Reversal of Board of Director's Decision

[eb7417]

Here is my question. I belong to a Volunteer Fire Company that operates under a Constitution and By Laws. I am the Parliamentarian and need some help. IN April of this year, a motion was made to employ members of the local Sheriff's Department to guard our property and grounds overnight during our upcoming carnival. This motion was second and passed by the 11 members of the board present 9 for 2 against. At the next regular meeting the company membership was notified that our own members would NOT be doing the guard duty this, that the board had authorized the carnival comittee to employ local Sheriff's deputies at the same rate with the same responsibilities as the prior year. The carnival committee contacted the deputy who would coordinate the schedule for us and deputies began to fill the schedule. The committee chairman signed secondary employment forms for the deputies involved and who would be working security. These forms were required by the Sheriff's Department. Almost two months later, with the carnival only 1 month away now, a large group of members, many of whom had guarded the grounds in previous years and were upset at the board's decision, packed a membership meeting when myself and a large number of board memebrs were absent. They made a motion to overturn the board's decision and allow the members to do the guarding of the grounds. The President informed them that this was an invalid motion. The motion proceeded anyway and passed. We are having a special emergency board meeting this Sunday to address the issue.

My question is, can the company overturn the board's decision based on the facts above? Below I have copy and pasted a couple sections of our by laws under duties of the board of directors. It is my opinion that the motion was invalid and that the board has jurisdiction over the issue of the guarding of the grounds. I would love to hear other's opinions in order to back up my position at the board meeting Sunday...thank you.

"The Board of Directors shall be vested with the power to act in the name of the Company between regular meetings on all matters pertaining to the welfare of the Company, provided same are not in conflict with the Constitution and By-Laws......They shall have full charge and supervision of all properties and equipment owned and operated by the Company. They shall have the privilege of authorizing all expenditures for the maintenance and operation of said property and equipment without the approval of, but cognizant by the membership....The Board of Directors shall have full supervision of all paid personnel and shall draw up a schedule of duties for said personnel. They shall be assisted in this function by the compensation committee, which shall consist of the chairman of the board, President, Chief, EMS Captain and two members at large, selected by the permanent members of the committee. This schedule of duties may be subject to review and/or change by the Board of Directors at any time."

[George Mervosh]

See if this helps

[Rev Ed]

The link George provided isyour answer. If the By-laws stated that the Board would act on behalf of the members period, then there would be an argument that the membership cannot change the Board's decision. However, your By-laws only allow the Board to act on the membership's behalf between membership meetings which allows the membership to overrule the Board.

[eb7417]

The link George provided isyour answer. If the By-laws stated that the Board would act on behalf of the members period, then there would be an argument that the membership cannot change the Board's decision. However, your By-laws only allow the Board to act on the membership's behalf between membership meetings which allows the membership to overrule the Board.

What about the fact that action was taken and people were hired based on the Boards decision....and that this motion to overturn it was not made until almost 2 months after the board's decision was given to the membership?

[eb7417]

The link George provided isyour answer. If the By-laws stated that the Board would act on behalf of the members period, then there would be an argument that the membership cannot change the Board's decision. However, your By-laws only allow the Board to act on the membership's behalf between membership meetings which allows the membership to overrule the Board.

also, would it not appear that the by laws are clear that the Board has authority to make decisions with regards to the property and grounds? Isn't that what "full charge and supervision" means?

[George Mervosh]

also, would it not appear that the by laws are clear that the Board has authority to make decisions with regards to the property and grounds? Isn't that what "full charge and supervision" means?

"In any event, no action of the board can conflict with any action taken by the assembly of the society; and except in matters placed by the bylaws exclusively under the control of the board, the society's assembly can give the board instructions which it must carry out, and can countermand any action of the board if it is not too late (as it would be, for example, when a contract has already been made)." RONR, p. 466

We're not in a position here to determine whether or not your bylaws grant them exclusive authority, since interpreting bylaws is strictly prohibited here (and wisely so).

[eb7417]

"In any event, no action of the board can conflict with any action taken by the assembly of the society; and except in matters placed by the bylaws exclusively under the control of the board, the society's assembly can give the board instructions which it must carry out, and can countermand any action of the board if it is not too late (as it would be, for example, when a contract has already been made)." RONR, p. 466

We're not in a position here to determine whether or not your bylaws grant them exclusive authority, since interpreting bylaws is strictly prohibited here (and wisely so).

