Source: https://www.mass.gov/advisory/06-01-consultants-and-attorneys-who-provide-services-to-government-agencies-may-be-public
Timestamp: 2018-02-22 16:56:00
Document Index: 518312264

Matched Legal Cases: ['§ 4', '§ 4', '§ 17', '§ 11', '§ 4', '§ 7', '§ 5', '§ 17', '§ 20', '§ 20', '§ 20', '§ 7', '§ 14', '§ 17', '§ 4', '§ 20', '§ 20', '§ 20', '§ 20', '§ 1', '§ 17', '§ 20', '§ 7', '§ 20', '§ 7', '§ 7', '§ 20', '§ 14', '§ 14', '§ 14', '§ 1', '§ 1', '§ 1']

06-01: Consultants and Attorneys Who Provide Services to Government Agencies May Be Public Employees Subject to the Conflict of Interest Law | Mass.gov
Advisory 06-01: Consultants and Attorneys Who Provide Services to Government Agencies May Be Public Employees Subject to the Conflict of Interest Law
2006 State Ethics Commission Rulings
How the conflict of interest law, G.L. c. 268A, §§ 4, 17 and 11 apply to private consultants and attorneys who provide government services.
II. Applying the Public Employee Definitions (2)
III. Consequences of Public Employee Status for Consultants and Attorneys
This advisory explains how the conflict of interest law, General Laws Chapter 268A, applies to consultants and attorneys who personally perform services for state, county and municipal government.
The definition of a public employee in the conflict of interest law is very broad. It includes:
a person performing services for or holding an office, position, employment or membership in a [state, county, municipal] agency, whether by election, appointment, contract of hire or engagement, whether serving with or without compensation, on a full, regular, part-time, intermittent, or consultant basis.(1)
Public employee status is most easily attributed where an individual (e.g., attorney or consultant) personally undertakes to perform and does personally perform services for a public agency. In such situations, more often than not, an individual is a public employee for the purposes of the conflict of interest law.
Example: An individual who is a full-time financial consultant to a state agency is a state employee.
Example: A private attorney who has been individually hired to serve as trial counsel for a municipality in litigation is a municipal employee.
Determining the public employee status of an employee or member of a corporation or other business organization, including a law firm, which contracts or agrees with a government agency to perform services is more complicated. Employees of a corporation or business organization do not become public employees simply because the corporation or business organization has a contract with a public entity. Nor is the corporation or business organization, e.g., a law firm, itself a municipal employee. In some instances when a private business contracts with a government agency, however, an employee, officer or partner of the business who actually performs services for the government agency will be a public employee for purposes of the conflict of interest laws. The Commission has developed and applies a multi-factor analysis for determining whether a particular individual performing the services is a public employee.
The factors considered by the Commission include, but are not limited to the following:
Whether the individual's services are expressly or impliedly contracted for. For example, if a contract requires the services of a particular individual in a corporation rather than leaving assignment of staff up to the corporation, the individual providing the services may be a public employee.
The type and size of the corporation. While an officer or employee of a small, closely held corporation is more likely to be deemed a public employee, even an employee of a large, publicly held corporation may be a public employee if the other factors here suggest that outcome.
The degree of specialized knowledge or expertise required of the service. The more specialized the services an individual provides to the public entity, the more it appears that the individual providing the services is a public employee.
The extent to which the individual personally performs services under the contract or controls and directs the terms of the contract or the services provided. Greater personal responsibility for services and greater control over the terms of the contract suggest that the individual may be deemed a public employee.
The extent to which the person has performed similar services to the public entity in the past. Repeated service by the same individual suggests that the individual is a public employee.
No one factor is dispositive; rather the Commission will balance all of the factors based on the totality of the circumstances.
Example: A real estate consultant will provide real estate redevelopment services under his corporation's contract with a city. The consultant personally had performed essentially the same services for the city for the prior three years; he plans to personally provide up to 90% of the services under the contract; the provided services are professional and highly technical; and the corporation is small and 100% owned by the consultant and his wife. Even though the contract does not require his individual services, he is a municipal employee.
Example: An employee of a large corporation (of which he is a less than 1% shareholder) serves as the administrator of a county hospital pursuant to a management agreement between the county and the corporation. The county approved her initial and continuing appointment; she previously had served in the administrator position as a regular county employee; the county contemplates her continuing to serve as administrator; and her services are specialized and significant. She is a county employee for G. L. c. 268A purposes.
