Many associations link certification to membership as a way to drive revenue and engagement, but is this practice legally sound?
The short answer is no. Tying membership to certification violates antitrust laws, exposing organizations to costly litigation and potential loss of nonprofit status.
In this article, we’ll break down the legal risks, debunk common myths, and explore alternative strategies that allow associations to grow without crossing legal boundaries. If your organization offers credentialing programs, understanding these legal nuances is crucial to minimizing risk and maintaining compliance.
Why you cannot require membership for certification in professional associations
On their website, Pillsbury Winthrop Shaw Pittman LLP provides background and analysis of the precedent-setting case, Talone v. American Osteopathic Association. In 2017, four physicians filed a class action suit against the American Osteopathic Association (AOA) because of the requirement that all AOA board-certified doctors purchase and maintain AOA membership as a condition of maintaining their board certification.
The plaintiffs alleged this was an “unlawful tying arrangement” that violated the federal Sherman Act and state antitrust laws. Tying occurs when an organization sells one good (the tying product) on the condition that the buyer also purchases another, separate good (the tied product).
Pillsbury explains that an unlawful tying arrangement occurs when a seller exploits its control over the tying product (certification) to force the buyer to purchase a tied product (membership) that the buyer didn’t want or need or would’ve preferred to purchase elsewhere. This forcing to purchase violates the Sherman Act.
This tying arrangement was anti-competitive because it “substantially lessened competition so that other professional association membership organizations were foreclosed from competing” for AOA board-certified doctors’ business. The doctors were forced to pay dues to AOA to stay certified, which limited their ability to join other associations.
Because the case was settled in July 2018 before going to judgment, a clear court determination doesn’t yet exist. But, Pillsbury says, “the Court’s refusal to grant the AOA’s motion to dismiss and the subsequent settlement create a risk that other nonprofit organizations that link membership to maintaining credentials could face antitrust claims, which are often exceedingly costly to litigate or settle.”
In AOA’s case, the costs, including paying the plaintiff’s legal fees, exceeded $35 million. Also, if a violation of antitrust occurs, the association can lose its tax-exempt nonprofit status. No surprise then that Pillsbury encourages associations to carefully consider the risks of tying credentialing to membership.
Myths about membership requirements for certification
Many misunderstandings have emerged in discussions about this topic in association forums.
Myth: It’s okay to tie credentialing to membership if the credential is not a hiring requirement.
Reality: Does your association control what employers require? What if an employer expresses preference for job seekers with the credential? If a plaintiff can demonstrate that certification is essential to compete in the job market or is influential in hiring decisions, you could be held liable.
Myth: It’s okay to tie certification to membership if competing certifications exist in the market.
Reality: In Talone v. AOA, the plaintiffs showed that AOA exercised its “market power” in the tying product (certification) market. If your association has sufficient market power, which is difficult to define, a membership requirement could be regarded as a tying arrangement.
Myth: A membership requirement is okay if the certification program is accredited.
Reality: Because membership requirements are an unfair barrier to certification, they are not allowed by accreditation organizations, such as American National Standards Institute (ANSI), National Commission for Certifying Agencies (NCCA), Council of Engineering and Scientific Specialty Boards (CESB), and others.
Myth: It’s okay to require membership for a certificate program.
Reality: Pillsbury’s analysis doesn’t make a distinction between certificate and certification programs. Micro-credentials lie in this same gray area. Although no settlements or court actions have been made about certificate and micro-credentialing programs, the legal issue is “tying” a credentialing program to membership. If you do so, you’re exposing your association to financial and legal risk.
How to minimize credentialing program risk
If you have questions about the legality of your program requirements, seek legal counsel. Do not rely on this post, forum discussions, or another public resource for legal advice. When designing, reviewing, and updating certification programs, always consult with counsel who is familiar with association law, credentialing, and antitrust issues.
Learn more about legal issues from the Association Law Handbook. This hefty book is a “core resource” for anyone studying for the Certified Association Executive (CAE) exam.
Errors and omissions (E&O) insurance can help protect your association against the financial costs of litigation.
Identify and eliminate or reduce barriers to your credentialing programs, for example, membership, discriminatory standards, and unreasonably high fees for non-members.
Promote your credentialing programs widely, so non-members are given the opportunity to learn about and apply for them.
Alternatives to requiring membership for credentialing programs
Associations mistakenly establish membership requirements to:
- Recruit new members.
- Expand the target audience for educational programs providing continuing education unit (CEU) credits for certification renewal.
- Generate revenue.
How can you achieve these goals without exposing your association to the risk of antitrust litigation?
Non-member pricing. Establish a non-member rate for credentialing applications, exams, renewal fees, and related education programs. A standard and reasonable non-member rate is 20-30% higher than the member rate. Anything higher could attract scrutiny and challenge. Document the decision process and rationale behind pricing differences.
Learning subscription. Instead of promoting membership to credentialing prospects and participants, promote a learning subscription, but not as a requirement, of course. A subscription could provide unlimited access to online education programs or a specific number of programs.
Content marketing. Nurture your credentialing audience—those who are preparing for an exam and those who need credits to renew their credential. This audience has already invested a great deal of time and money in your association. They are “warm leads” for content marketing.
Segment them for targeted marketing campaigns promoting exam study groups, study aids, and online and in-person education programs. But don’t overwhelm them with promotions. Nurture this audience with useful emails about news, trends, regulations, practices, and topics of interest.
By delivering content marketing campaigns that keep your audience close, your association will be the first place they turn to when looking for education, information, and community.
At Apti, we partner strategically with leading professional associations, empowering them to elevate member experiences through education. Together, we create engaging learning programs that position their organizations as the definitive source of expertise in their respective fields.
If you’re ready to enhance your association’s educational offerings and member engagement, let’s talk. Send us an email at contact@hiapti.com.