Lawyer's comments on proposed Pacifica bylaws
The bylaws draft - clean version [ html - 106kb ] [ MS Word version - 235kb ]
The bylaws draft - red-lined version [ html - 180kb ] [ MS Word version - 293kb ]
January 17, 2003
Sent Via Electronic Mail
INTERIM BOARD OF DIRECTORS
Re: Initial Review of Proposed Amended BylawsDear Directors:
As you are aware, we have been asked to review, analyze and comment on the current draft of the proposed amended Bylaws for the Pacifica Foundation. We have been advised that in this process we were permitted to make those revisions to the Bylaws that we deemed appropriate. This has been a lofty task, made much more difficult by the very limited time frame we were provided to perform our analysis. We feel it imperative to note that, in our opinion, this short time frame (approximately 2 weeks) has inhibited our ability to do as thorough of an analysis of the "key" bylaws as we would have liked or which may be fully warranted. Therefore, our comments are focused on those major issues that we have been able to quickly identify and analyze.
To facilitate our efforts in this regard, we made a presumption that the version of the Bylaws we received, which were labeled "key," was both the most recent draft of the Bylaws and also represented a general consensus among the interim Board and the local area boards as to the Bylaws' terms. To gain an understanding as to the motivations and concerns resulting in the proposed Bylaw provisions, we also spoke, and/or exchanged emails, with Leslie Cagan, Rob Robinson and Carol Spooner of the interim Board to obtain background information. Attached you will find two versions of the proposed Bylaws revised by our office for your review and comment. The first version "Bylaws KWF 011703 RED" has been red-lined, or marked-up, to show the exact changes between the "key" version of the bylaws and our revised draft. As there has been some shifting of various articles and sections you may find this version difficult at times to read. The second version "Bylaws KWF 011703 CLEAN" shows our revised draft of the bylaws without the markup comparison. We believe the latter version is much easier to read and recommend that you use it as your primary source for reviewing our comments, while utilizing the red-lined version for reference. While we will refrain from itemizing here each of the revisions we have made, we will briefly describe our method for approaching Pacifica's bylaws and the general nature of our comments and revisions. This description is not, and should not be construed as a full statement of all the revisions set forth in our draft and should not be used as a substitute for reviewing our revised draft in full.
Our Method for Analysis
The Nature of Our Revisions and Comments
Other changes we have recommended add or revise a provision in the "key" draft to conform with California law. Additions/revisions of this nature include, but are not limited to:
The majority of the revisions we have recommended seek to add or clarify a right or process expressed in the "key" draft or to remove ambiguity. Revisions of this nature include, but are not limited to, clarification of:
A Note About Standing Committees.
A Note About the Officers.
A Note About Associate Stations and Affiliate Stations.
A Note About Single Transferable Voting.
A Note About Proxies
A Note About Transitioning the Board and the LSBs
The Suggested Substantive Changes
Reduction and Uniformity in the Sizes of the National Board of Directors and the Local
Station Boards of Delegates.
Pursuant to the "key" draft of the Bylaws, each local station board would be allowed to establish a local station board in a size of each of their choosing ranging from 16 to 36 delegates. In our experience, a board of these proportions is not only unnecessary, but frequently meets with greater than usual challenges in managing board activity and obtaining consensus among its delegates, resulting sometimes in significant delays in board action. In addition, accommodating such a board (considering costs associated with travel, facilities for meetings and telephone conferences, providing requisite notices, and reimbursements) can make having a large board quite expensive. We strongly recommend a smaller board of delegates with a fixed number of delegates, which board size would then be adopted by all of Pacifica's radio stations. In our view, all local station boards should be uniformed in basic structure so that there is a continuity in Pacifica's three-tier (member-delegate-director) system regardless of the local radio station area with which one is affiliated.
Specifically, we recommend a local station board of 13 delegates (assuming that no one is superstitious). Each board would still be able to maintain Pacifica's apparent desire for a ratio of 3 Listener-Sponsor delegates for every Staff delegate for a total of 12 delegates. Further, since we advise against boards of even numbers as they tend to increase the likelihood of a tie vote and a possible stalemate by the board on any given issue, we would recommend that one additional delegate be added who is elected by the listener-sponsor members and the staff members voting together. We are open to suggestions for how the delegate will be elected. We are also in need of recommendations for how to replace an open Delegate seat that is vacated mid-term, preferably (for expense purposes) without the requirement of another election.
