rage on a car for charity was different from the waiver for an equestrian.

The waiver for the sword fighter actually had more in common with the waiver for the cheerleader than you might think...but was still different.

Add to this diversity the fact that in New York, the waiver for a municipal library might have to look different from one used by another municipal library, or an association library, and there are a lot of variables to consider.

So, my answer to the question "Will we need to consult an attorney to draw up the waiver for a fee?" is: if your library wants assurance that the waiver actually protects the library from liability, then YES.

But wait, there's more.

I appreciate that for a not-for-profit such as a library, which likely doesn't have a budget to go around hiring lawyers to hand-craft waivers for every separate fitness activity (or if it does, would rather spend that money on materials and programming), bringing in a lawyer every time you want to sponsor a new physical fitness event can be cost-prohibitive.

So here are a few options between commissioning a new waiver for every fitness event, and just scrapping such events in the first place.

Solution 1: Pass the risk of liability on to the instructor

Any physical fitness class being offered by a library should be led by an instructor with the documented qualifications and insurance coverage to limit and cover the risk of injury related to the activity.

For a yoga class, this means the instructor should be able to show they 1) are certified by an acknowledged yoga authority; 2) are willing to accept responsibility for injury caused by their yoga class, and 3) have insurance that will cover such injury (whether the person sues the instructor, or the library, or both).

A contract showing all this will 1) recite the instructor's qualifications; 2) list their insurance (and attach a certificate showing the coverage; and 3) include a "hold harmless" and "indemnification." That means that if there is a claim of liability resulting from the classes, the instructor's insurance coverage will take the heat.

Such an instructor will, usually, have their own waiver that they require participants to sign, tailored to the precise activity.  Further, to most experienced instructors, none of this will be an outlandish requirement.

Does this mean that start-ups and amateur instructors might not be able to offer classes at your library?  Yes...and while it may seem harsh, that is a good thing.  If a person is great at yoga and loves sharing what they've learned, but doesn't have the documented credentials to assure the library that they know how to teach it, or insurance coverage, they should not be selected to offer a fitness class by your library.

The public attending a fitness class will trust that the library has picked the right person; having the ability to demonstrate a bona fide qualification and insurance is a key sign you've made the right selection.

Solution 2: Work with your insurance carrier

Your library likely has some form of general premises liability coverage.[3]  This means that an insurance carrier, on an annual basis, is sending your library a copy of an insurance policy--and the library is paying for it.

Aside from your board and employees, you know who doesn't want your library to get sued for an injury that happens during a fitness activity?  Your insurance carrier.

Now, what I am about to write may, or may not, be helpful.  In my experience, some insurance carriers will bend over backwards to make sure their "insured" doesn't get sued; they will offer training on risk management, they will offer employee screenings, and they will offer to review forms and policies.  Other carriers, on the other hand, will just accept a check for your library's annual premium, and wish you "good luck" with liability.

When your library is contemplating any physical event with a moderate risk (yes, like Zumba), it is a good idea to check in with the insurance carrier for the library.  Do they have waivers they want you to use (even if your instructor has held you harmless)?  Do they have rules they require you to post (even if the rules are pretty obvious)?  Is there an exception in your coverage (does it not cover fitness classes at all)?  All of this is critical to know before your library takes on any risk for a program. 

And who knows...I've actually had clients get the "all clear" from insurance carriers, who confirm "Yes, that is within the scope of your coverage, let the Zumba commence!"  It all depends on what's in the policy.

Solution 3: "One-Waiver-Fits-Most"

With a "one-waiver-fits-most" solution, an organization identifies a suite of low-risk activities, and asks that their lawyer write "one waiver to rule them all,"[4] and only offer that type of activity...saving costly custom waivers for riskier (and likely rarer) activities. 

What is "low risk" activity?  That is up to your lawyer, insurance carrier, and library.  But it in general a "low-risk" activity is one so low-key and mundane, with no heightened or specific risk, that an enforceable waiver covering it wouldn't require any special bells and whistles.[5]

Common examples of such "low risk" activities might include:

  • Nature walks in a town or city park
  • Organized bike ride in public park
  • Local history walking tour
  • Breathing or mindfulness class
  • Croquette, badminton, tennis, Wii[6]

Although they might seem low-risk, I would generally exclude from this list:

  • Yoga (including chair yoga)
  • Dance class
  • Any contact sports
  • Organized bike ride on public streets
  • Anything involving children running

THESE ARE JUST EXAMPLES...each library's list of "low risk" activities to be conducted with a "one-size-fits-most" waiver will change based on the library's type, level of insurance, and tolerance for risk.[7]

While not perfect, the "one-size-fits-most" solution is a cost-effective way to confidently offer programs from a menu of activities, while also protecting the library and not blowing the budget on legal services.

To ask a lawyer to write a "one-size-fits-all" waiver for your library, gather:

  • your insurance policies
  • code of conduct
  • list of typical activities
  • any grants funding the activities
  • Lease (if your library doesn't own the building)

Be ready to meet for maybe half an hour with the lawyer to discuss the fitness events that your library wants to host.  For municipal libraries, be ready to involve the town/village/city attorney at either the beginning, or the end, since depending on building ownership, and some other factors, the municipality may need to have some input on this too.