Thanks...so who makes the final interpretation at the board meeting? Is it the parliamentarian's interpretation that is the final word or is it a majority of some body that votes on interpretation?

[George Mervosh]

Thanks...so who makes the final interpretation at the board meeting? Is it the parliamentarian's interpretation that is the final word or is it a majority of some body that votes on interpretation?

No one makes it at a board meeting. The membership deals with this issue at their meeting (but it seems like they've already dealt with it, no?)

Here's the jist of what I read here:

1) The Board made a decison regarding X.

2) The Membership moved to countermand it

3) The President ruled it wasn't in order because the board had full/exclusive authority

4) The membership disagreed and did it anyway

Now I'm sure the procedure was ugly but in essence the matter is probably decided.

[eb7417]

No one makes it at a board meeting. The membership deals with this issue at their meeting (but it seems like they've already dealt with it, no?)

Here's the jist of what I read here:

1) The Board made a decison regarding X.

2) The Membership moved to countermand it

3) The President ruled it wasn't in order because the board had full/exclusive authority

4) The membership disagreed and did it anyway

Now I'm sure the procedure was ugly but in essence the matter is probably decided.

I would agree with the one caveot that a contract has been made with the deputies involved in this case. From what I am reading from the reference above, the membership cannot undo an action taken where a contract has been made in accordance with a board decision that was a legal and rightful decision.

[George Mervosh]

I would agree with the one caveot that a contract has been made with the deputies involved in this case. From what I am reading from the reference above, the membership cannot undo an action taken where a contract has been made in accordance with a board decision that was a legal and rightful decision.

That might be true in this case. No way to tell.

[tctheatc]

That might be true in this case. No way to tell.

Exactly. Your membership has spoken, and it's for that same membership to figure out what it all means. You might have to eat the contract. But the final word, as you mention above belongs to the deliberative body following proper procedure (hopefully). It DOES sound like it might've been ugly, but basically correct. And I really didn't see anything specifically about a contract in the 1st post.

[eb7417]

Exactly. Your membership has spoken, and it's for that same membership to figure out what it all means. You might have to eat the contract. But the final word, as you mention above belongs to the deliberative body following proper procedure (hopefully). It DOES sound like it might've been ugly, but basically correct. And I really didn't see anything specifically about a contract in the 1st post.

Yes, actually the deputies were told they were hired AND forms for secondary employment were signed by the deputies within a week of the board's decision, which was over 2 months ago. I did not mention that in my original post because it was not known by me, until one of you posted the reference, that a contract for services based on the original decision would play into the ability of the membership to over turn the decision or not. I guess that is what these forums are for, as, had I not come on here and asked, I would have never known that the contract we have with them now was such an integral part of this procedural process. Thanks again. I fully admit that i have so much to learn in this area, but believe, after asking on here, that the membership cannot overturn the original board decision based on the action <contractual> that was taken as a result of the board's decision.

[Gary Novosielski]

Yes, actually the deputies were told they were hired AND forms for secondary employment were signed by the deputies within a week of the board's decision, which was over 2 months ago. I did not mention that in my original post because it was not known by me, until one of you posted the reference, that a contract for services based on the original decision would play into the ability of the membership to over turn the decision or not. I guess that is what these forums are for, as, had I not come on here and asked, I would have never known that the contract we have with them now was such an integral part of this procedural process. Thanks again. I fully admit that i have so much to learn in this area, but believe, after asking on here, that the membership cannot overturn the original board decision based on the action <contractual> that was taken as a result of the board's decision.

Nobody here told you that. In fact you were informed exactly the opposite.

The membership has every right to overturn the board's decision. From what you have said, there was no contractual agreement, only application forms. And even if there were a contract, the membership has the authority to break it and suffer the consequences.

[Josh Martin]

The membership has every right to overturn the board's decision. From what you have said, there was no contractual agreement, only application forms. And even if there were a contract, the membership has the authority to break it and suffer the consequences.

Well, I think the poster has come to the right conclusion but for the wrong reasons. It seems that the action ordered in the motion has been completed - the deputies are hired. They can't be "unhired." The membership could fire them, but the original motion is a done deal and can't be rescinded. The fact that contracts are involved doesn't change things from a parliamentary perspective, but it does have legal significance.

Of course, the board doesn't have the authority to declare a motion adopted by the general membership null and void, so this leaves the society in a bit of a pickle. I think that the society needs to consult a lawyer and call a special meeting of the general membership ASAP.

[George Mervosh]

Why can't a contract be resinced?