The same concerns regarding the expense and practical functioning of large boards also applies to the size of the national board, which board we recommend be reduced from 20 station-elected directors and 3 at-large directors to 15 station-elected directors (3 from each station - 1 Staff Director and 2 Listener-Sponsor Directors) and 2 at-large directors for a total of seventeen directors. Again, we believe the costs of making arrangements for a large board, including traveling, telephone conferences, notices, etc. combined with the efficiency of a smaller board make having a smaller board more practical and cost-effective. Again, we strongly believe that Pacifica, especially since it is a non-profit, should work to minimize the financial/administrative burden of its system of membership and government. Instead, we believe that any savings that could be generated by a reduction in size could be better spent, and frankly should be spent, on Pacifica's programming and other projects. We believe that many of the measures we have recommended, including the reduction in size of the local station boards and the national board, will help to facilitate a cost-effective government.
Removal of Specific Diversity Quotas or Set-Asides
There has long existed a tension between affirmative action initiatives and the Fourteenth Amendment of the Constitution and its guarantee of equal treatment to all citizens. The United States Supreme Court noted this tension when it addressed the issue of racial quotas in 1978 in the case of Bakke v. University of California at Davis1. In said case, the Supreme Court found UC-Davis' racial admissions quotas illegal and declared racial quotas unconstitutional. Later in 1989 in Richmond v. Croson2 , the Supreme Court further tightened affirmative-action guidelines by mandating that strict tests for the legality of quotas be implemented (in this case for the awarding of city government contracts to minority- owned businesses.) The Supreme Court required that any affirmative action program be narrowly tailored to remedy the effects of prior discrimination. This finding has been interpreted to permit narrowly tailored racial quotas only where there has been demonstrated a prior pattern of discrimination by the entity seeking to institute said quotas.
Clearly, the battle over the use of affirmative action measures and the promotion of diversity continues to rage at both the legislative level (i.e. 2000's proposition 209) and at the judicial level (see Grutter v. Bollinger3 - a case the Supreme Court has recently agreed to consider regarding quota systems in use by the University of Michigan admissions department). Although the majority of pivotal cases have involved admissions to educational institutions or employment with for-profit companies, this does not completely preclude the application of findings such as these to non-profits, such as Pacifica, especially where the proposed quotas could be interpreted as disqualifying eligible individuals from positions of control and authority in Pacifica solely on the basis of race or gender, which disqualification action may also be viewed as contrary to public policy.
In addition to the growing federal prohibition against what appears to be all but the most narrowly tailored quotas or set asides, we believe that California's Unruh Civil Rights Act4 provides an additional restriction against racial or gender based quotas. The Unruh Civil Rights Act specifically provides that:
"[a]ll persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, or disability are entitled to the full and equal accommodations, advantages, facilities, privileges or services in all business establishments of every kind whatsoever."Although the Unruh Civil Rights Act has been found only to apply to "business establishments," California courts have already held that merely being a nonprofit organization does not, in of itself, make an entity exempt from the application of this law. Due the very public nature of Pacifica's organization, it is our opinion that it is likely to be considered a business establishment for purposes of the Unruh Act and, therefore, subject to the equal treatment restrictions of this state law.
Although we have not had sufficient time to undertake an in-depth review of federal and state law regarding the impact of affirmative action quotas on the business practices of a non-profit, our preliminary findings suggest that, in addition to being potentially violative of federal and state laws and viewed as contrary to public policy, such a quota may also jeopardize a non-profit, such as Pacifica's, eligibility for, and/or continued receipt of, government grants and funding. Pacifica should be mindful that as recipient of federal and state grants and funds, it is also likely that it has been, or will be, asked to certify as part of an application for any such grant that it complies with local, state and/or federal regulations regarding equal opportunity participation in its organization. For example, the Corporation for Public Broadcasting, as part of its funding requirements, requires all broadcasters to certify that they comply with all federal equal employment opportunity regulations. Racial or gendered-based quotas set forth in Pacifica's bylaws, a key charter document which is available to the public, even if unrelated to employment, could be interpreted to contradict any certification that Pacifica may make with regards to its commitment or compliance with equal opportunity laws and regulations. At minimum, the existence of said quotas could create the appearance of impropriety or misconduct by Pacifica raising the possibility of an undesired audit or investigation by an authority which has oversight over it.