Mix that all together, and you should get:

  • a list of "low risk" activities,
  • a "one-size-fits-most" waiver;
  • some guidance on when you need an instructor contract;
  • instructions on how low to save signed waivers[8],
  • and a sense of reduced-liability confidence.

Happy Zumba!



[1] Cheerleading may be common, but it is fraught with risk!  P.S. NCAA: it should be considered a sport.

[2] New York Consolidated Laws, General Obligations Law - GOB § 5-326. Agreements exempting pools, gymnasiums, places of public amusement or recreation and similar establishments from liability for negligence void and unenforceable

[3] In my work with libraries, I have found this is not always the case.  One important annual task for trustees is to ensure that the library has adequate insurance.

[4] In writing.  Always confirm legal advice in writing.

[5] An example of a "bell and whistle" would be the specific warning: "horseback riding is inherently dangerous")

[6] Unless played the way my family plays, in which case, there is not enough insurance in the WORLD.

[7] Although I am willing to bet croquette is on the "low-risk" list state-wide.

[8] Yes, they can be signed and/or archived electronically, but confirm the method with the drafting attorney.

 

Tags: Liability, Library Programming and Events, Municipal Libraries, Public Libraries, Safety

Topic: Liability Insurance for Notary Services - 06/30/2022
Should libraries that have Notaries Public on staff have notary liability insurance for those libr...
Posted: Thursday, June 30, 2022 Permalink

MEMBER QUESTION

Should libraries that have Notaries Public on staff have notary liability insurance for those library staff? Or would that be covered by the library's general liability insurance? We don't want our staff who are providing Notary Public services to be putting themselves at risk.

 

WNYLRC ATTORNEY'S RESPONSE

These are very important questions.

Just in case any reader needs a refresher, a "notary public" in New York performs critical services: administering oaths and affirmations, taking affidavits and depositions, certifying acknowledgements or proof of critical documents (such as real property deeds, mortgages, and powers of attorney), and certifying copies of official documents.

Anyone who has ever had to have a document notarized knows how important finding "a notary" can be.

In New York, the power of notaries is summarized in Article 6 of the Executive Law.

Of relevance to the member's question, that law also imposes penalties for mis-applying a notary’s power:

"For any misconduct by a notary public in the performance of any of his[1] powers such notary public shall be liable to the parties injured for all damages sustained by them."

So, what does "misconduct" by a notary, for which they "shall be liable" look like?

Examples found in the case law of New York include:

  • Inattention to authentication of a signature resulting in allegations of a forged real property deed (Chicago Title Insurance Company v. LaPierre, 2013);
  • "Gross negligence" asserted after a notary allegedly authenticated a forged signature, causing a person not on a lease to be sued for its violation (Independence Leasing Corporation v. Acquino, 1986);
  • A bank suing for "notarial misconduct" when a forged signature led them to rely on a document guaranteeing a loan (Marine Midland Bank v. Stanton, 1990).

In each of these cases, the "liability" led to demands for money related to the alleged misconduct...as well as legal fees for having to sue.

Also of relevance to the member's questions, in addition to personal liability of a notary, case law shows that when misconduct is asserted against a notary who performed the service as part of their employment, the employer was also named (which is what happened in the Independence case listed above).

Of course, not all assertions of notarial misconduct will be found to be valid.  But since even a case brought in error requires a timely and effective defense, an assertion of notarial misconduct can cause expense (and stress!) for the notary (and their employer).   Which is why the member is rightly concerned about protecting a library employee serving as a notary.

With all that as background, to answer the member's questions, here are five critical steps before any employee should serve as a notary public as part of their work for a public (including association) library:

1.  Before offering the notary services of an employee, a library should confirm with their insurance carrier that their coverage includes a claim of "notarial misconduct."

In New York (and throughout the country, but we're focusing on New York here), different insurance policies include (and exclude) different coverage for things.

Because of this, there is no one "type" of coverage I can assure readers that will always cover an assertion of notarial misconduct. 

And because of that, a library should work with its insurance broker and/or insurance advisor, or directly with the carrier, to ensure (and then be assured, in writing) that such coverage is included in their policy (and extends to employees).

This is critical not only when insurance is first obtained, but whenever the carrier issues a new policy (or when there is a change of carriers). 

2.  Before offering the notary services of an employee, the library should confirm that offering notary services is in the employee's job description.

An employee who has taken the time to study the requirements, passed the exam, maintained the license, and operates as a notary as part of their work at the library, is taking on risk to offer something of value to the community. Adding that ability and service to an employee's job description accomplishes two important things.

First, it acknowledges the value of the license held by the employee.

Second, by making it clear that the employee is offering notary service as part of their job, it helps ensure that the library's insurance coverage will cover the employee if there is an assertion of notarial misconduct[2].

If the library cannot amend a job description to include this ability, the provision of notary services should not be a part of library services offered.

Further (and this is critical) if the library can't consider the employee to be offering notary services as a service, the employee should not notarize documents when "on the clock" for the library.