Example: University employees who provide services under the university's consulting contract with a municipal school committee are not, as a result, municipal employees under the following circumstances. Under the contract the university is to conduct hearings, set compensation for school employees, recruit, hire, appoint, evaluate, promote, assign, fire, suspend and dismiss school employees and consultants, including the school superintendent, and conduct collective bargaining with unions serving the university. Thus, the contract requires specialized knowledge regarding personnel management in a school setting, and one factor of the multi-factor analysis is met. Otherwise, the multi-factor analysis is not satisfied. The contract does not identify any individual employee of the university who must provide services. Instead, the university may choose its staff as it sees fit to perform the work required by the contract. Consequently, while performing duties under the contract, university employees are not required to comply with the conflict of interest law. Under the multi-factor analysis, any individual university employee does not become a municipal employee by performing services under the contract.
Example: A contract between a large corporation and the department of public works authorizes the DPW to approve some of the corporation's supervisory personnel before they can work on the contract. The employees whom the DPW approves are state employees. Other employees who work on the contract, and who are assigned by the corporation and do not need to be approved by the DPW, are not state employees because the contract does not specify or otherwise "target" any particular corporation employee.
Due to the broad definition of public employee in G.L. c. 268A and the application of the multi-factor analysis, otherwise private attorneys who personally provide legal services to a public entity are public employees under the conflict of interest law, and subject to its restrictions. (3)
Example: A medium-sized law firm provides legal services to a state agency. The law firm is hired because of the experience and specialization of one of its attorneys, who provides most of the hours billed by her firm to the state agency. This particular attorney is a state employee subject to the restrictions of the conflict of interest law.
Note that a consultant may be able to work on more than one project and/or for more than one agency, if the consultant has a single contract which by its scope allows such an arrangement.
Example: A town hires a special counsel to represent it in litigation against the planning board. The town may, by amending the special counsel's contract, also hire the same counsel to represent it on other unrelated litigation involving the recreation department.
For further advice on determining if a consultant or attorney is a public employee and on applying the factors listed above, please contact the Ethics commission.
A consultant or attorney who becomes a public employee by personally providing professional services to a public entity is subject to all of the restrictions of the conflict of interest law concerning bribes, gifts and gratuities, self-dealing and nepotism, the standards of conduct and post-employment. A partner of such a public employee also may be subject to restrictions. (4) For additional information about these restrictions, see the Commission's website at www.mass.gov/ethics.
In terms of the impact on the private practice of a consultant or attorney, the most important consequences of public employee status come through the application of §§ 4 and 7 (state), §§ 17 and 20 (municipal) and §§ 11 and 14 (county). (5) These sections restrict the consultant's or attorney's ability both to represent ("act as agent or attorney for") and be compensated by anyone other than the public entity in any matter involving the public entity (§§ 4, 17 and 11) (6) and to have a financial interest in more than one contract at a time with the public entity (§§ 7, 20 and 14). In addition, the consultant's partners are restricted from acting as agent or attorney for anyone other than the public entity in any matter involving the public entity in which he participates or has participated or has official responsibility as an employee of the public entity under §§ 5(d) (state), 12(d) (county) and 18(d) (municipal). These restrictions do not apply to the consultant's employees or associates with whom he is not in partnership.
A. "Regular" Public Employees
1. Working for private parties
For a so-called "regular" public employee, i.e., one who does not qualify as a "special" public employee as discussed below, these restrictions greatly curtail the extent to which an individual can work or be compensated as a consultant or attorney outside of his or her employment by a public entity. For example, a regular municipal employee is subject to § 17 restrictions on providing services to private parties with regard to any particular matter in which the same city or town - not just his own department -- is a party or has a direct and substantial interest. (7)
Example: An attorney in part-time private practice who is compensated for more than 800 hours during the preceding 365 days for services to the town is a regular municipal employee and thus could not represent a private client before the town planning board (or any other town board) or in litigation in which the town was a party. The attorney cannot be compensated by the private client for any legal services even if someone else made the presentation to a town board.
Sections 4 and 11 likewise restrict state and county employees, respectively, from doing work for, or receiving pay from, private parties.
