ADVISORY OPINION 2008-5

Application of the Code of Ethics for Public Officials to supervisors and subordinates who employ each other in an outside employment setting

INTRODUCTION

The Citizen’s Ethics Advisory Board issues this advisory opinion at the request of an ethics liaison who has asked whether subordinates and supervisors may employ each other in an outside employment setting.   

QUESTIONS

1.                          Whether it is permissible, under the Code of Ethics for Public Officials (“Code of Ethics”), for a supervisor to employ a subordinate in the supervisor’s outside business.

2.                          Whether it is permissible, under the Code of Ethics, for a subordinate to employ a supervisor in the subordinate’s outside business.

3.                          Whether the restriction, if any, applies only to an immediate supervisor or an immediate subordinate.

ANSWERS

1.                          It is impermissible, under the Code of Ethics, for a supervisor to employ a subordinate in the supervisor’s outside business.

2.                          It is impermissible, under the Code of Ethics, for a subordinate to employ a supervisor in the subordinate’s outside business.

3.                          The restriction does not only apply to an immediate supervisor or an immediate subordinate.

BACKGROUND

            Several questions have arisen with regard to state employees who own outside businesses.  In order to set forth the parameters of permissible conduct, an ethics liaison has asked whether subordinates and supervisors may employ each other in an outside employment setting.  Past advisory opinions have reached differing results on this topic.   

ANALYSIS

I

            The former State Ethics Commission (“former Commission”), by way of advisory opinions and informal staff letters, rendered contradictory and ambiguous advice on this issue.  The language from the following three opinions indicates the differing views.  Advisory Opinion No. 1992-24 seems to be the original source of the ambiguity; in that opinion the former Commission stated:

[W]here a state employee-supervisor engages the services of a state employee-subordinate, the arrangement may impair the supervisor’s ability, in his official capacity, to objectively direct and evaluate the subordinate. For example, a supervisor might be tempted to schedule a subordinate’s duties in a way which would facilitate the performance of duties connected with the private business. In addition, the supervisor’s evaluation of the subordinate’s public duties would likely be affected by the subordinate’s competence in his outside employment. Under such circumstances, the outside employment arrangement would impermissibly impair the independence of judgment of the supervisor, in violation of Conn. Gen. Stat. §1-84(b),[1] and may not be undertaken.[2]

However, in the very same opinion the former Commission went on to state:

Another area of concern is the amount of compensation paid by one co-worker to another for outside employment. Where co-workers are of equal status, it may be assumed that outside compensation will be freely and fairly negotiated. The same assumption may not be made where a supervisor or superior employs a subordinate. A state employee-supervisor who pays a state employee-subordinate less than the fair market value for non-state work will have used his office for personal financial gain in violation of Conn. Gen. Stat. §1-84(c).[3]

Two later opinions cite Advisory Opinion No. 1992-24 and both have different interpretations of 1992-24.  The first opinion, Advisory Opinion No. 2000-20, states:

[R]egarding use of another state employee's time, such as one's administrative assistant, the faculty member may never use the authority of his state position to secure help relating to outside employment. Although the assistant may voluntarily agree to provide help while not on state time, it would be a use of office to pressure an employee when enlisting their aid. Additionally, any such outside work must be compensated at fair market rates . . . .[4]

            The second opinion, Advisory Opinion No. 2001-7, also citing Advisory Opinion No. 1992-24, took a different stance from that of Advisory Opinion No. 2000-20.  It states:

The Commission has previously held that, in general, a state employee supervisor may not privately employ a state employee subordinate without violating the §1-84(b) ban on acceptance of outside employment which impairs independent of judgment. Ethics Commission Advisory Opinion No. 92-24, 54 CLJ 31, p. 4C (2/2/93). Specifically, the Commission concluded that the supervisor’s judgment could be impermissibly impaired with regard to official duties such as evaluating the state performance of his or her subordinate. Id.[5]

Given the two different results, the question remains whether it is permissible for a supervisor to employ a subordinate in the supervisor’s outside business if the supervisor pays the subordinate fair market rates. 

Even in the instance that a supervisor pays a subordinate fair market rates for non-state work, the potential for impairment of independence of judgment remains.  As the former Commission noted, “a supervisor might be tempted to schedule a subordinate’s duties in a way which would facilitate the performance of duties connected with the private business. In addition, the supervisor’s evaluation of the subordinate’s public duties would likely be affected by the subordinate’s competence in his outside employment.”[6]  Beyond those concerns, there exist other potential conflicts of interests such as the supervisor treating a group of subordinates differently—those he or she supervises in an outside business versus those that he or she does not.  In addition, a subordinate asked to work at a supervisor’s business may feel that he or she has no other option than to accept the offer of non-state work from the individual charged with evaluating his/her state employment. 

We are, therefore, in agreement with Advisory Opinion No. 2001-7 and with that portion of Advisory Opinion No. 1994-24 that concludes that it is an impairment of independence of judgment pursuant to § 1-84 (b) for a supervisor to employ a subordinate in the supervisor’s outside business. 

II

            Similarly, it is not permissible for a subordinate to employ a supervisor in the subordinate’s outside business even if the subordinate pays the supervisor fair market rates.  That is because issues concerning impairment of independence of judgment arise under the Code of Ethics when a subordinate employs a supervisor in the subordinate’s outside business.  For example, a supervisor who is evaluated by a subordinate in an outside setting may feel obligated to evaluate the subordinate’s public duties in a more positive light.

Relying on the premise that public service is a public trust and that one’s public service takes precedence over outside endeavors, outside financial activities are only permissible to the extent that they do not conflict with one’s state duties. When a subordinate employs a supervisor in the subordinate’s outside business there is an inherent conflict with state duties. 

It is also, we believe, an impairment of independence of judgment pursuant to § 1-84 (b) for a subordinate to employ a supervisor in the subordinate’s outside business.

III

            While the impairment of independence of judgment referenced above may certainly diminish if the business affiliation occurs with individuals higher up or lower down the chain of command, it does not cease to exist merely because the relationship is not that of immediate supervisor and immediate subordinate.  The following example illustrates that point.  The commissioner of a state agency asks a lower ranking employee to work for the commissioner’s outside business.  As a result of the employee’s performance in the outside business, the commissioner, higher up the chain of command than both the employee and the employee’s immediate supervisor, may be tempted to influence the employee’s evaluation process.

            In addition, this Board has previously extended the word “supervisor” to those individuals “up the chain of command.”[7]  It has similarly extended the term “under the supervision of” to individuals “down the chain of command.”[8]  Although that was done in the context of gifts, we believe that for purposes of consistency and for purposes of preventing abuse and impairment of independence of judgment, the same interpretation should be adopted here.  That is, “supervisor” means those individuals “up the chain of command” and “subordinate” means those individuals “down the chain of command.”

Thus, an impairment of independence of judgment pursuant to § 1-84 (b) does not only exist with situations that involve an immediate supervisor or an immediate subordinate.  Such impairment could arise with other individuals up and down the chain of command. 

Advisory Opinion No. 2000-20, and any others, to the extent they conflict with this opinion, are hereby revoked.

By order of the Board,

                                                                                            

                                                                                                Robert Worgaftik, Chairperson

Dated July 24, 2008