3.  Before offering the notary services of an employee, the library should confirm the adequacy of its internal procedures.

A notary public's function requires several things to ensure compliance: time to perform the function properly, good record-keeping to ensure that the function was properly performed, and consideration of how such records will be kept secure and confidential.

An example of this is found in the new guidelines for remote notary posted at dos.ny.gov/notary-public.

Screenshot from the new guidelines for remote notary. Text reads: Is a notary journal required? Yes, the notary public must keep a journal of all remote notarizations performed. Each journal entry must be made contemporaneously with the performance of the notarial act, and each entry must include the date and approximate time of the notarization, the name of the remote signor, the audio-visual technology used to perform the notarization, the number and type of documents officiated and notarial services provided, and the type of identification/credential presented by the remote signor of the document or documents. The journal must be kept by the notary public for as long as they remain a notary and for an additional five years thereafter.

In addition to what is required by law, the library's insurance carrier may also have some requirements, so a solid internal procedure should include their input, at well.

And of course, whatever is needed should be supported in the library's budget.

4.  Before offering the notary services of an employee, the library should confirm how it promotes awareness of the service.

Section 135-b of the Executive Law also sets some rules for how notary services are advertised!  Because of this, libraries should be careful about how the notary services are promoted.  For more on that, see the rules posted by the New York Department of State at:

https://dos.ny.gov/system/files/documents/2022/04/notary.pdf

And finally...

5.  Please don't let the red tape in this answer stop your library from offering notary service.

I know the considerations of this answer have gone a little further than the specific content of the question.

Further, I know that words like "liability" and "misconduct”, and "insurance" can be intimidating, and signal expense.

However, for anyone out there who has ever had to desperately search for a notary public on a time-sensitive basis, you know that assured notary services are a real boon to a community.

I encourage any library who is offering notary public services, who may read this and think "uh-oh," to consider it a critical community service that is very much worth the time and effort to properly support.

In addition, I urge libraries to support and honor the hard work of any employee who has obtained their notary license by ensuring these steps and make sure they have the proper resources to offer the service confidently.

In that spirit...many thanks to the member for an important set of questions!



[1] This is a verbatim quote.  Although the use of the pronoun "he" suggests there could be a loophole for those who use another pronoun, notarizing is a non-gendered sport for anyone who has attained the age of 18, and charges of misconduct are open to all.

[2] Of course, if the alleged misconduct is willful (for instance, aiding with deliberate fraud) the carrier will likely disclaim coverage of the employee...but may still cover the library (a scenario to discuss with the carrier).

 

Tags: Liability, Public Libraries

Topic: Patrons Who May Be Potential Targets of Scams - 05/25/2021
Our library offers a variety of business services such as copying, scanning, emailing, and faxing,...
Posted: Tuesday, May 25, 2021 Permalink

MEMBER QUESTION

Our library offers a variety of business services such as copying, scanning, emailing, and faxing, and we also have staff on hand to assist patrons with these services. We often have patrons request assistance with scanning and emailing or faxing sensitive documents including checks (with banking/routing numbers), driver’s licenses, Social Security cards, or other financial/legal documents.

I am wondering:

a) What responsibility do library staff have to inform a patron if we think they may be in the process of communicating with and sending documents to a scammer? How do we protect our patrons from scams/fraud while also respecting their privacy?


b) How liable is the library/library staff if a patron is scammed after library staff use library resources to send documents/information that played into the scam, even at the patron's request?

WNYLRC ATTORNEY'S RESPONSE

This question tugged at my heart, because lawyers face issues like this, too.[1]

Maintaining confidentiality while addressing concerns that a person is being victimized creates terrible tension.  The need to maintain a trusting relationship, governed by professional ethics, makes the tension all the more acute.

It is those professional ethics, however, that will carry the day.

What is the basis of a librarian's obligation of confidentiality?  Confidentiality of library records is, of course, protected by state law,[2] but it starts in item "III" in the ALA Code of Ethics[3]:

III. We protect each library user's right to privacy and confidentiality with respect to information sought or received and resources consulted, borrowed, acquired or transmitted.

But this issue also related to item "I" from that Code:

I. We provide the highest level of service to all library users through appropriate and usefully organized resources; equitable service policies; equitable access; and accurate, unbiased, and courteous responses to all requests.  [emphasis added]

So, here we are: iron-clad confidentiality, coupled with "unbiased" responses to all service requests.  From within those ethical boundaries, the member has asked:

  • If there is an obligation to protect a patron from a suspected scam;
  • How they can help even if there is not an obligation; and
  • Could the situation lead to liability for the library?

There are information management professionals far more qualified than I to discuss the professional nuances of these questions.  But from the legal perspective, and to address the legal questions about obligations, protection, and liability, here are my answers.

Question 1

What responsibility do library staff have to inform a patron if we think they may be in the process of communicating with and sending documents to a scammer?

Answer 1

There is no legal duty to inform a patron of this suspicion.  Further, I see nothing in the ALA Codes of Ethics that makes it an ethical duty of the profession. 

Question 2

How do we protect our patrons from scams/fraud while also respecting their privacy?