[eb7417]

I appreciate all the opinions and understand that no one is giving any formal advice. However, to indicate that you can just rescind a contract because we "changed our minds" TWO MONTHS after the deputies were hired, scheduled, and put in vacation time in some cases to cover this job just seems ridiculous. We would clearly be open for legal recourse. A poster on here very clearly pointed out the following reference, to which I now hang my hat on as the basis for the board's decision to stand:

"...the society's assembly can give the board instructions which it must carry out, and can countermand any action of the board if it is not too late (as it would be, for example, when a contract has already been made)." RONR, p. 466

Is there anyone here that can make a coherent arguement that this isn't exactly what happened here...2 Months after the board informed the membership of the decision. And, by the way, the two months time lapse does make a big difference from a legal and contractual view. We are less than one month from the event and many actions were taken by these deputies to be able to perform the job that they were hired to do on approximately April 13th. If we get out of the mindset, for just a minute, that the membership can always do what they want; and we actually read the above reference, then I am not sure anyone has made an arguement as to how one would just ignore that section?

Thanks.

[Shmuel Gerber]

I appreciate all the opinions and understand that no one is giving any formal advice. However, to indicate that you can just rescind a contract because we "changed our minds" TWO MONTHS after the deputies were hired, scheduled, and put in vacation time in some cases to cover this job just seems ridiculous. We would clearly be open for legal recourse. A poster on here very clearly pointed out the following reference, to which I now hang my hat on as the basis for the board's decision to stand:

"...the society's assembly can give the board instructions which it must carry out, and can countermand any action of the board if it is not too late (as it would be, for example, when a contract has already been made)." RONR, p. 466

Is there anyone here that can make a coherent arguement that this isn't exactly what happened here...2 Months after the board informed the membership of the decision. And, by the way, the two months time lapse does make a big difference from a legal and contractual view. We are less than one month from the event and many actions were taken by these deputies to be able to perform the job that they were hired to do on approximately April 13th. If we get out of the mindset, for just a minute, that the membership can always do what they want; and we actually read the above reference, then I am not sure anyone has made an arguement as to how one would just ignore that section?

Thanks.

The regular posters here like to ignore the end of that sentence, because it doesn't fit well with what RONR says elsewhere. But regardless of whether we're correct on this point, the bottom line is still that you need to call a meeting of the membership to resolve this. If you're right that the membership meeting was "packed" that one time, then the board should be able to get it what it wants at the new meeting.

[tctheatc]

I appreciate all the opinions and understand that no one is giving any formal advice. However, to indicate that you can just rescind a contract because we "changed our minds" TWO MONTHS after the deputies were hired, scheduled, and put in vacation time in some cases to cover this job just seems ridiculous.

Could you please provide the quote where someone says this? I cannot find it.

[eb7417]

Could you please provide the quote where someone says this? I cannot find it.

The statement made by a member was "Why can't a contract be rescinded?" The rest of your bolded words were used by me to explain WHY you just can't say we changed our minds. I apologize if I used quotation marks incorrectly. I was not meaning to quote another member. I was merely meaning to explain that it seemed silly to wonder why we just can't say sorry, we had another vote and now you are un-hired.

[tctheatc]

The statement made by a member was "Why can't a contract be rescinded?"

Yeah, but the point is nobody has said what you're claiming they said. A question as to why or why not a contract can be rescinded is a question. It's NOT a statement that people can just change their minds capriciously, as you indicated. It wasn't even a question specifically directed to you. Why you would indicate that the tenor and tone of the responses here is that the members can just up and change their minds and void a contract is odd, because it's simply not found in this thread.

Perhaps the most fitting response you got was:

That might be true in this case. No way to tell

From George. It depends on a lot of things, such as whether a contract was signed and in effect. There's been talk of forms and scheduling, but the word contract was not used early on when you got some responses. Then it came out and you got the citation that a contract may affect the situation. How? Dunno, it depends on the details of your particular situation, and that's for your membership to sort out (most importantly, what does the cited bylaw mean as to the scope of authority the board has to make these decisions. does "properties and equipment" include hiring guards? I dunno. Your membership needs to decide)

You've got the applicable cite from RONR. You still have some issues locally to sort out. It depends on these particulars. I think THAT'S what you should be getting from the thread, IMHO. Best of luck.

