Legal issues surrounding private club membership encompasses a variety of topics, from creating and applying bylaws and the membership admission process to membership discipline, statutory interventions and dispute resolution procedures. One of the most frequently asked questions NCA receives about membership law deals with the issue of soliciting new members. The following is an excerpt from The Legal Reference Guide for Private Clubs, a new publication from NCA that was written by attorneys specializing in private club issues.
Admission of Members
The rigor with which a club’s admission process is developed, nurtured and applied articulates the quality of the club and its members’ intentions. Unlike business or professional organizations that may be legally required to be open to all vocationally qualified individuals, or groups with public service objectives that solicit open membership support, most private clubs view their admission process in the same light as an invitation to a private social party.
The admissions process is the lifeblood and backbone of a private club’s goal to attract and retain quality members. This process involves interviewing and screening of potential members in a very careful and thoughtful manner. It is a very positive and useful process. If done properly, the admissions process not only screens potential members, but it also provides the club with an opportunity to acquaint these individuals with the history, the traditions and the social ambiance and distinctive characteristics of the club.
However, the admissions process also, by its very nature, has certain embedded risks. The process, to be successful, will look into the personal characteristics of the candidate and the candidate’s social and business and professional background and often that of the candidate’s spouse and family. It is important to remember that the denial of membership privileges is often as much of the process as is the granting of those privileges.
The first step in developing an admission policy is to create a plan that establishes the club as “truly private.” The U.S. Supreme Court has indicated that this means a club must follow a “plan or purpose of exclusiveness.”
Soliciting New Members
New members should only be solicited and sponsored by existing members. In order to protect its private status, a private club should not utilize the public media, public access websites, ZIP code mail drops, or similar direct marketing methods of soliciting memberships. Publicly advertising for members will make it difficult to reject any person who “applies.”
Clubs should avoid the terms “applicant” and “application.” While there is nothing incriminating or deceptive in these terms, they may be used to create legal standing of the candidate to sue for admission. Any suggestion that a person can “apply” for membership should be avoided. The terms “prospects,” “candidates” or “nominees” are suggested when referring to prospective new members. Documents should be referred to as “nomination forms” or “proposals.” These terms more accurately convey that the admission process is discretionary and that no one may claim or assume membership until accepted by the club.
Indeed, the essence of a sophisticated admission system is that it operates from the inside out. After potential candidates are considered, based on a decision system peculiar to that club, an invitation may be extended. The invitation to join a private club should be extended from within the club membership, i.e., by the membership committee or a club officer and not by a club employee.
The club may choose not to respond to unsolicited inquiries about membership. Any response should advise the inquirer that membership in the club is by invitation only. Some private clubs refer unsolicited inquiries to the membership committee to investigate and determine whether the person is a genuine and suitable membership prospect.
Additional information about the membership admission process—and array of legal challenges ranging from operational matters and human resource issues to governance and liability challenges can be found in The Legal Reference Guide for Private Clubs.