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NLN Wins Latest Court Battle with Accreditation Subsidiary

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By Debra Wood, RN, contributor 

August 10, 2013 - When an internal disagreement between two organizations committed to excellence in nursing education escalated to the courts, the Hon. Anil Singh of the New York Supreme Court upheld the position of the parent organization, the National League for Nursing (NLN). 

Beverly Malone reports NLN is establishing a new accreditation program.
Beverly Malone, PhD, RN, FAAN, reports NLN is establishing a new accreditation program.

“Our colleagues at the former NLNAC (National League for Nursing Accrediting Commission) now ACEN (Accreditation Commission for Education in Nursing), wanted to be totally separated, not be a subsidiary anymore,” said Beverly Malone, PhD, RN, FAAN, chief executive officer of NLN in New York. 

On that point the two organizations agree. Additionally, both organizations want to ensure students and nursing programs are not jeopardized. 

ACEN maintains that to keep its designation as a Title IV gatekeeper, which allows the schools it accredits to participate in the Federal Student Aid Program, it must be completely separate and independent from the NLN. 

“We want to continue to be a Title IV gatekeeper, because we feel that is part of our mission,” said Sharon J. Tanner, EdD, MSN, RN, chief executive officer of ACEN in Atlanta. “In order to do that, we have to be separate and independent of the trade association. There is a disagreement about whether or not that should happen.”

Sharon Tanner wants ACEN to be separate and independent from NLN.
Sharon J. Tanner, EdD, MSN, RN, wants ACEN to be separate and independent from NLN.

Accreditation entails an external review and aims to ensure a nursing program will prepare graduates in accordance with best practices so they are ready to care for patients. ACEN accredits about 1,300 nursing programs with about 200 more pending, and has 600 volunteer evaluators, Tanner said. 

The U.S. Department of Education (DOE) did not return a request for information on its position. Malone said the department requires a firewall but does not dictate how to structure an accrediting body’s organization. 

Court documents show the DOE regulations provide that members of the accrediting agency cannot be elected or selected by the board or chief executive of any related trade or membership association; one member of the board must be a representative of the public; the agency must have implemented conflict of interest guidelines; dues to the accrediting agency are paid separately from dues paid to the affiliated organization; and the agency must determine its own budget without review of another entity.”

“They want to make sure the members who are accredited do not have the ability to influence the accrediting body,” Malone said. “Our colleagues took it a few steps down the road.”

The history 

The NLN has been accrediting nursing programs since the 1950s. 

NLN established the NLNAC in 1997, within NLN. Then in 2001, it legally incorporated NLNAC as a separate subsidiary to be located in New York, to meet the separate and independent requirement. The bylaws left NLN in control of nonaccreditation and general corporate matters. The two entered into contracts for a trademark licensing agreement and a sublease of office space, which are now in dispute.  

NLNAC moved to Atlanta in 2009, which violated the agreement, according to NLN, and in 2011, NLNAC filed a lawsuit in Georgia to sever all ties with NLN and nullify all contracts, which is still pending.

NLN filed a lawsuit against NLNAC, seeking damages for the breach of contract, and the following year sought to dissolve NLNAC. The court denied the dissolution and found that it could jeopardize accredited programs and leave nursing schools and students in a “precarious position.”

Earlier this year, NLNAC changed its name to the Accreditation Commission for Education in Nursing. It also attempted to amend its bylaws and articles of incorporation and remove NLN as the principal member of NLNAC. 

Judge Singh in the New York Supreme Court determined that NLNAC did not follow statutory requirements of New York Not-for-Profit Corporation Law and that NLN was not given an opportunity to vote on the amendments, even though NLN’s consent was required to amend the certificate of incorporation and the bylaws. 

In light of the win in court, NLN’s lawyers have proposed a settlement document, asking for $2 million in rent, real estate taxes and for the trademark agreement, monies that have been held in escrow. 

Court documents indicate that NLN is willing to work with NLNAC to amend the bylaws to ensure compliance with Department of Education regulations. 

Looking ahead 

ACEN plans to appeal the New York court ruling. In a letter to colleagues, it pledged to continue site visits and other activities. It remains a U.S. Department of Education-recognized accrediting agency for all six types of nursing programs, including practical and diploma programs. 

“We want to serve as many nursing programs and nursing students that we can,” Tanner said. 

NLN meanwhile has launched plans for a new accreditation department within the organization, but with a firewall, and is working with an analyst within the Department of Education. It hopes to begin conducting site visits in September 2014. 

“Our members deserve a full Department of Education-recognized accrediting service, one where there is a commitment to the well-being of the schools, and we want to provide that,” “There is no way I can assure we can provide that with the present status of our colleagues at NLNAC/ACEN. I have no relationship with the program, even though they are still part of us.”

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