Federal Funding: The Tie That Binds Education NPOs To Expanded Liability Exposure

Written exclusively for ChubbWorks for Not-for-Profit Zone

Dr. Angela Marathakis, the former Athletics Director at The Albany Academies, sued the school, alleging wrongful termination and equal rights violations.

Marathakis alleges she was fired because she is an openly gay woman who advocated for equality in girls' sports at the school. The lawsuit, filed on October 25, 2024, contains allegations outlining her efforts to address the apparent lack of equal funding for girls' programs, which were met with resistance from the school.

Marathakis alleges that during her tenure, she faced harassment from male colleagues and an administrator, who frequently engaged in unprofessional behavior, including yelling at female employees and making sexual jokes. Despite the school's knowledge of this behavior, no corrective actions were taken. Marathakis was terminated on March 19, 2024, shortly after the school announced structural changes, including staff layoffs.

https://cbs6albany.com/news/local/albany-academies-sued-accused-of-wrongful-termination-and-equal-rights-violations

Commentary

In the above matter, the complainant states she blew the whistle on unequal funding of girl sports; endured a hostile work environment; and was targeted for layoff because she blew the whistle.

Title IX of the Education Amendments of 1972 is a federal law that prohibits discrimination based on sex in education programs and activities that receive federal financial assistance. This includes protections against sexual harassment and assault, ensuring equal opportunities in athletics, and addressing discrimination in admissions and employment.

Title IX also provides protections for whistleblowers. Retaliation against individuals who report misconduct, participate in investigations, or support others involved in Title IX cases is explicitly prohibited. This means that any adverse actions taken against these individuals, such as threats, harassment, demotion, or exclusion, are considered retaliation and are illegal.

The defendant in the above claim must have received federal funding in the form of a grant or assistance. The moment the defendant accepted federal funding, it opened itself up to Title IX in addition to its existing exposure under Title VII of the Civil Rights Act of 1964 which applies to all employers with 15 or more employees.

The final takeaway is that if your NPO is accepting federal funding, it significantly increases its equal employment liability by bringing into play other statutes, like Title IX, that apply to other government and private organizations. 

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