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Associations

Antitrust

Because trade associations bring together competitors, they require antitrust advisors who can provide, in real time, counsel on how competitors can engage in lawful conduct and avoid illegal behavior. We advise our association clients on the entire range of antitrust issues, including membership requirements and restrictions, self-regulation, accreditation and certification programs, information exchange programs and standard setting. We have advised our clients with respect to investigations by the Federal Trade Commission and the Department of Justice and have litigated dozens of cases seeking to overturn membership discipline decisions on antitrust and other grounds.

 

Certification, Accreditation and Standard-Setting Programs

A number of our association clients rely on our experience with respect to certification, accreditation and standard-setting programs. We understand the various issues that impact these programs, including antitrust, tort, and Americans with Disabilities and work to minimize our client’s exposure while still allowing them to fulfill their mission.

 

Contracts

We regularly review a wide range of contracts for our association clients. We understand that certain contracts, such as hotel and convention center contracts and membership management software license agreements, can be key to the success and/or survival of an association. We have negotiated hundreds of hotel and convention center contracts and understand how to limit an association’s exposure. We have litigated a number of attrition and/or cancellation cases and are familiar with the defenses to such claims. We have also have extensive experience in negotiating software license agreements and have developed strategies to protect associations when installations do not go well or the software doesn’t live up to its billings. Of course, we have reviewed and revised any number of other contracts, from real estate leases to affinity agreements.

Corporate Governance

We advise our association clients on a full range of governance matters, including the drafting of governing documents (articles, bylaws and policies); fiduciary duties and conflicts of interest; D&O coverage; confidentiality obligations; elections of officers and directors; codes of ethics and related investigations and enforcement proceedings; membership qualifications; compensation policies; and relationships with local or regional chapters, including advising associations with respect to affiliation and other agreements with subordinate entities.

Drafting and Review of Bylaws

For new associations, one important task is to prepare the organization’s Constitution, operating bylaws or other governing regulations. This is an art (more than a science) meriting careful attention to competing interests and detail. Among other things, association rules need to provide sufficient notice of expectations to members without attempting to anticipate every potential scenario that may arise. Having said that, the rules need to be forward-thinking enough to apply for years into the future without the need for constant revisions. They need to match the member’s interests without compromising the legal position of the association itself, or its staff. The rules need to be clear about their origin, their purpose and their impact, if any, on non-members. The rules also need to comply with any applicable laws and, for tax exempt associations, clearly advance the functions to which the tax exemption is tied. These and other considerations make drafting the Constitution and bylaws an important challenge for any association.

For established associations, years often pass without meaningful review of governing constitutional or bylaw provisions. As daily practices of the association inevitably evolve, frequently the applicable bylaws do not. What follows is a dangerous discrepancy between the practical operations of an association and its written procedures. While all parties may appear to accept the difference between policy and practice in functional times, the departures become problematic when disputes arise. Rather than correcting dated bylaws after-the-fact, the far better practice is to update governing provisions contemporaneously . . . and in ways that advance the association’s legal position. We can help balance these interests while also incorporating the drafting strategies discussed above regarding rules of a newly-formed association.

 

Election Law

We regularly advise our clients with respect to federal and state laws and regulations governing political activity, including the establishment and operation of PACs, campaign contributions, tax and election law restrictions on political activity, lobbying registration and reporting requirements, the deductibility of membership dues and the proxy tax.

 

Employee Benefits and Executive Compensation

Spencer Fane’s employee benefit group is well seasoned with respect to employee benefit programs and executive compensation issues that are unique to tax-exempt entities. Our employee benefit attorneys provide a wide range of planning, drafting, and consulting services and help tax-exempt employers with the design and establishment of compensation agreements for their executives, including tax-deferred vehicles and other innovative programs.

 

Employment Law

Our labor and employment attorneys advise the firm’s association clients on all aspects of employment law, including: ongoing or as-needed counseling and consulting; reviewing or drafting HR policies, handbooks, and forms; preparing employment-related contracts (e.g., releases, reimbursement, employment, severance, compensation, non-compete, arbitration, etc.); training; providing guidance on complying with employment laws; auditing HR practices; conducting internal investigations; and preparing responses to charges filed with government agencies like the EEOC, DOL, OFCCP, and others. The employment litigation group at Spencer Fane offers decades of experience in all kinds of litigation – from single plaintiff and multi-plaintiff cases to collective and class actions to arbitrations. We have expertise in litigating issues surrounding all aspects of the employment relationship and in connection with all areas of state and federal law including the ADA, ADEA, FMLA, Title VII, §1981, employment contracts, public policy retaliation, workers’ compensation retaliation, and more.