Answer 2

We have reviewed that there is no legal or ethical obligation to "protect" a patron in these circumstances, and there can even be concerns related to trust, confidentiality, and perceived bias that mean a librarian should keep their suspicions to themselves.

However, neither the requirement to be confidential, nor the obligation to provide services without bias, stop a librarian from doing what they do best: sharing information.  And nothing stops a library from pre-assembling a compilation of available resources the library can use to empower a patron to assess if they are being scammed.

Here is a scenario showing how such a "compilation" could be used:

PATRON: I need to print an email.

LIBRARIAN:  Sure, the computer in over here.  Let me know if you need instructions on how to print. 

PATRON:  Can you also help me find the email?  It has instructions to wire money.  It's from my grandson, Michael.  Normally I would ask his mother to help me but this is a real emergency and I can't tell her what's happening, it would just kill her.

LIBRARIAN: I am happy to help; there, it's printing. [pauses] You know, this request reminds me of something I read/heard about.  Do you want to know about it?

PATRON:  Sure.[4]

LIBRARIAN [searches for "bail the grandchild" scam]:  Here it is.[5]  [Retrieves list of information.] And here is a resource about who to call when there is a concern about the type of thing on this website. [Hands patron list of resources]

[end scene]

Here is a template for this type of "list of resources":

"Trust but Verify"

A guide to checking the legitimacy of

requests and correspondence.

Compiled by the [insert name of library].

 

Have you been told you suddenly owe money?

 

□ YES   □ NO

 

Has there been a request for account or personal information from a new or unusual source?

 

□ YES   □ NO

 

Has someone told you a family member is in danger?

 

□ YES   □ NO

 

Is someone pressuring you to make a quick decision about money?

 

□ YES   □ NO

 

Does something about outreach to you just not feel right?  Or does it seem "too good to be true"?

 

□ YES   □ NO

These days, scammers can pretend to be from the IRS, Social Security, or even your religious organization or family.

There are resources to help you let the good guys in, while keeping the bad guys out.  Here in [library location by county or municipality], the following resources can help you make the right call:

  • [Insert any local volunteer lawyer projects]
  • [Insert local bar association referral service]
  • [Insert any county or municipal resource]
  • [Insert other local resource]
  • [suggested link: Better Business Bureau (https://www.bbb.org/us/ny/buffalo)--which "Scam Tracker" search, or similar]

 

Free for anyone 55 or older, there is also:

https://elderjusticeny.org/resources/senior-legal-advice-helpline

1-844-481-0973

HELPLINE@ELDERJUSTICENY.ORG

Your banker, lawyer, or accountant will also be able to help you confirm the source of requests for wire transfers and other financial transactions.

...Or you can ask a librarian to help you find a resource suited to a particular document or situation.  We can't tell you what's legit, but we can help you find the people who can.

Don't feel bad asking, even data security specialists have to "Trust, but Verify" these days!

A simple offer of information, and a plain-language resource like this can be a handy way to raise concerns without having to tell someone "You're being scammed." 

At the end of the day, not all patrons will be receptive to this offer of information, and not all patrons will believe they are being scammed--even if their story matches a scam-scenario. 

But no matter what the patron's reaction, by taking this approach, the librarian will have done the only thing the librarian is ethically obligated to do in this type of situation: provided unbiased services, and granted access to information, while maintaining the confidentiality of same.

Question 3

How liable is the library/library staff if a patron is scammed after library staff use library resources to send documents/information that played into the scam, even at the patron's request?

Answer 3

If the librarian suspects that the scenario could be an illicit scam, but doesn't know this is phishing, social engineering, or another type of activity that can lead to fraud, there is no responsibility for what happens next (unless the library has adopted an internal policy[6] stating otherwise, in which case there could be some employer-imposed consequences).

On the other hand, if the librarian somehow knows that the scenario is an illicit scam, and actively helps with the commission of what they know to be a crime, then yes, there could be liability.  But once such a scam is known, not merely suspected, this becomes a whole other question.[7]

A few more comments

Another aspect I want to address is if the librarian is concerned not that the person is being duped, but that they don't have the mental capacity to comprehend and/or remember they are being duped

People with Alzheimer's and other conditions impacting cognitive ability may rely heavily on an established routine of visiting their local library.  Further, people with that impairment still may be able to function independently for most aspects of their day. However, a librarian detecting a possible scam could be on the front line of a legitimate concern that they don't have the function to assess the situation.

There are too many permutations of this situation for me to give general guidance, except to say: if there is a concern that a person can be vulnerable to harm due to a medical condition or disability, but their condition is not so extreme that there is clearly a justification to call medical services, call an expert.

If the person is over 55, the Center for Elder Law and Justice is a great resource; they address these types of issues every day, and their hot line is there to help assess a situation and identify possible next steps.  If the person is not over 55, a good resource could be the local Social Services agency.

Conclusion

When it comes to this issue, my overall advice is to remember that as a resource to the community, library employees are there to provide access to information and resources, not to protect people from harm.  The good news is, by providing that access in a manner consistent with library ethics, library employees can help patrons protect themselves from harm.  And that is how a library can help stop a person from being scammed.

