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Thursday, July 15, 2010

Certification Programs: A Legal Issues Checklist

Establishing or operating a certification program is rarely a simple matter.  Certification programs frequently provide compelling membership value, and enviable revenue streams.  On the other hand, numerous issues arise with a certification program.  What are the issues?   The following is a list of some of the most crucial legal issues to address with any nonprofit certification program:

Certification of Products, Persons or Processes – It is critical for a certifying entity to be clear about what is being certified.  Are individuals being certified?  If so, the risks may be higher.  Are products being certified as suitable for a specific purpose?  Or is a process being certified?  It is important to be very clear about what is being certified, and what that certification means to interested parties, including the certified person or entity, and consumers of the products or services involved.

Inherent Risks of Certification Programs - Credentialing programs always involve risk.  The more successful a credentialing program, the more it will generate risk.  Nonmembers will want the credential.  Regulators may be threatened by it.  Plaintiff's lawyers, looking for deep pockets and insured parties, will see credentialing parties as potential defendants.  The credentialing program may end up being the defacto standard for the industry or profession.  Reasonable reliance on the certification as being fully appropriate could result in liability based on the certification or standard being negligently established.  There is also risk of liability if the certifying entity grants a certification to individuals/entities that the certifier knew or should have known should not have been certified.  The implications of these risks are that the certification standards MUST be properly promulgated and applied.

Due Process – Criteria for certification should be competently established; criteria should provide a fair and reasonable threshold of competence; and denial or revocation of certification must allow for appeal, including the right to a hearing and opportunity to be heard.

Defamation – Care should be exercised to avoid harming persons/companies that did not qualify for the credential, or that have not taken or passed any examinations.  However, lists of certified persons/entities may be published.

Grandfathering Issues – Care should be exercised when considering grandfathering certification, as actions may make a strong appearance of anti-competitive behavior, whether intended or not.  Intentional or purposeful grandfathering of some competitors within a particular market in order to provide them with an important or substantial advantage not available to other competitors is almost always (depending on the specific facts) going to be illegal.

ADA compliance – Certifying organizations should consider the effect of certification of disabled persons.  Obviously, care should be taken not to discriminate against disabled persons. 

Antitrust – As noted above, certification programs almost always raise serious antitrust issues.  Care should be taken to prevent the certification from having an anti-competitive effect, such as making the certification unavailable to nonmembers when doing so results in a significant economic disadvantage to the nonmembers.

Fairness Issues – Certifications should, to the greatest extent possible, be free of  bias, discrimination, subjectivity, partiality or inconsistency in terms of the certification, and how certification requirements are applied.

Professional Advice – Entities establishing certification programs are strongly advised to seek professional guidance in establishing the certification program, including qualified legal counsel.


  1. It's been really great going through your blog post, very well informed and described. Great to read and know more about such kind of stuff.

  2. See Daniel Montes vs American Hospital Association, USDC Northern District of Texas - Dallas Division. Pending.