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Association
Business Activities
Organization
Structure Common Organizational
Forms: The most common legal forms of employee organizations
are:
Unincorporated
Association. Any group of persons with a common interest. Formed by bylaws, electing officers and holding
meetings. Mutual Benefit Non-profit
Corporation. Formed by filing Articles of Incorporation, establishing bylaws and voting in a board of
directors.
Less Common Organizational
Forms: Sometimes other legal entities are created, primarily for tax-avoidance and special
purposes:
Non-profit Labor Organization. Sometimes used for sub-organizations being operated by a larger labor organization. Cannot make political
contributions. Charitable Non-profit Organizations. Usually a separate board or trust established to provide tax deductible donations. Usually associated with an association or corporation. Seldom used to operate a labor
union.
Should You
Incorporate? Incorporation provides certain tax benefits and liability protection. Can create greater tax liability; extensive accounting and annual filing requirements. Best organizational form to use if controlling charitable trusts, PAC's, or other entities. Provides protection from extensive fund-raising activities which may create liability for the
group. Unincorporated association can make contracts, indemnify board members and own subsidiary organizations. Officers have greater liability for association's activities and subsidiary
organizations. Charitable trusts are usually incorporated, but can be owned/controlled by unincorporated association. However, most groups prefer to incorporate the primary association to provide greater control of trust yet protect corporation from
lawsuit. It is much more costly to run a corporation. There must be a practical as well as a legal need to incorporate; otherwise it may not be worth
it. Association
Business Activities Bylaws:
Every employee organization should have a set of bylaws. Bylaws for corporations are different then bylaws for unincorporated associations. Bylaws do not have to cover every aspect of association activities, but should be comprehensive enough to settle disputes. At a minimum, they must cover the leadership structure, elections of officers or board members, bookkeeping practices, membership classifications and dues structures, membership privileges and
meetings. Careful thought should be invested in bylaws to avoid having to change them frequently and to prevent amendments for purely political reasons. However, they should be current, reflecting an organization's common business practices. Members can sue an association for violation of its
bylaws. Meetings:
Every association should hold regular meetings, even if no one attends or there is very little business to conduct. Use an agenda to avoid marathon meetings. Announce at the outset whether new business will be entertained from the floor. Your bylaws should address meetings and how they will be conducted. Accounting:
It is important that your association's bookkeeping methods be understandable and above board. It is not necessary to utilize the services of a CPA unless you are a corporation, or if you operate a trust or other subsidiary organization. Establish a budget and attempt to stick to it. Do not operate month-to-month without income and spending goals. Publish your budget at the beginning of the fiscal year and distribute regular financial statements to members (monthly or quarterly). Deficit spending is
illegal. Newsletters:
Even the simplest, single-page flyer is better than no newsletter at all. Establish a newsletter/publication committee and appoint a chairman or editor. Regular mailings or distribution to members is an important communication tool and probably the best method to distribute the latest laws affecting your members. On the other hand, do not create a multi-page newspaper and fill it with stupid cartoons and junk articles. It is relatively easy to obtain permission to print copyrighted material from magazines and other associations' newspapers. Demand that your association's attorneys supply regular articles. Business
Address:
Even if you don't have an office or other formal place to conduct business, establish a post office box and a telephone number with an answering machine. Record the phone numbers and pagers for your association President, chapter representatives, association attorney and your Legal Defense Fund. Include the telephone/pager number of someone who is available 24-hours a day to respond to officer-involved shootings and other critical incidents. You never want your members to be unrepresented during critical
incidents. Fund
Raisers:
Fund raising activities are an important source of income for many associations. Unfortunately, boiler rooms are a necessary evil. However, they can be done professionally and contracts can be written to permit the association to supervise boiler room activities. Use only reputable production companies and check their references. You would be surprised how many production companies are sued by associations for putting on an embarrassing event or failing to pay as promised (or at all). Officer
Meetings:
Officers/board members/directors should meet regularly, at least once per month, even if informally. Post and announce such meetings in advance so members may attend (which they seldom do) and to avoid the appearance of
secrecy. Short agendas can be filled with guest speakers (you might be surprised who would be willing to talk to a group of police officers) or with
training. Unless your association represents management, department managers should be excluded from directors meetings. Publicity:
Assign someone to be the media relations officer, if that job does not belong to the president. Contact newspaper and cable reporters in your area, and introduce yourself. Make it a point to contact them regularly, even if you have nothing to report. You want reporters to call you first when an important event occurs in your area involving your department, rather than getting the
facts from the department head. Most reporters simply do not know who to call on matters involving your
association. Always support your members who are in trouble and have drawn media attention. Do this even if things look bad for your member. Your job is to side with the member, not the department. The media wants to hear from the association's president and your members want to hear that you are on their side, even if the employee is
history. Contributions
To The Association:
Be careful here. Unless you are a charitable trust organization, contributions are not tax deductible. Many contributions are unlawful if they are designated by the donor to be spent on candidates for elective offices or for elected
officials. Donations to the Association for its overall benefit, such as fund raising activities or donations of property, are usually acceptable, so long as you keep good records. Consult your association's attorneys on the latest laws regarding
donations. Employees:
Although you should treat them as you would members, you do not have to provide them with the same benefits. Do not draft employee handbooks or employment contracts unless you are willing to live with them and can defend a termination in court. Most association employees are
at will and do not acquire rights to their jobs (mainly because they are not public employees). Consult with your association's attorneys before making promises to
employees. It is usually a better idea to negotiate release time for the president rather than hiring a general manager, unless you have a large association. A secretary to answer phones and do paperwork is a much better investment and more productive than assigning office hours to officers or directors. Embezzlement is a frequent problem for unsupervised office
staff. Office
Insurance:
Premise liability is the minimum requirement. Comprehensive coverage including Workers' Compensation insurance is a must if you have any employees, even if they only work part-time.
