Members of The American Legion Department of California hold their caps to their hearts during a meeting opening. (Photo: Jared Morgan)
Comrades, since the recent cancellation of the national convention of The American Legion, many posts are left wondering how to proceed, particularly in light of the following statement:
“[T]he National Executive Committee recommends that departments retain their current member of the NEC if they so desire until the post-Convention meeting of the NEC at the Phoenix, Arizona, National Convention on September 2, 2021… and all American Legion departments follow a similar course of action, to-wit: (1) cancel their 2020 conventions and elections; and (2) maintain the status quo of their officers until next year.”
I have now done the research and will explain why it will be difficult if not impossible for our Department, and posts to keep leadership in place without an election. On its face, it would seem very easy for our Department corporation or our posts’ corporations to follow along with the national organization’s plan, however, that is not necessarily the case in California.
Our corporations code has several provisions that address the terms of directors. Keep in mind, directors are those individuals that are either elected or appointed as part of the executive committee in our Department and posts. For California public benefit corporations, California Corporations Code Section 5220(a) speaks to the terms of directors and, in essence, provides they can have a term of not longer than four years, as fixed in the bylaws.
In the absence of any provision in the articles or bylaws, the term shall be one year. Finally, an amendment of the articles or the bylaws may not extend the term of a director beyond that for which they were elected, and any bylaws provision increasing the terms of directors may not be adopted without approval of the members. Section 7220 of the same code addresses non profit mutual benefit corporations and that provision mirrors section 5220.
What this means is you must look to your bylaws to determine if it is possible to extend the terms. Unfortunately, I think most posts, districts and even our Department do not have the ability to extend directors for a term longer than they were elected. For example, Article IX, Section 22 of our current bylaws provide that the National Executive Committeeman (NEC) shall be elected at convention for a term of two (2) years.
Under the current bylaws, our current NEC, who will have reached his two-year term in June and cannot continue to serve in this role without violating both the state law and our current department bylaws. Furthermore, under 5220 we cannot pass a bylaw extending this current term.
Another example using the Department bylaws can be found in Article IX, Section 20. The Department commander, Department vice-commanders, and sergeant-at-arms all shall be elected at the annual Department convention and shall hold office until the close of the following Department convention. Here it would seem those officers can hold office until the next convention, thus one could argue they can all stay in place. The problem is that Article IX, Section 26 provides that no member of the Department Executive Committee (DEC) shall be elected to the same office for two consecutive terms.
This bylaw places a one-year cap on all members of the DEC except the district commanders, who still must be elected to a second one-year term. Depending on how your post bylaws are written, your post may be in the same position as the Department, which would mean staying in place without an election by the membership cannot be done without violating the state law and the bylaws.
Examining the sample post bylaws available on the Legion Resources Page under Article V, Section 3. a) “All Post officers shall be selected for a term of one year at a regular meeting in May and shall be impressively installed, preferably by a ritual team, in accordance with the prevailing National Manual of Ceremonies, prior to the first day of September of that year.”
Therefore, if your post has adopted this provision in the sample bylaws you are required to hold an election of the officers. Posts that have not adopted the sample bylaws may have a similar provision, therefore your judge advocate should review your bylaws to determine if by staying in place without an election you will run afoul of the law.
I have provided a copy of California Corp. Code section 5220 below for your review if needed. I recognize these are difficult times and we are looking for a way to move forward. I will reiterate that you must always act in a manner that is in the best interest of your corporation. We all must fulfill our duty of loyalty to the corporation which requires us to follow the law and our bylaws.
Corp C § 5220.. (a)Except as provided in subdivision (d), (e), or (f), directors shall be elected for terms of not longer than four years, as fixed in the articles or bylaws. However, the terms of directors of a corporation without members may be up to six years. In the absence of any provision in the articles or bylaws, the term shall be one year. The articles or bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups of one or more directors. The terms of office of the several groups and the number of directors in each group need not be uniform. An amendment of the articles or bylaws may not extend the term of a director beyond that for which the director was elected, and any bylaw provision increasing the terms of directors may not be adopted without approval of the members (Section 5034).
(b)Unless otherwise provided in the articles or bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified, unless the director has been removed from office.
(c)The articles or bylaws may provide for the election of one or more directors by the members of any class voting as a class.
(d)For the purposes of this subdivision, “designator” means one or more designators. Notwithstanding subdivisions (a) to (c), inclusive, all or any portion of the directors authorized in the articles or bylaws of a corporation may hold office by virtue of designation or selection by a specified designator as provided by the articles or bylaws rather than by election. Those directors shall continue in office for the term prescribed by the governing article or bylaw provision, or, if there is no term prescribed, until the governing article or bylaw provision is duly amended or repealed, except as provided in subdivision (e) of Section 5222. A bylaw provision authorized by this subdivision may be adopted, amended, or repealed only by approval of the members (Section 5034) except as provided in subdivision (d) of Section 5150. Unless otherwise provided in the articles or bylaws, the entitlement to designate or select a director or directors shall cease if any of the following circumstances exist:
(1) The specified designator of that director or directors has died or ceased to exist.
(2) If the entitlement of the specified designator of that director or directors to designate is in the capacity of an officer, trustee, or other status and the office, trust, or status has ceased to exist.
(e)If a corporation has not issued memberships and (1) all the directors resign, die, or become incompetent, or (2) a corporation’s initial directors have not been named in the articles and all incorporators resign, die, or become incompetent before the election of the initial directors, the superior court of any county may appoint directors of the corporation upon application by any party in interest.
(f)If authorized in the articles or bylaws of a corporation, all or any portion of the directors may hold office ex officio by virtue of occupying a specified position within the corporation or outside the corporation. The term of office of an ex officio director shall coincide with that director’s respective term of office in the specified position entitling him or her to serve on the board of directors. Upon an ex officio director’s resignation or removal from that position, or resignation or removal from the board for any reason, the term of office as a director of the corporation shall immediately cease. At that time, the successor in office shall become an ex officio director of the corporation, occupying the place of the former director.
[Amended by Stats. 2018, Ch. 322, Sec. 2. (AB 2557) Effective January 1, 2019.]
Author: Autrey James
Autrey James is 2021-22 Department of California commander.
