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HomeMy WebLinkAbout90-016 MinorMr. Stephen P. B. Minor Binotto, Sweat & Johnson 8 East Pine Street Washington, PA 15301 -6704 Re: Borough, Public Employee, Borough Manager, Prospective Employment, Assumption or Acceptance of Public Employment, Severance Payment from Borough. Dear Mr. Minor: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Helena G. Hughes, Chair Robert W. Brown, Vice Chair W. Thomas Andrews G. Sieber Pancoast Dennis C. Harrington James M. Howley Daneen E. Reese DATE DECIDED: June 22, 1990 DATE MAILED: July 9. 1990 90 -016 / This Opinion is issued in response to your request of May 30, 1990. I. Issue: Whether a prospective borough manager may under the Public Official and Employee Ethics Law accept such position with a bargained for compensation which would include a severance payment from the borough to the manager upon termination of service. II. Factual Basis for Determination: As solicitor for a certain borough, you seek the opinion of this Commission as to the propriety under the Public Official and Employee Ethics Law of an individual becoming borough manager under an employment agreement which would grant the individual a four month severance payment to be paid by the borough upon termination of service if the individual leaves under favorable conditions or has not been removed for criminal misconduct. The agreement has been negotiated directly between the prospective borough manager and the borough council and includes other items such as the reimbursement for actual moving expenses. After referencing the prohibition set forth Mr. Stephen P. B. Minor Page 2 in Section 3(e)(1) against accepting a severance payment as an inducement to accept public employment, you argue that it is not a severance payment offered by a "private" employer as an inducement to accept public employment. You conclude by noting that the borough merely desires to provide the borough manager with severance pay / upon his termination of service from the borough. III. Discussion: The prospective borough manager would become a "public employee" if he is offered and accepts the position of public employment. 65 P.S. Section 402; 51 Pa. Code §1.1. In addition, the prospective employee is an individual who is subject to Section 3(e) of the Public Official and Employee Ethics Law. Section 3(e) of the Ethics Law provides: Section 3. Restricted activities. (e)(1) No person shall solicit or accept a severance payment or anything of monetary value contingent upon the assumption or acceptance of public office or employment. (2) This subsection shall not prohibit: (i) Payments received pursuant to an employment agreement in existence prior to the time a person becomes a candidate or is notified by a member of a transition team, a search committee or a person with appointive power that he is under consideration for public office or makes application for public employment. (ii) Receipt of a salary, fees, severance payment or proceeds resulting from the sale of a person's interest in a corporation, professional corporation, partnership or other entity resulting from termination or withdrawal therefrom upon the assumption or acceptance of public office or employment. (3) Payments made or received pursuant to paragraph (2)(i) and (ii) shall not be based on the agreement, written or otherwise, that the vote or official action of the prospective .public official or employee would be influenced thereby. Mr. Stephen P. B. Minor Page 3 (4) This subsection shall not be applied retroactively. The following definition is defined under the Ethics Law: Section 2. Definitions. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. We do not believe that the above provision of law has application to the acceptance of the position of borough manager with all the incidents thereof, including a severance payment. Section 3(e)(1) requires two conditions for its application. The first condition is the offer or acceptance of a "severance payment or anything of monetary value "; the second condition is that the acceptance is "contingent upon assumption or acceptance of public employment." In this instance, the acceptance of the severance is not conditioned upon assumption or acceptance of public employment. The operative condition is that the borough manager must leave under favorable conditions and not for any criminal misconduct. Since the condition has nothing to do with the acceptance of public office/ we do not believe that Section 3(e)(1) applies to this situation. Section 3(e) had its genesis from Mazziotti, Opinion 87 -005 -R and Keisling, Opinion 88 -005 which dealt with the subsidization of the salaries of public officials /employees by outside entities. As we noted in Confidential Opinion, 90 -014, the enactment of Section 3(e) was "a direct response to said issues." It is clear that Section 3(e) was enacted to address the above concerns; it was not enacted to curtail or restrict a governmental body from negotiating the terms of an employment contract with an applicant for a position of public employment. As noted, the operative condition as to the severance does' not relate to the acceptance of the offer but to the condition that the individual leave under favorable circumstances and not be removed for criminal misconduct. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other Mr. Stephen P. B. Minor Page 4 than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Law. IV. Conclusion: Section 3(e)(1) restricts any person, from 'offering or accenting a severance payment or anything of value contingent upon the of public employment. A prospective borough manager could accept such position under circumstances where the employing borough as part of the compensation package includes a severance payment argument since such payment does not relate to the acceptance of public office but is conditioned upon leaving under favorable circumstances. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(10), the person who acts in good faith on this opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, any person may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within fifteen days of the mailing date of this Opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the Opinion requires / reconsideration. By t Commission, Helena G. Hughes, Chair