Speaking from experience, I can say that not every person will take information when it is offered.  There are times when the only comfort that can be taken from a situation is to know that you tried your best.  But by focusing on the ethics, and the provision of information, a librarian can help a person identify a scam, and avoid legal entanglements.

I wish you strength on this one.  Your patrons are very fortunate.



[1] And if there are any accountants, athletic trainers, or mental health counsellors who (for some reason) read an "Ask the Lawyer" column for libraries, museums, and historical societies, I bet it sounds familiar to them, as well.

[2] CPLR 4509

[3] Which is replicated in the New York Library Association Code of Ethics.

[4] Don't worry, we'll also address what you can do if the patron says "No, just help me scan my driver's license," and what to do if you are concerned the person doesn't have the capacity to make an informed decision.

[6] It is interesting to contemplate if there could be a policy for the use of information transmission equipment (phones, faxes, scanners, email, etc.) that included a provision that "Library employees who suspect a patron is falling prey to or contributing to a criminal enterprise must immediately report their concerns to the director for appropriate action under the relevant policy;" linked with a provision in a Code of Conduct "Patrons using library resources.”

[7] I struggled to come up with a scenario where the librarian knows the scam is on, but here goes: A librarian is a personal friend of Jeff Bezos.  A patron comes in and says Jeff Bezos wants to give $50,000.00 to the patron and 5,000 other lucky people; they just need to wire Jeff $5,000.  While helping to print the wire instructions, the librarian calls their friend Jeff Bezos to ask: "Hey, Jeff, are you giving fifty thousand dollars each to five thousand people?" at which point Jeff Bezos laughs and says, "No way, but can you believe some people are actually wiring me money?  Now I can repaint my third yacht.  Best scam ever.  Hey, want to go fishing?"  Now the librarian knows it's a scam; if they help in any way after that, they are arguably complicit.

Tags: Forgery and Fraud, Liability, Privacy

Topic: Can a public library set up a separate LLC? - 10/21/2020
A public library is looking at the possibility of taking over the running of a medical loan closet...
Posted: Wednesday, October 21, 2020 Permalink

MEMBER QUESTION

A public library is looking at the possibility of taking over the running of a medical loan closet that has been previously run by a church.

The library would find a space through a partner, so it would not be on library property.

The library would be responsible for cataloging the items, tracking their circulation, and applying for grants to help with funding.

The local visiting nurses have volunteered to handle the distribution of equipment, and are willing to continue if the library takes it over from the church.

The library's director and trustees are concerned about insuring the library to protect it in the event that someone gets hurt using a piece of equipment and there is the possibility of a lawsuit. They talked to their insurance agent and the company they use would not cover this.

A discussion came up about starting a separate LLC for the medical loan closet that the library would be openly affiliated with.

Would it be possible for a public library to set up a separate LLC to do this?

WNYLRC ATTORNEY'S RESPONSE

Before I answer, let's talk about why a person or business might create an LLC ("limited liability company").

A primary function of an “LLC”[1] is to do exactly what the member has proposed—to create a separate entity designed to hold the liability associated with a particular venture.

Examples of how an LLC can be used to take on liability (and keep it from flowing to its owner/s) include: ownership of rental properties, operation of restaurants, and yes, collaborative formation of charitable initiatives, like a medical closet operated in affiliation with a library.[2]

This is because, when set up properly, an LLC allows its "members"[3] to have an ownership stake in the company, while minimizing the risk of liability associated with the LLC adhering to other parties (like the members).

For this reason, a lot of property owners and participants in risky ventures[4] use an LLC to contain the liability that could result from the risks of the venture.  This helps with insurance, critical decision-making, and keeping unrelated assets separate from the liabilities of a venture.

Aside from this primary “separation of risk” function, the LLC model also allows creative arrangements for financial operations and tax considerations.  Among many other things that relate to ownership of family businesses, and complex corporate structures, this includes allowing one or multiple 501(c)(3)[5] not-for-profit charitable entities to form an LLC that will have a similar tax status. 

So the "short answer"[6] to the member's question is: YES.

That said, I do have a "long answer" composed of several considerations and caveats, which I hope will be helpful.

Consideration 1: Audit.

While the laws governing public libraries[7] do not forbid--and arguably expressly allow--an education corporation like a public library to own, or partially own, the asset of an LLC[8], a review of various New York State Comptroller audits[9] shows that any assets flowing between the two entities will be considered subject to all the requirements that must be followed by the library.

In other words, if the State Comptroller conducts a fiscal audit of the library (as State Comptrollers are randomly wont to do), the Comptroller will not only look at the books of the library, but also the books of the LLC—subjecting them to the same scrutiny as the library. 

So, to the extent money and resources flow from the library to the LLC, the same constraints on procurement, investment, and other use of assets will be imposed on the LLC.  This could bar or limit the activities of the LLC, so should be a primary consideration when it is formed.

Consideration 2: Operations

By "operations," I mean: who is helping the LLC get the work done?