2. Working for multiple agencies
The purpose of § 20 is to prevent public employees from using their position to obtain contractual benefits from the government, and to avoid the public perception that they have an "inside track" on such opportunities. Under § 20, a "regular" town employee may not have a contract with the same town agency by which he is employed. He generally would have to comply with the many restrictions of § 20(b) to maintain an interest in a contract with a town agency other than the one by which he is employed. (8) To contract to privately provide part-time (500 or fewer hours per year) services to another town agency, for example, a regular town employee would have to comply with disclosure requirements and obtain approval from the board of selectmen.
Example: An engineer who is hired by the school committee to assist in renovations of the high school can contract with the town library to prepare drawings only if she files a statement disclosing her interest in the contract with the town clerk, the contract requires less than 500 hours of work per year, the director of the library files a statement with the town clerk certifying that no employee of the library is available to perform those services as part of their regular duties, and the board of selectmen approve.
Similar restrictions apply to "regular" state employees under § 7. (9) The restrictions of § 14 applicable to "regular" county employees are substantially different. (10)
B. "Special" Public Employees
The conflict of interest law seeks to balance the need of government to attract qualified public employees with the need to protect the integrity of government. In order to achieve that balance, the law places less strenuous restrictions on employees who work less than full-time for public entities and who, thus, may be designated "special" public employees. Special public employees include employees who hold positions for which no compensation is provided and employees whom the voting body for the public entity has classified as special employees because their positions allow them to hold other jobs during normal working hours or because they work a limited number of hours for the public entity. (11) In order to be a "special" employee, state and county employees must meet one of these criteria; municipal employees must, in addition, be designated as "special" municipal employees by selectmen, the city council or aldermen. In a municipality with a population of more than 10,000, selectmen may not be special municipal employees; if the population is 10,000 or fewer, selectmen are automatically special municipal employees.
The restrictions imposed by c. 268A on private professional activity by public employees are greatly reduced where the public employee has "special [public] employee" status. For example, with regard to providing private services, a special municipal employee is subject to § 17 restrictions only with regard to any particular matter in which he participated at any time as a municipal employee, or which is, or within one year has been, a subject of his official responsibility, (12) or which is pending in his own agency.
Example: An architect who is a member of a city historical commission, and who in that capacity is a special municipal employee, may not accept compensation from a private client who brings a matter before the commission, may not appear before the commission on behalf of the client, and may not prepare or sign documents that the client will submit to the commission. The architect, however, may appear before or submit plans to the zoning board of appeals or planning board on a project not subject to commission review.
Example: A private attorney who is a member of a school committee, and is a special municipal employee, cannot represent clients before the school committee but may represent clients before the planning board, building inspector and the board of health.
If he serves as a public employee on sixty days or fewer (13) during a 365-day period, a special employee even can act as an agent or attorney for, and receive compensation from, a private party in a matter pending before his own agency, provided that he has not participated in the matter and it is not, and in the previous year was not, a subject of his official responsibility.
Example: A call firefighter works for a town fire department for fewer than 60 days in a 365-day period, and is designated as a special municipal employee. As a professional engineer, he could design fire protection systems for the town and submit plans with regard to a particular matter requiring a permit from the town fire department so long as he does not participate in or have official responsibility for approving or signing off on the permit as a call firefighter.
Example: A part-time assistant town counsel who is a "special" (and an attorney in private practice), who has responsibility only for the specific matters assigned to her, and who provides legal services to the town on sixty or fewer days within a 365-day period, could represent private clients in matters involving the town that were not assigned to her and in which she did not participate as assistant town counsel even where the matter was being handled by other attorneys in the town counsel's office.
The restrictions of §§ 4 and 11 are similarly relaxed for special state employees and special county employees respectively.
2. Working for the same agency or multiple agencies
Special employee status also makes it significantly easier for public employees to have more than one contract with different agencies within the same public entity. Thus, simply by filing a disclosure with the town clerk under § 20(c), a special municipal employee may contract to provide professional services to a municipal agency other than his own if he does not participate in its activities or have official responsibility for them.
Example: A private consultant who is a member of the conservation commission, and is a special municipal employee, can provide consulting services to other municipal boards if she does not participate in their activities or have official responsibility for them as a commission member, following submission of a disclosure of her financial interest in the contract pursuant to § 20(c).
Example: A member of the housing authority who is a special municipal employee and has a private engineering consulting practice could provide contract services to the conservation commission without violating § 20 by simply filing a disclosure with the town clerk.
