The URL can be used to link to this page

Home My WebLink About11-536 ADVICE OF COUNSEL June 29, 2011 11-536 This responds to your letters dated April 15, 2011, and June 21, 2011, by which you requested a confidential advisory from the Pennsylvania State Ethics Commission. Issue: Whether a solicitor for a [political subdivision] would be considered a “public employee” subject to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., where: (1) the solicitor is required to provide legal services to the [political subdivision] on a part-time basis for a minimum of [number] hours each year, for which he is paid compensation of approximately [amount] per year; (2) the [political subdivision] issues W-2s to the solicitor and withholds FICA contributions from his pay; (3) the solicitor does not receive any employment-related benefits provided by the [political subdivision], such as sick or vacation days, holiday pay, or health, dental, and vision benefits; (4) the [political subdivision] considers the solicitor to be an at-will part-time employee; (5) the solicitor has no specific work hours, and no one from the [political subdivision] controls or directs the means, manner, method, sequence, or timing of his provision of services; and (6) the solicitor assumes his own liability for the professional services that he renders, and he must provide the [political subdivision] with proof of his own malpractice insurance coverage for such services; and if so, whether the Ethics Act would impose any prohibitions or restrictions upon the solicitor with regard to the [political subdivision’s] prospective retention of a law firm with which he is associated to serve as outside counsel on [type of matters]. Facts: You have been authorized by Individual A to request a confidential advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. In [month, year], the Bs of [name of political subdivision] (“the Political Subdivision”) appointed Individual A as the Solicitor for the Political Subdivision. The Political Subdivision considers Individual A to be an at-will part-time employee. As the Political Subdivision Solicitor, Individual A is required to provide legal services to the Political Subdivision on a part-time basis for a minimum of [number] hours each year, for which he is paid compensation of approximately [amount] per year. The Political Subdivision issues W-2s to Individual A and withholds FICA contributions from his pay. Individual A does not receive any employment-related benefits provided by the Political Subdivision, such as sick or vacation days, holiday pay, or health, dental, and vision benefits. Confidential Advice, 11-536 June 29, 2011 Page 2 Individual A has no specific work hours, and no one from the Political Subdivision controls or directs the means, manner, method, sequence, or timing of his provision of services. Individual A assumes his own liability for the professional services that he renders, and he must provide the Political Subdivision with proof of his own malpractice insurance coverage for such services. As the Political Subdivision Solicitor, Individual A is responsible for bringing and defending any lawsuits on behalf of the Political Subdivision. Individual A reviews and drafts contracts between the Political Subdivision and vendors or service providers, advises the Political Subdivision Bs on matters such as interpreting statutes that apply to Political Subdivision operations, and drafts policies and ordinances on behalf of the Political Subdivision. However, Individual A does not provide legal services or advice to the Political Subdivision Bs concerning C matters. You state that for at least the past [number] years, the Political Subdivision Bs have retained separate outside law firms to handle C matters and D for the Political Subdivision. Such outside firms have performed various legal services pertaining to C matters for the Political Subdivision. In [month, year], the Political Subdivision Bs determined that they were going to cease using one of the law firms that had been utilized to act as outside counsel on C matters. You state that by virtue of a public resolution approving an E, the Political Subdivision Bs subsequently engaged the law firm of [name of law firm] (“the Firm”) to represent the Political Subdivision in certain C matters. Individual A is an equity partner at the Firm. Under the proposed arrangement between the Political Subdivision and the Firm, the counsel work on C matters would not be performed by Individual A but would be performed by other attorneys at the Firm. You state that on [date], the Firm notified the Political Subdivision Bs that the Firm would not be performing any services for the Political Subdivision and withdrew the Firm’s representation prior to performing any services for the Political Subdivision or receiving any compensation from the Political Subdivision. Based upon the above submitted facts, you ask whether Individual A, in his capacity as Solicitor for the Political Subdivision, would be considered a public employee subject to the Ethics Act, and if so, whether the Ethics Act would impose any prohibitions or restrictions upon Individual A in his capacity as Solicitor for the Political Subdivision with regard to the Political Subdivision’s prospective retention of the Firm to serve as outside counsel on C matters. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion/advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion/advice but any person may then submit a signed and sworn complaint, which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent your inquiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may, and shall, be addressed. Confidential Advice, 11-536 June 29, 2011 Page 3 In responding to your inquiry, the threshold issue to be addressed is whether, as Solicitor for the Political Subdivision, Individual A would be considered a “public employee” subject to the Ethics Act. In 1997 and 1999, the status of Solicitors under the Ethics Act was clarified by certain rulings of the Commonwealth Court of Pennsylvania and the Supreme Court of Pennsylvania. In P.J.S. v. State Ethics Commission, 697 A.2d 286 (Pa. Cmwlth. 1997), the Commonwealth Court of Pennsylvania held, inter alia, that a Solicitor who is employed by a governmental body and not just on retainer would be considered a “public employee” subject to the provisions of the Ethics Act. The Supreme Court of Pennsylvania subsequently affirmed the Commonwealth Court's decision in the P.J.S. case. P.J.S. v. State Ethics Commission, 555 Pa. 149, 723 A.2d 174 (1999). In C.P.C. v. State Ethics Commission, 698 A.2d 155 (Pa. Cmwlth. 1997), alloc. den., 550 Pa. 686, 704 A.2d 640 (1997), the Commonwealth Court of Pennsylvania determined that a municipal Solicitor who is retained by–as opposed to being an employee of–the municipality is not a "public official” or "public employee" as those terms are defined in the Ethics Act. Factually, P.J.S. was a full-time city solicitor. He was placed on the city’s payroll as a salaried employee working a 35 hour workweek. He participated in the pension plan and workmen’s compensation plan for city employees. He earned paid sick leave and vacation time. He was issued W-2’s, and all federal, state, and local taxes were withheld from his paychecks. In contrast, C.P.C. was a borough solicitor on retainer to the borough. He was not a full-time salaried employee receiving the same benefits as other borough employees. In the instant matter, a lthough it appears that the Political Subdivision treats Individual A as an employee for the limited purpose of withholding FICA contributions from his pay, all other relevant indicia support the conclusion that as the Political Subdivision’s Solicitor, Individual A is an independent contractor. You are advised that based upon the submitted facts, Individual A, in his capacity as the Solicitor for the Political Subdivision, is not a “public employee” subject to the Ethics Act, and therefore he is not subject to the restrictions of Section 1103(a) of the Ethics Act (pertaining to conflict of interest) or Section 1103(f) of the Ethics Act (pertaining to contracting). Consequently, your second question, regarding the Political Subdivision’s prospective retention of the Firm to serve as outside counsel on C matters, does not need to be addressed. It is parenthetically noted that all Solicitors are required to file Statements of Financial Interests pursuant to the Ethics Act. 65 Pa.C.S. § 1104(a); Foster, Opinion No. 98-002; see also, P.J.S., supra (intent of amendment to Section 404, now Section 1104, of the Ethics Act was to include solicitors who are not employees of the governmental units they serve within the scope of the Ethics Act’s financial disclosure provisions). Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: Based upon the submitted facts that: (1) in [month, year], the Bs of [name of political subdivision] (“the Political Subdivision”) appointed Individual A as the Solicitor for the Political Subdivision; (2) the Political Subdivision considers Individual A to be an at-will part-time employee; (3) as the Political Subdivision Solicitor, Individual A is required to provide legal services to the Political Subdivision on a part-time basis for a minimum of [number] hours each year, for which he is paid compensation of Confidential Advice, 11-536 June 29, 2011 Page 4 approximately [amount] per year; (4) the Political Subdivision issues W-2s to Individual A and withholds FICA contributions from his pay; (5) Individual A does not receive any employment-related benefits provided by the Political Subdivision, such as sick or vacation days, holiday pay, or health, dental, and vision benefits; (6) Individual A has no specific work hours, and no one from the Political Subdivision controls or directs the means, manner, method, sequence, or timing of his provision of services; and (7) Individual A assumes his own liability for the professional services that he renders, and he must provide the Political Subdivision with proof of his own malpractice insurance coverage for such services, you are advised as follows. Individual A, in his capacity as the Solicitor for the Political Subdivision, is not a “public employee” subject to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., and therefore he is not subject to the restrictions of Section 1103(a) of the Ethics Act (pertaining to conflict of interest) or 1103(f) of the Ethics Act (pertaining to contracting). All Solicitors are required to file Statements of Financial Interests pursuant to the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hittie Chief Counsel