Do not verbally indemnify officers or agents unless you have a treasury to cover damages from lawsuits. Purchase indemnification insurance or bonding if this is a concern. Police organizations seldom get sued for the acts of their officers or directors, but insurance is a must if you operate a charitable trust or health insurance trust (and such insurance may be required by
law.) Contracts:
Unincorporated associations can enter into binding contracts. For reasons that are not clear, associations seldom ask their attorneys to review contracts before they are signed; attorneys usually see them for the first time when the contract is breached. Don't make this mistake. Fax a copy of the contract, even a relatively simple one, to your attorney for review before
signing. Membership
Benefits:
Insist on controlling the provision of products and services to members through your association so that you can cancel them if they don't work out. Cellular phone companies, paging networks, insurance brokers, auto dealerships and the like want exclusive relationships with your members. If your members get ripped off, the association can be sued. Include in any contracts the right to terminate the vendors' services on an association-wide basis. Recently, in the telecommunication wars (especially involving cell phone companies) associations have been sued when they wanted to switch companies, associations have been held liable for member's unpaid bills, and associations have been sued when the service provider unilaterally discontinued service. These services can be good things for your association and its members when done
correctly. Organizational
Activities:
Have fun, but purchase insurance for the event. Memorandum of Understanding/Collective
Bargaining:
This subject is covered in a separate seminar. However, some basics are worth repeating here. Insist that copies of grievances filed by your members must be submitted to the association by the member or by the department. Create a computerized file of all grievances and their outcomes for future
reference. To not let the department violate your MOU. It makes no sense to battle at the bargaining table for specific terms and then let the department ignore them. If it is not important enough to fight over, then it doesn't need to be in your MOU. The
primary reason for the existence of your association is to negotiate a contract for your members. Labor
Relations:
Get to know the members of your city council, board of supervisors or other governing body. Negotiating a successful contract is the result of a good relationship with these people. Schedule meetings or luncheon appointments on a regular basis. Ask them how your association can help them and tell them how they can help you and your group. Even if you dislike the politicians who run your city, at least gain their respect. Contacting elected officials for the first time at election time or when your association is at impasse does no good. The most highly paid agencies are those whose association leaders make it a point to communicate and work with members of their governing
bodies. Personnel
Rules:
Insist that any changes to these are negotiated with your association before they are implemented. Threaten to sue if necessary. The same goes for general orders, administrative regulations and labor-related ordinances. Loans to
Members:
Some associations have provisions in their bylaws to grant loans to members in dire financial need. This is fine, but don't plan on being paid
back. Political
Activism:
Candidates for elective office appreciate your endorsement. But don't expect much in return if all you hand them is a piece of paper announcing your endorsement. Money is fine, but be careful of the rules regarding political contributions to or from labor organizations. What candidates really want are manpower commitments, donations of property and office space, and publicity. An association that supplies the time of its members (campaign workers and sidewalk pounders) will be rewarded when it is time to renegotiate the contract and their endorsement will be coveted. Helping to turn out the vote is worth far more to a political candidate then receiving a
check. Association
Records:
One of the first tasks of a new association president should be to gather up all association records and designate a storage location. Contact former association officers and find out where the records are located. If necessary, appoint a member as the historian to call all past officers to locate old association documents. The following records should be kept indefinitely: Membership roster, financial records, bylaw revisions, association meeting minutes, and negotiation session
notes. A book of board resolutions should be maintained, indexed by subject. Dues:
Dues should be high enough to pay for all association operations and activities, and depositing money into savings every month. Dues structures, including PORAC, range from $25 to $50 per member per month. Do not rely on fund-raising activities to back-fill your budget; that money should be set aside for special projects or funding a war
chest. Attorneys:
Even the smallest association needs legal advice from time-to-time. Attorneys trained in labor relations and negotiations usually serve as the spokesperson during negotiations; employers
are more frequently using attorneys during contract talks, so should the
association. Monthly or quarterly retainers usually save the association money over the long run. Having a law firm on retainer provides telephone access and availability to write
letters and handle the legal issues that come up day to day. Training:
Establish a training budget for association officers, leaders, field representatives, peer officers and grievance committee members. PORAC offers regional single and multi-day seminars. Your association's law firm should be actively involved in providing training in such important areas as internal affairs investigations, officer-involved shootings, negotiations and political action committees. |