A special municipal employee may even have a financial interest in a contract with his own agency if he discloses his interest in the contract and also obtains approval from the selectmen, city council or board of aldermen under § 20(d).
Example: A physician who consults with the city's board of health on an HIV/AIDS project, and whose position has been classified as that of a special municipal employee by the city council, may also consult with a medical research group who has contracted with the board of health to study the West Nile virus, provided that he files a statement with the city clerk disclosing his interest in the contract and the city council approves.
Section 7(d) and (e) set forth analogous procedures for special state employees, with disclosure instead to the Commission and approval instead by the governor. For special county employees, however, there is no provision permitting employment with their own county agency. Section 14(c) only permits a special county employee to contract with a contracting agency if he does not participate in or have official responsibility for its activities and if he files a disclosure with the Commission and receives the approval of the county commissioners.
In summary, special public employee status makes it possible for public employees who are professionals to privately practice their profession within their employing public entity's jurisdiction, even with respect to matters involving or of interest to their employing public entity, with certain reasonable and limited restrictions (as described above). This includes attorneys in private practice who are public employees only by virtue of their personally providing services to a public entity. By imposing on special public employees only these limited restrictions, G. L. c. 268A protects the public interest in avoiding conflicts of interest without unduly discouraging public service by privately practicing professionals.
1/ G.L. c. 268A, §§ 1(d), 1(g) and 1(q).
2/ Specific statutes related to individual municipalities and local municipal ordinances also may govern who is a public employee. Consult your city solicitor or town counsel for additional information.
3/ Attorneys should note that the Massachusetts Rules of Professional Conduct may prohibit representation of a particular client because of adverse or competing interests, or because of a perceived conflict of interest. The conflict of interest law, which focuses on the conduct of government employees, and so includes attorneys who are government employees, imposes additional requirements. Even if they work in a non-legal profession as public employees, attorneys must comply with the conflict of interest laws in accepting work from other government agencies or private legal work outside their public employment.
4/ The term "partner" is not specifically defined in G.L. c. 268A. However, the Commission has construed the term in several opinions. See EC-COI-87-34; 87-29; 86-03; 85-62; 84-78. The term "partner" is not restricted to those who enter formal partnership agreements. Thus, where business ties are indeterminate, the Commission has held that a partner is any person who joins with another, formally or informally, in a common business venture, and that the substance of the relationship is what matters, not merely the terms the parties use to describe the relationship.11/ EC-COI-84-78. For example, the Commission concluded in EC-COI-93-24, that members of a professional corporation are not "partners" for purposes of the conflict of interest statute.
5/ Additional exemptions may also be available. For example, a consultant who is a municipal employee may also apply on behalf of a private client for a building, electrical, wiring, plumbing, gas fitting or septic system permit unless he is employed by or provides services to the permit-granting agency or an agency that regulates the activities of the permit-granting agency. Consult your city solicitor, town counsel or the State Ethics Commission for additional information.
6/ Note that a consultant who, as a public employee, is prohibited from acting as an agent on behalf of a private client before a government board may, behind the scenes, provide advice, provided he is uncompensated. In contrast, an attorney may not provide pro bono counsel even behind the scenes because he would still be acting as an attorney.
7/ Note that G.L. c. 268A, § 17 generally permits a municipal attorney to represent both the municipality and a municipal employee in defense of a civil rights action where the complaint alleges liability in both the employee's individual capacity and official capacity. See Commission Advisory No. 84-03: Municipal Lawyers Representing Both a Municipal Employee and a Municipality in the Same Suit. Restrictions under the Rules of Professional Conduct may apply.
8/ Section § 20(b) permits a "regular" municipal employee to have a financial interest in a contract with a city or town if he is not employed by the agency which has the contract, is not employed by an agency which regulates the activities of the contracting agency, and does not participate in or have official responsibility for any of the activities of the contracting agency. In addition, the contract must be made after public notice or, where applicable, through competitive bidding. The state employee also must file a disclosure of his or his immediate family's financial interest in the contract with the city or town clerk. If he is contracting with an agency to provide personal services, then, in addition to the requirements above, the services must be provided outside the normal working hours of the municipal employee, the services must not be required as part of his regular duties and he must not be compensated for them for more than 500 hours in a calendar year, and the head of the contracting agency must file a certification with the city or town clerk stating that no employee of the agency is available to perform those services as part of their regular duties.