In addition, we are not, at this time, sure of the impact that the inclusion of such quotas would have on your current tax exemption status. Although neither the IRS' application for recognition of exemption nor Section 501(c) (3) of the Internal Revenue Code specifically address the issue of equal opportunity as a criteria for exemption status, without further research we are unable to definitively advise that racial or gender-based quotas will jeopardize, or otherwise negatively impact the maintenance of, Pacifica's tax exemption recognition if said quotas are found to violate state or federal law. However, we also cannot advise that such quotas would have no impact on Pacifica's tax exemption status. We do know that the U.S Supreme Court in Bob Jones University v. U.S.6 indicated, in its decision to uphold the IRS' determination to revoke the University's 501 (c)(3) status, that both the courts and the IRS have acknowledged that it is the intent that entitlement to tax exemption be based in part on said organization's meeting of certain standards of charity and restraint from purposes that are illegal or contrary to established public policy. We strongly recommend that further research in this area take place, if contrary to our recommendations, the Board decides to further pursue the institution of the proposed racial and gender quotas.
Based on the above, we believe that setting affirmative racial and gender quotas in Pacifica's bylaws potentially exposes it to an unnecessary risk of litigation and/or further scrutiny by governing authorities. As has already been discussed among you, diversity quotas could also expose Pacifica to a lawsuit by an individual claiming that Pacifica's quotas discriminated against him. None of the above, however, means that Pacifica is prohibited from adopting and enforcing policies that promote and encourage the full participation of people of color and women. In our research of this issue, we have reviewed several bylaws, including those for non-profit organizations that have as part of their mission the furtherance of an agenda in favor of people of color. None of the bylaws we reviewed provided for quotas or set-asides. Instead they rely on mission statements indicating their desire to promote diversity. Others establish diversity committees to monitor diversity and promote greater participation by woman and people of color. Indeed, we have suggested the following policy statement for inclusion in Pacifica's Bylaws, which statement, in our opinion, clearly sets forth Pacifica's mission to embrace and actively promote diversity, without specific references to quotas:
The Foundation is enhanced by the full and effective involvement of all Members regardless of race, color, sex, age, religion, national origin, disability or sexual orientation. The Foundation strongly encourages all of its radio stations, staff, Members, Delegates, Directors and Officers to promote diversity among its Members, volunteers, and employees as well as among its Delegates and the Directors to the fullest extent permissible, subject to applicable federal and state laws and regulations.
We have also in the Bylaws retained the ability of a delegate candidate, at his or her discretion, to indicate his/her racial/ethnic heritage and gender which may then be taken into consideration by a member entitled to vote for said candidate. To encourage additional female or minority candidates, local station boards could consider the creation of a diversity or campaign committee, which could have as one of its responsibilities the solicitation of female and minority candidates for consideration by the members as delegates.
Board Review and Comment Again, the attached documents reflect our initial comments and recommendations to the "key" bylaws based on what we understand to be Pacifica's desired structure for management and power and what we consider to be sound, reasonable, cost-effective measures. However, to proceed, we require your input with regards to the proposed revisions, especially considering that some of them reflect more of a policy or business decision rather than a strictly legal determination.
Based on the very short time frame we are working under, we require your collective comments and instructions by no later than Wednesday, January 22, 2003. As this is a work in progress, we reserve the right to continue to make minor revisions to the document pending your January 23rd response. In the absence of your direction, we will default to our recommendations in our preparation of the final version of the bylaws, which we are currently proposing to submit to you for review by Tuesday, January 28, 2003.
Based on my limited dialogue with some of the Directors, I have little doubt that at least one of our proposed revisions and several of our deletions will be controversial. Indeed, it is my understanding that the entire process to date has required substantial effort and compromise by the entire Board. Let me emphasize, however, that the purpose of bylaws is to establish the procedures for governing and operating the Foundation's activities and conduct. Bylaws serve primarily three functions:
By their nature, bylaws are procedural, not substantive. Consequently, I would counsel the Board that careful effort should be given to prevent the current debate from wandering beyond the specific purpose of the assignment. I commend all of you for the efforts made to date and look forward to working with the Board in formulating a final product.
Sincerely Kevin W. Finck
1) 438 U.S. 265 (1975).
2) 488 U.S. 469 (1989).
3) 188 F. 3d 394 (6th Cir. 1999)
4) California Civil Code § 51 et seq.
5) See for examples: Hart v. Cult Awareness Network, 16 Cal. Rptr. 2d 705 (1993); O'Connor v. Village Green Owners Assn , 33 Cal. 3d 790 (1983); Harris v. Mothers Against Drunk Driving, 46 Cal. Rptr. 2d. 833 (1995)
6) 461 U.S. 574 (1983)
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