“Can the Board Hire one of its Members, and Lie about It?”

Question: A friend was terminated as Executive Director of a non-profit organization after 25 years of service. The reason given by the Board of Directors was “lack of funding.” However, in a local newspaper interview, a Board Member said, “We are hoping to fill the Executive Director position very soon.” Also, it is circulating that this same Board Member is taking the job, himself. Another Board member, disturbed by this, told my friend. Besides unfair, is this illegal? I thought I read somewhere that a position eliminated due to budget cuts could not be filled for a full fiscal year.

Loretta, Carmichael, CA

Answer: Two thoughts immediately come to mind: first, did your friend have an employment contract? Since you didn’t mention one, I presume that he or she did not. If there was an employment contract, that would govern the situation. As you probably know, without an employment contract, your friend would be what we call an “at will” employee, capable of being terminated at any time, and for any “permissible” reason. Don’t forget about that word “permissible”; we will come back to it.

Second, are you 100% certain that the Board Member who told your friend that the other Board Member was taking his/her job, was absolutely, positively correct? If you are not so certain, I caution you and your friend to be very careful about what you tell others about this situation. If it is not true that the Board Member is taking his/her job, you could be unnecessarily hurting someone’s reputation by passing on untrue rumors, and could even be sued for it.

Now, assuming (1) your friend had no employment contract, and (2) you are certain of the truth of the report of the Board Member being hired, let’s proceed. Without an employment contract the Board can terminate your friend’s employment for any “permissible” reason. I see no reason to believe that hiring a Board Member is impermissible in the law; in fact, it’s even permissible in the law to fire someone in order to hire someone else you love, even an incompetent son or daughter. I believe that it is unfair, especially after 25 years of service, but permissible under the law. That is, I don’t think they’ve broken any laws.

Incidentally, I know of no law anywhere that requires a job opening due to financial reasons must be left open a full fiscal year. I’ve never heard of such a law, although one might exist.

But let’s now talk about “creative negotiation.” The Board may have violated the organization’s Code of Ethics, or its policies concerning Integrity, or even its Conflict of Interest rules. Most organizations have such internal rules, regulations, policies and Codes of Ethics. Ask your friend to review these carefully. It could be his or her “way out” of this problem. If the Board is violating its own rules, and it is brought to the Board’s attention, at an open meeting, or in writing, that might just get it to reconsider its actions.

And what of the organization’s members, contributors, or supporters . . . don’t they have some say in the way the organization runs itself? Surely after 25 years your friend has friends, supporters, loyal followers, or those who appreciate him or her, and even perhaps some major contributors? If the Board is “pulling one over” on them – which is what one Board Member apparently already believes – they might be appealed to as well. If the Board doesn’t believe it is doing something “wrong,” then why is it not being open, honest and forthright about it? The old saying “The best proof of a crime is the existence of a cover up” may be applicable here.

Hope should never be lost. Every person should “stand up” if he or she thinks “things ain’t right,” and that is what seems to be the case here. At a very minimum, your friend deserves better. I really hope he or she will “negotiate” to a fairer result. And I really hope this is helpful.

Best, Al Sklover

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