In the scenario submitted by the member, it is the library who will "be responsible for cataloging the items, tracking their circulation, and applying for grants to help with funding."  Meanwhile "local visiting nurses have volunteered to handle the distribution of equipment."  And finally, as described by the member, the storage/pick-up (the "Closet") will be off-site (not on library property).

This means that the LLC would rent/borrow the space for the Closet, volunteer nurses would work there helping to distribute equipment, and the library would use its personnel to track the lending and equipment.

And although the member doesn't specify, let's say the library doesn't use its own circulation system for this, but instead, buys or builds a custom system—maybe even something as simple as an Excel spreadsheet.[10]

So the library would supply the "time and talent" of its people on an ongoing basis to the LLC, perhaps tracking it as an in-kind support to the charitable venture,[11] and also separately purchase assets that would be solely owned and used by the LLC.

This "time and talent," is where "risk and liability" for the library—even with an LLC housing the operations—truly enter the picture.  Even with a separate entity designed to take the hit, when an entity supplies its own people to staff a venture, there is always some risk that the direct involvement of a third party can lead to an assertion of liability (when people sue, they often look for not only deep, but multiple pockets).

How do you solve that?  It takes two things:

Consideration 3: The Operating Agreement

By law, every LLC must have an "Operating Agreement" that specifies how the "members" run the company.  For small, simple LLC's, an "OA" can be a fairly short document.  For complex ventures with detailed financial goals and complex management structures, an OA can be hundreds of pages.

In the case of a "Medical Loan Closet" LLC meeting the criteria in the member's scenario, the operating agreement would have to address, head-on:

  • The precise responsibilities of each member[12]; and
  • The in-kind services being supplied by each member; and
  • The precise terms under which individuals would contribute their services, including volunteers; and
  • The precise way assets of the LLC are purchased, loaned, and de-accessioned (this is the part the Comptroller would look at); and
  • How the premises of the Closet is managed and insured; and
  • Most critically, the way the LLC would hold harmless and indemnify the participating parties for any assertion of liability against them based on LLC operations.

Which brings us back to...

Consideration 4:  Insurance

At the end of the day, this question is about two things: 1) how to do a good thing for a community; and 2) how to make sure the organizations doing that "good thing" properly manage the risks of doing it.

While much of this can be addressed via good planning, rigorous equipment maintenance,[13] and proper paperwork, as can be seen in "Consideration 3,” and as the member clearly knows, a venture that will be so closely connected to people's physical health must have some form of insurance. The coverage should extend to every person with either a fiduciary, employment, agency, or volunteer relationship with the Closet.

While precise coverage amounts should be determined by the participating parties, my instinct is that there should be at least $1 million of coverage per incident, with no less than $3 million/year aggregate.[14]  But it will depend on many factors.

So, what to do?

Many times, there is a very solid reason to start an LLC.  If the Closet described by the member was going to own real property, have its own employees, apply for grants, and in general, take care of most of its operations in-house, with the support—but not the direct service—of the members, I'd say that was the right solution for this scenario.

However, if the Closet is to be a collaborative effort that will rely on the direct services and assets of the member organization/s (in this case, services by library employees, on library time), in my experience[15], a tightly structured plan that properly establishes the responsibilities of the collaborating parties—and ensures there is proper insurance coverage for all involved—might be the most practical way to move forward. 

This will also position the library to do the right type and amount of "volunteer vetting" and to properly confirm the conditions of (and insurance coverage for) the volunteers.

So, on a practical level, what am I saying?  A library can spend thousands to set up a charitable LLC to run a Medical Loan Closet[16], and then about a thousand or so a year to ensure the proper administration of that LLC--or it can develop the Closet as a program of the library (either stand-alone, or in collaboration with others) and spend the money on additional risk management and insurance. 

After all, we're not talking small engine repair, here.  Lending things—even if it is health-related equipment—is part of any library's core mission.

At the end of the day, many factors will play into the decision to use 1) an LLC, 2) a collaboration agreement[17], or 3) to simply operate the Closet as a new program of the library (with some volunteer agreements for the nurses). 

To get to the part where the library can make the decision, I advise developing an "Operational Plan"[18] for the program, and getting quotes from several insurance carriers as to what the coverage would costs for your library and/or for a new entity to conduct the activities in the Operational Plan.

Since there will be a lot of detail to review, a small ad hoc committee[19] consisting of a board member or two, the library director, any other person whose input will be helpful, and the library's attorney, can then review this information, and come up with a solution to pitch to the board. 

And when that pitch is made, everyone should be confident that there is no "wrong" way to develop a new, life-saving lending initiative—so long as the way selected clearly defines everyone's responsibilities, establishes that clarity in writing, assures legal and fiscal compliance, and ensures everyone helping out is covered by insurance.  With the right attention to detail, this could be an LLC—or another solution.

I wish this venture luck and stout hearts for getting it over the finish line; it sounds like a great asset to any community!



[1] When I write about LLC's, I really struggle with putting "an" before an acronym that begins with a consonant ("LLC").  But the rules on "indefinite articles" assure me it is proper.

[2] There are some questions about the operation of a collaborative 501(c)(3) LLC in New York, but they happen, and haven't been shot down yet.

