I am representing myself and several current and past members, past association founding members, past association presidents, past association Directors, past honor recipients, and past conference hosts. I have been a paying member of this 501(c)(3) association for over twenty years, and I have been attempting for nearly one year to get access to our new Executive Director and National Office Manager contracts.
I have recently been sent a letter by the association's attorney essentially telling me to cease and desist or else the association "will pursue all legal remedies available against" me, that the contracts are "confidential, sensitive, personal and proprietary to the Association." I did say in my last email that I thought perhaps the entire association membership, the Better Business Bureau, and the IRS might be interested in some of these practices. The attorney said I am harassing the association. The attorney also said because these "threats" were made, that it therefore demonstrates that the "demands are not made in good faith or for a proper purpose." We are concerned about how our association is being operated and would like to know what specifically the contract spells out in the way of expectations, duties, salary, incentives, bonuses, raises, etc.
Is this just a lawyer bluff trying to scare us off? What should we do at this point?
You are correct that members have the right to inspect the records of a nonprofit corporation in your state (assuming the association is actually a corporation), but you may have made it more difficult for yourself by saying that you represent a lot of people who may not be current members (past members, past honor recipients, past conference hosts), and by making threats about taking the information to the BBB. Nevertheless, I assume that an attorney representing the corporation and wanting to comply with the statute could work out an agreement with you on the range of those who have access to the information and the use to which the information can be put.
A lot of lawyers like to bluster and it often works. But you do appear to have a legal right to the information. Your statute provides a procedure by which to formally request (demand) access to the records and spell out your proper corporate purpose. If the corporation refuses, the statute provides a procedure to go to court to gain access. If you win, the court has authority to order the corporation to pay your costs, including reasonable attorneys’ fees. A year is a long time to wait, particularly for information like salary amounts that have to be publicly reported for all the world to see on a Form 990 or 990-EZ tax return. If you feel strongly about the issue, call the lawyer’s bluff — and start campaigning for new directors to change the position.
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