# The Attorney General ofTexas
December 29, 1978
JOHN L. HILL Attorney General
Honorable John Wilson Ooinion No.H- 1317 Chairman House Committee onHealth &Welfare State Capitol Austin, Texas 78711 Re: Whether an administrative rule of the TexaLS

Department of Human Resources prohibiting departmental personnel from being licensed as real estate brokers or salesmen is a valid employment rule. Dear Representative Wilson: Youhave requested an opinion as to whether the Department of Human Resources csn enforce a regulation which prohibits department employees from acquiring real estate licenses. The purpose of this policy is to avoid potential conflicts of interest involving clients of the department. See V.T.C.S., art. 6252-9b, § 8. The issue presented is whether the rule% overbroad inits total prohibition of an outside real estate occupation because there is a possibility of a conflict of interest. The department informs us it would be difficult to police real estate transactions with the department’s clients without a total ban which isrelatively easily enforced by checking the records of the Texas Real Estate Commission. Youadvise that eligibility for client benefits under department guidelines depends upon other income resources available to the client, and clients are often advised by the department that real property held by them must be converted to cash if they are to remain eligible for benefits. The rule in question was adopted to prevent department employees having access to client files from improperly using the information, and, further, to avoid any appearance of impropriety should a department employee innocently deal with department clients in pursuing areal estate business. One’s right to work and earn an income, whether characterized as a liberty or aproperty interest, isa valuable right which should not be curtailed without substantial state interest. See Bishop v. Wood, 426 U.S. 341(1976); Board of Regents v. Roth, 408 U.S. 5640972); Perry v. Sindermann, 408 U.S. 593 (l972); Schware v. Board of Bar Examiners, 353 U.S. 232 (1957). In that webelieve the deoartment rule to be overbroad. it isunauthorized bv the rule making authority of the Department of Human Resources. V.T.C.S., arts. 695c, SS3,33;6953-1,g10. Cf. Cleveland Board ofEducation v. LaFleur, 414 U.S.632(1974)(pregnancy 1eaTrules overbroad).

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Webelieve the line of authority which has upheld regulations which prohibit firemen and policemen from holding second jobs is clearly distinguishable. These employees are often on call at all hours, Their physical and mental condition which is vital to the performance of their duties should not be overtaxed by holding outside employment. See Lombardino v. Firemen’s and Policemen’s Civil Service Comm’n, 310S.W.2d 651(Tex. ciii: ADD. - San Antonio 1958, writ ref’d n.r.e.) (citv detective dismissed for enaaeirie in o&de occuoation of debt-collection): Trelfa vi Vfilaee of Centre Island. 389N.F.g.22 22 (S. Ct. Appl Div. 1976) (prohibition of outside employment by police valid); Cox v. McNamara, 493 P.2d 54 (Ore. Ct. App. 1972)(prohibition upheld as to police), cert. den., 469 U.S. g82 (1972);Annot.. 88 A.L.R.2d 1235(1963);but see City of Crowley Firemen. rohtbttmu outstde emolovment was City of Crowley, 2&O So.2d 897 (La. 1973)(ordinance E

- arbitrary and violated constitutional right ofdue process). - . Although few courts have addressed the issue, webelieve that the prohibition which is the basis ofyour inquiry is arbitrary unless there is a clear public purpose as has been articulated in the cases concerning firemen and policemen. In Natilson v. Hodson, 47 N.E.2d 442 (N.Y. Ct. App. 1943)a social investigator for the Department of Welfare was discharged for violating the rule against outside employment by doing accounting work for a fee after his normal work day. There wasno allegation that the outside work interfered with the employee’s performance with the department and the court ordered him reinstated. Similarly, in Putkowski v. Carey, 52N.Y.S.2d 42(Sup. Ct. 19441,the court held that a rule which forbade an employee of the Department of Sanitation from working a second job at aplant making war materials exceeded the power of the department. To the extent that the rule of the Texas Department of Human Resources precludes any employee’s possession ofa real estate license where no conflict of interest isinvolved and the employee’s performance is in no way impaired, the rule lacks statutory authority and is invalid. Cf. Attorney General Opinion H-R62 (1978). Of course, more precisely drawn regulatio=hich relate narrowly to the interest ofthe department could bevalidly drawn. See Attorney General Opinion H-1223 (1978);Letter Advisory No.62(1973). - SUMMARY The Department of Human Resources may not prohibit all employees from being licensed as a real estate broker or agent ,where no conflict of interest is involved and the employee’s performance isinnoway impaired.

Attorney General ofTexas

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APPROVED:

bLw DAVID M.KENDALL, First Assistant 

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