[3] "Members" is what the New York State Limited Liability Company Law calls owners.

[4] I don’t mean “risky” as in “Don’t drive that Pinto!” In in this context, “risky” applies to any venture that has a risk of exposure to legal claims due to having premises, employees, contractual obligations, or providing goods/services.  In that context, even my own law office (which is a type of LLC) is “risky.”

[5] "501(c)(3)" is a designation from the IRS that allows a library or other charitable organization to accept donations while the donor takes a deduction.

[6] Trust me, this WAS that short answer!  Another business lawyer who reads this will find it pretty skimpy.

[7] The Education Law, the Not-for-Profit Corporation law, the General Municipal Law, the Public Officer's Law.

[8] This is NOT to say that the local library could engage in a hostile takeover of the LLC-operated laundromat next door to ensure the very loud HVAC system is turned off during children's story hour.  A not-for-profit, and a public library, both have extensive rules regarding what assets and investments they can own, and how they can benefit from them.  But it could be done (in my hypothetical, it could be done if either: a portion of the laundromat income was a directed donation used to purchase special collections OR if use of the machines to clean clothes while reading or using library Wi-Fi was a free service to the community tied into the library's Plan of Service.  Which, by the way, would be AWESOME).

[9] When I want to relax, I just pop on over to the Comptroller's "library audits" page at https://www.osc.state.ny.us/local-government/audits/library, and have a jolly good read.

[10] My apologies if my assumption that such a project could be tracked via Excel is laughable.  While I can script out workflow and compliance protocols like a pro, my database programming skills stop with a 4-column chart in "Microsoft Word."

[11] Remember, the assets of both a not-for-profit and a public library come with heavy restrictions.  This includes the "asset" of the workforce.  In this scenario, we're assuming all the right paperwork for "lending" employees to a venture is properly in place...not something to assume lightly in the Real World.

[12] Operating a charitable LLC is fairly simple after the start-up phase, but there are routine tasks that must be kept up with: book-keeping, audit, routine IRS and Charities Bureau filings, compliant procurement, de-accession.  Consider who will be responsible for all these things.

[13] This consideration—about properly maintaining loaned health-related equipment—is addressed in the RAQ response to a question we got back in April 2020 about lending a Telehealth kit, which is found here: https://www.wnylrc.org/ask-the-lawyer/raqs/132.

[14] A great short cut on this would be to find some other medical loan closet programs in New York and ask who their carrier is.  Establish your credentials and tell them why you need the information first, though...places get VERY nervous when you ask who their insurance carrier is!

[15] At this point, I have worked on joint ventures for educational purposes, arts purposes, community gardens, the development of apps for civic transparency, community murals, and just about every feel-good thing you can think of.  I will never be rich, but I love my job.

[16] A word of caution: the phrase "Medical Loan Closet" is part of a name protected by a trademark, the "Wichita Medical Loan Closet" which can be seen here: http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4806:g09zye.2.1. When developing a "closet" program here in New York, take care to distinguish your brand so there is no risk of getting a cease-and-desist.

[17] Remember, a “collaboration agreement” is different than an LLC’s “operating agreement.”  A “collaboration agreement” unites the efforts of two or more entities creating the venture, and manages risk WITHOUT creating an LLC. 

[18] The "operational plan" will evolve once you make the decision about the entity type, but to start it is just a description that sets out how the Closet will run.  If the idea is largely to use the same model used by the current operator, that is a fairly simple task, but make sure to include every role and responsibility, simply noting "TBD" is you don't yet have an answer.  An inventory of equipment will be an essential component of this exercise.

[19] Since I have hit you with a lot of detail that could be daunting, I will add this gratuitous advice: if possible, have a meal or fun snack at your planning meetings (even if they have to be via Zoom right now).  I have been working on a charitable planning committee, and by turning it into a convivial experience, we are getting through some fairly obscure stuff while staying in touch with basic human joy.

Tags: COVID-19, Policy, Public Libraries, Liability, LLCs, Loaning programs

Topic: Patron Barefoot Rights vs. Liability - 10/4/2019
We have a patron who insists that it is their right to go barefoot into any public area....
Posted: Monday, October 7, 2019 Permalink

MEMBER QUESTION

We have a patron who insists that it is their right to go barefoot into any public area. Okay, but, being a public (Association) library, aren't we still liable even if that person injures themselves on the property even if they 'say' they wouldn't sue us? Is there a law that defends their position and if so, how do we defend ourselves from litigation? Should we have them sign a waiver? Any help is greatly appreciated!

WNYLRC ATTORNEY'S RESPONSE

To answer this question, I had to switch things up, and pretend that one day, there I am, sitting in my office,[1] when a barefoot person walks up to my door and asks “I want enjoy my library privileges while barefoot, and they won’t let me.  Can they do that, or can you help me sue?[2]

If someone actually paid me for a consultation related to this conundrum,[3] here would be my diagnostic process.  For the sake of argument, let’s say that for every question I pose, the answer is, “No.”