Formation and Creation of Legal Entities

Trade and professional associations are unique organizational forms and demand specialized legal knowledge which the attorneys at Spencer Fane possess. Our attorneys are familiar with the intricacies and nuances involved in the formation and creation of professional and trade associations. We know the questions to ask and will work diligently to arrive at a structure that meets the members’ goals and objectives.

 

Governance Disputes

Hopefully, disputes about how an association governs itself are few and far between. However, such disputes arise in various contexts and our attorneys are equipped to provide counsel when these difficult situations arise. These disputes may take the form of bylaw or legislative errors, concerns about an association’s jurisdiction or authority, strained relations between and among members, strained relations between the membership and the association, controversial policy positions or other matters impacting an association’s ability to carry out its mission. These issues often require a careful balancing of legal, procedural, political and publicity considerations. They also can threaten the existence, or at least the integrity, of many associations if not handled appropriately. Unintended consequences are also a concern in this area and our Association Law attorneys can help you brainstorm possible scenarios in an effort to avoid embarrassing or damaging fallout.

 

Litigation Prevention and Litigation

It’s almost always better for an association to prevent a lawsuit than to defend one. We know this. Therefore, in addition to services outlined above regarding rule drafting and member discipline, our attorneys also help associations identify potential areas of exposure and then identify ways to reduce risk in those problem areas. We can summarize recommendations and present them to association executives, governance bodies, staff members or the membership itself as appropriate and as directed. Recommendations can normally be protected by the attorney-client privilege, allowing our attorneys to provide candid and helpful proposals for consideration. Oftentimes, these preventative measures save organizations from costly and embarrassing litigation over errors that can be easily avoided.

Even a deliberate litigation prevention plan cannot prevent all mistakes or preempt all legal claims by members, support staff or third parties. To provide quality services to its members, an association employs staff members, contracts for products and services, owns or leases property, hosts events, conducts meetings, creates and retains records and otherwise serves a prominent role in the community or industry. Each of an association’s many functions may create the risk of liability – or at least the risk of litigation. In those instances, an association needs counsel to navigate the complex waters of litigation and our attorneys are prepared to represent associations’ interests in state and federal courts around the country. As some litigation costs may be covered by insurance, we also work with insurers to provide a defense to covered claims. If necessary, our Association Law attorneys have immediate access to attorneys in other disciplines of this full-service law firm, together with a nationwide network of quality lawyers.

 

Member Discipline

One reason that individuals or entities join an association is to assure that all members play by the same rules and that none gains a competitive advantage over others. Another reason is that members of an association share a common interest in protecting the integrity of the underlying product, industry or property that draws them together. Therefore, one reasonable expectation of every member is that the association will investigate and, if appropriate, discipline members who deviate from agreed-upon rules or standards. This can be a complicated, time-consuming, thankless responsibility, fraught with opportunities to create legal exposure. Our attorneys are well-versed in issues that arise in the context of member discipline and we can help prevent exposure for your association or minimize the risk of external interference if a discipline proceeding is already underway. There are many preventative and remedial strategies to employ and we welcome the challenge of creating a record that is difficult for a third-party to disturb.

 

Subsidiaries, Affiliations and Combinations

We regularly advise our clients with the creation and management of for-profit and nonprofit subsidiaries, whether for tax (to avoid or reduce UBIT or to preserve the association’s tax exemption), liability or other reasons. We have represented our association clients with a number of acquisitions and mergers of other trade associations as well as for-profit entities. Given our extensive experience with are uniquely qualified to advise our clients with respect to strategic alliances and joint ventures and with affinity and sponsorship arrangements so as to maximize the benefits to our clients.

 

Tax Matters

Associations that enjoy tax exempt status obvious have a great interest in preserving that status. Without an understanding of the applicable tax regulations or the specific basis for a tax exemption, however, an association may inadvertently take steps that compromise its standing for tax purposes. Perhaps more than any other area, an ounce of prevention in the preservation of tax exempt status can be critical to the financial stability of an association. Our attorneys can help your association move as you desire without jeopardizing your relationship with the Internal Revenue Service.