9/ The requirements of § 7(b) and § 20(b) are the same, except that under § 7(b), the employee's disclosure and the certification by the head of the agency must be filed with State Ethics Commission instead of the city or town clerk.
10/ Unlike § 7(b) and § 20(b), the exemption available for regular county employees under § 14(b) does not require any disclosure to be filed, and applies only to a contract made through competitive bidding in which the direct or indirect interest of the employee and his immediate family together amount to less than ten percent of the total proprietary interests in the corporation or other commercial entity with which the contract is made. Of the three exemptions, § 14(b) is the only one to include a maximum allowable interest. In addition, eligibility for the exemption for county employees is different. All three exemptions require that the employee not participate in or have official responsibility for any of the activities of the contracting agency. Under § 14(b), an exemption is available only if a "regular" county employee does not participate in or have official responsibility for any of the activities of the contracting agency and the contract is made through competitive bidding. In addition, the employee's direct and indirect interests in the corporation or other commercial entity with which the contract is made, and the interest of his immediate family, may not in the aggregate amount to ten percent of the total proprietary interests of the corporation or commercial entity.
11/ "Special state employee" a state employee: (1) who is performing services or holding an office, position, employment or membership for which no compensation is provided, or (2) who is not an elected official and (a) occupies a position which, by its classification in the state agency involved or by the terms of the contract or conditions of employment, permits personal or private employment during normal working hours, provided that disclosure of such classification or permission is filed in writing with the state ethics commission prior to the commencement of any personal or private employment, or (b) in fact does not earn compensation as a state employee for an aggregate of more than eight hundred hours during the preceding three hundred and sixty-five days. For this purpose compensation by the day shall be considered as equivalent to compensation for seven hours per day. A special state employee shall be in such a status on days for which he is not compensated as well as on days on which he earns compensation. G.L. c. 268A, § 1(o).
"Special county employee", a county employee who is performing services or holding an office, position, employment or membership for which no compensation is provided; or who is not an elected official and (1) occupies a position which, by its classification in the county agency involved or by the terms of the contract or conditions of employment, permits personal or private employment during normal working hours, provided that disclosure of such classification or permission is filed in writing with the State Ethics Commission and the office of the county commissioners prior to the commencement of any personal or private employment, or (2) in fact does not earn compensation as a county employee for an aggregate of more than eight hundred hours during the preceding three hundred and sixty-five days. For this purpose compensation by the day shall be considered as equivalent to compensation for seven hours per day. A special county employee shall be in such a status on days for which he is not compensated as well as on days on which he earns compensation. G. L. c. 268A, § 1(m).
"Special municipal employee," a municipal employee who is not a mayor, a member of the board of aldermen, a member of a city council, or a selectman in a town with a population in excess of ten thousand persons and whose position has been expressly classified by the city council, or board of aldermen if there is no city council, or board of selectmen, as that of a special employee under the terms and provisions of this chapter; provided, however, that a selectman in a town with a population of ten thousand or fewer persons shall be a special municipal employee without being expressly so classified. All employees who hold equivalent offices, positions, employment or membership in the same municipal agency shall have the same classification; provided, however, no municipal employee shall be classified as a "special municipal employee" unless he occupies a position for which no compensation is provided or which, by its classification in the municipal agency involved or by the terms of the contract or conditions of employment, permits personal or private employment during normal working hours, or unless he in fact does not earn compensation as a municipal employee for an aggregate of more than eight hundred hours during the preceding three hundred and sixty-five days. For this purpose compensation by the day shall by considered as equivalent to compensation for seven hours per day. A special municipal employee shall be in such status on days for which he is not compensated as well as on days on which he earns compensation. All employees of any city or town wherein no such classification has been made shall be deemed to be "municipal employees" and shall be subject to all the provisions of this chapter with respect thereto without exception. G.L. c. 268A, § 1(n).
12/ "Official responsibility" means the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or with others, and whether personal or through subordinates, to approve, disapprove or otherwise direct agency action. G.L. c. 268A, s.1(j).
13/ The term "serves" means substantive, rather than ministerial, services performed on any portion of a calendar day. EC-COI-98-6. When more than one employee of a law firm or a consulting firm is a special public employee, the 60-day restriction will apply to each of them individually.