[eb7417]

Yeah, but the point is nobody has said what you're claiming they said. A question as to why or why not a contract can be rescinded is a question. It's NOT a statement that people can just change their minds capriciously, as you indicated. It wasn't even a question specifically directed to you. Why you would indicate that the tenor and tone of the responses here is that the members can just up and change their minds and void a contract is odd, because it's simply not found in this thread.

Perhaps the most fitting response you got was:

From George. It depends on a lot of things, such as whether a contract was signed and in effect. There's been talk of forms and scheduling, but the word contract was not used early on when you got some responses. Then it came out and you got the citation that a contract may affect the situation. How? Dunno, it depends on the details of your particular situation, and that's for your membership to sort out (most importantly, what does the cited bylaw mean as to the scope of authority the board has to make these decisions. does "properties and equipment" include hiring guards? I dunno. Your membership needs to decide)

You've got the applicable cite from RONR. You still have some issues locally to sort out. It depends on these particulars. I think THAT'S what you should be getting from the thread, IMHO. Best of luck.

Thanks, I think you are right. Again, I apologize if I felt something was being implied that wasn't. I guess that is why I asked. I certainly appreciate the lively discussion on this topic and it certainly seems like a much more complex issue than first meets the eye. Certainly, we could now branch off into a lengthy discussion over what exactly defines a contract. I have a neighbor that had adriveway done with nothing more than a verbal agreement between himself and the driveway contractor. When a disagreement erupted the court held him liable, based on a verbal contract, for a certain extent of the amount the contractor said he owed based on a reasonable and average rate for similar services. However, the "extra" stuff the contractor was now trying to charge for was disallowed due to the absense of a written contract detailing specifics of the job. In this case, there seems to be no question by anyone at the company that an agreement to perform the work was amde following the April board meeting and that employment forms were subsequently signed. As you mentioned, the membership might not want to venture into the whole question of contract law and remedy for breach at this point.

[Gary Novosielski]

It's clear to me that the OP has already made up his mind that the board has the power to do whatever it likes, and is trying to use this forum as cover.

The fact is that ONLY the membership can resolve this situation at this point, and the board is powerless to act. It may well be true that the membership should not have adopted the resolution they did. But that doesn't change the facts. They did so. And only they can change their collective mind.

As my father was fond of saying "There's a lot of truth in what actually happens."

[J. J.]

I appreciate all the opinions and understand that no one is giving any formal advice. However, to indicate that you can just rescind a contract because we "changed our minds" TWO MONTHS after the deputies were hired, scheduled, and put in vacation time in some cases to cover this job just seems ridiculous. We would clearly be open for legal recourse. A poster on here very clearly pointed out the following reference, to which I now hang my hat on as the basis for the board's decision to stand:

"...the society's assembly can give the board instructions which it must carry out, and can countermand any action of the board if it is not too late (as it would be, for example, when a contract has already been made)." RONR, p. 466

Is there anyone here that can make a coherent arguement that this isn't exactly what happened here...2 Months after the board informed the membership of the decision. And, by the way, the two months time lapse does make a big difference from a legal and contractual view. We are less than one month from the event and many actions were taken by these deputies to be able to perform the job that they were hired to do on approximately April 13th. If we get out of the mindset, for just a minute, that the membership can always do what they want; and we actually read the above reference, then I am not sure anyone has made an arguement as to how one would just ignore that section?

Thanks.

There is no prohibition in RONR on rescinding a contract. This prohibition was removed with the 10th edition (p. XXI). While violating a contract might create civil liability, it does not violate a procedural requirement.

[Sean Hunt]

There is no prohibition in RONR on rescinding a contract. This prohibition was removed with the 10th edition (p. XXI). While violating a contract might create civil liability, it does not violate a procedural requirement.

I would argue that a contract is a legally binding agreement and a motion to violate it would be out of order since motions of an illegal nature cannot be considered.

[eb7417]

I would argue that a contract is a legally binding agreement and a motion to violate it would be out of order since motions of an illegal nature cannot be considered.

This will be the basis for my opinion tomorrow night. There seems to be a couple sets of mindsets on this particular topic. I won't profess to be able to read people's intent, but yes, absolutely, I believe the board had the right to do what they did <which no one seems to disagree with> and I believe AFTER reading all of the great discussion here, that the membership cannot undo a contract, whether verbal or written, 2 months after someone has been hired for a specific fee, for specific hours, to perform a specific job. I am sorry if some believe I am wrong to feel the membership cannot undo a verbal contract, but it is also obvious to me that others also feel the same way...and they aren't even the OP :)