  • Do you have a disability that requires you to be barefoot?
  • Do you hold a sincerely held religious belief that requires you to be barefoot?
  • Does this rule disproportionately impact you as a member of a protected class?
  • Are you subject to some type of judicial order that requires you to be barefoot?[4]
  • Have you observed that other patrons at the library are barefoot, while a rule against going barefoot is being selectively applied to you?

Once I got through establishing that the answer to each question was “no,” I would then likely say: “Well, I am sorry, but whether it’s public or private property, if shoes are required by the library, I see no basis for a claim.”

Of course, the law is always evolving, but right now, simply being “a person who wants to go barefoot,” is NOT a protected category in New York State.  So, whether it’s my house, McDonald’s, or the local (school, association, or public) library, the old rule “no shirt, no shoes, no service,” can still apply.

This right to impose reasonable and uniformly applied conditions for entry—like shoes, shirts, and leaving beverages at the door—is rooted in the concept of real property (ownership of land).  A person or organization that owns land can impose (with varying degrees) restrictions on how others may access it.  And unless connected to an established[5] or fundamental right—like freedom of religion—those restrictions cannot be challenged via lawsuit (although for a library governed by a board, it can be challenged and changed as a matter of policy). 

The concept of requiring certain attire in relation to property is common in New York’s laws, regulations, and case law.  Country clubs may require a formal style of clothing, while barring cleats and spikes indoors.  Children’s camps may require kids to wear shoes (with backs!).  Since this answer gave me an excuse to do the research, I even learned there is a state-imposed dress code for recently legalized MMA (Mixed Martial Arts): man must be shirtless, while women must wear tops (I can’t imagine this gender-based rule will go unchallenged for very long).[6]

Why all this commentary about the law and clothing? I’ll make it clear.  Libraries—whether they are public or private—have the right to require visitors to wear shoes, to wear clothing that covers certain portions of the body, and to check their beverages at the door. This goes hand-in-hand with the right to require that people not play loud music, not be disruptive, and not import disturbing body odor beyond a certain personal zone.[7]

It is important, however, to have a clear and uniformly enforced policy for imposing these reasonable conditions.  The minute a small child is allowed to go barefoot in the library (bad idea!), an adult can try to claim that right, too.  And extreme care should be taken to not adopt policies that can impact protected classes of people (barring head coverings, for instance), unless a lawyer has been consulted in the drafting of the policy, and staff are well-trained on the nuances of enforcement.

So, to bring it back to the member’s question: there is no need for a liability waiver, if your library simply wants to insist that people wear shoes.  On the flip(-flop) side, if a library wants to explore a “barefoot-positive” policy, more than a waiver would be needed to address the risks: a board would have to explore all the risks caused to those not wearing shoes in a place with heavy books, carts, lots of foot traffic, and many tables and chairs.  That risk assessment would consider not only the likelihood of injury, but workplace safety rules, insurance carrier requirements, and the interaction of such a policy with other institution-specific practices (particularly, how often they clean the floor).

Again, this all comes down to the requirements and needs of a particular library, on a particular piece of property, governed by a particular set of rules.  I want to stress: such factors are variable.  The “National Yoga Library,”[8] or a library based around a culture where shoes are left at the door, would have a different perspective on this issue, perhaps insisting on a no-shoe policy (there are some places where it’s shoes that are considered dangerous and unsanitary, which makes sense, when you think what they walk through).  But for most libraries in New York, where for six months of the year our floors are coated in slush and salt, and furniture design presents many a hazard for unshod feet, “shoes, please” is likely the policy of choice.  And it’s okay to insist on it.

Thanks for a great question!



[1] We have a storefront office on a busy city street, so this is actually a possibility.  There’s never a dull moment on the West Side of Buffalo.

[2] NOTE:  Before I let this person into my law firm, I would insist they put on some shoes, or I’d meet them outside.  This is because, while I may have liberal ideas about intellectual property and how to run a business, I am a fuddy-duddy about certain conventions (like civility, yielding to pedestrians, and covered feet).  Someone once called me an “innovative curmudgeon;” I took that as high praise.

[3] NOTE: I would likely not take this consultation.  I work with so many libraries, it would probably be a conflict of interest.

[4] I can’t fathom what type of restraining or protective order would require a person to not wear shoes, but in my business, I’ve learned to “never say never.”

[5] If you ever want to kill the mood at a party, ask me about the many laws that govern land use: zoning, permitting, environmental law, historic preservation, urban planning, construction, building code, municipal law, landlord-tenant, real property procedure, restricted giving….  Yep, land use law can destroy a festive mood in ten minutes or less.

[6] 19 NYCRR § 212.5 “Proper attire of contestants”

[7] If this concept sounds foreign to you, and you work in a library, my impression is that you are in a happy minority.

[8] I do a lot of yoga.  No matter what studio I am at, if I forget to leave my shoes at the door, I get a very quick “what you are doing is not cool with the universe” reminder to take them off.  In the yoga studio, bare feet are the rule, which is why most yoga places have a high budget (or offer work-trade) for floor cleaning.

Tags: , ADA, First Amendment, Liability, Management, Policy

The WNYLRC's "Ask the Lawyer" service is available to members of the Western New York Library Resources Council. It is not legal representation of individual members.