ALEXANDRIA, Va. – NCUA on Tuesday said a credit union may bar an employee who agreed to resign instead of being fired from running for the board of directors under a proposed separation agreement.
“A member may contractually agree not to run for or accept appointment to the board,” said NCUA in a new legal opinion posted yesterday. “For such a contract to be valid, the member must receive something from the FCU in return.”
The proposed separation and release agreement offers employees a lump sum payment and the opportunity to have their personnel file reflect that they resigned rather than be terminated in exchange for several conditions, including confidentiality of the terms, releasing the credit union from any claims, and refraining from running or accepting appointment to the board or supervisory committee for five years.
The member sought the legal opinion from NCUA on the grounds that the bar from running for the board may violate the employee’s rights as a credit union member.
