ALEXANDRIA, Va. (3/9/12)--In the latest legal opinion letter posted to the National Credit Union Administration (NCUA) website, the agency said it is permissible for a federal credit union and an ex-employee to have a contractual agreement that the person will never run for the board of directors or serve on the supervisory committee.
The legal opinion letter, which is dated January 20, describes a situation in which a former employee of an unnamed credit union was offered a lump sum payment, and the chance to say they voluntarily resigned from their former position instead of being fired, if they agreed to certain terms.
Those terms included signing a confidentiality agreement, releasing the credit union from any claims, and refraining from seeking election or accepting appointment to the credit union's board of directors or supervisory committee for five years from the separation date. While the member in question said the final part of the agreement violated their rights as a member of the credit union, NCUA Associate General Counsel Hattie Ulan said this sort of agreement is permissible under the Federal Credit Union Act.
"While an FCU may impose only a few limitations on eligibility for election to the board of directors, a member may contractually agree not to run for or accept appointment to the board. For such a contract to be valid, the member must receive something from the FCU in return," the NCUA said.
Ulan said other aspects of the contract would be subject to state law.
For the full opinion, use the resource link.