Opinion CJE Letter Opinion No. 2018-01

Date: 03/14/2018
Organization: Massachusetts Supreme Judicial Court

Letter Opinion of the Committee on Judicial Ethics

Table of Contents

Participating in a For-Profit Business

You have asked the Committee on Judicial Ethics whether you may work at a retail business in Boston jointly owned by you, your brother, and several cousins. You state that you would work only after court hours or on weekends and would not be compensated. You also state that you sit outside of Boston, you would not disclose your judicial occupation, and you would be willing to work outside of the view of any customers.(1)

The Massachusetts Code of Judicial Conduct includes a clear prohibition on a judge’s serving as an “officer, director, manager, general partner, advisor, or employee of any business entity except that a judge may manage or participate in a business entity primarily engaged in investment of the financial resources of the judge or members of the judge’s family.” See Rule 3.11.(2) The underlying rationale for this per se rule is a concern with impropriety and the appearance of impropriety. “Even judges with the purest motives and the highest standards are vulnerable to the unstated intentions of those who patronize their businesses.” Charles Geyh, Charles Alfani, et. al., Judicial Conduct and Ethics, (Lexis-Nexis, 5th edition, 2013) at 7-24.

The prohibition in Rule 3.11 bars a judge from being an active participant in any form of business organized for profit, even if the judge declines compensation. See Letter Opinion 2017-04. The Federal Fair Labor Standards Act generally prohibits for-profit businesses from using unpaid volunteers.(3) Even in an instance where a for-profit business is not otherwise barred from using uncompensated volunteers, there are additional legal pitfalls, including those pertaining to responsibility for workplace accidents to the volunteer or caused by the volunteer.

Unlike the American Bar Association's Model Code of Judicial Conduct, the Massachusetts Code of Judicial Conduct does not include an exception permitting a judge to manage or participate in a business closely held by the judge or members of the judge’s family. The Massachusetts Code twice rejected carving out such an exception.

 The ABA introduced this exception in its Model Code of 1990,(4) but this exception was not included in the Massachusetts Code of Judicial Conduct of 2003, which was based on that model code. The ABA Model Code of 2007 retained the family-business exception, but the Massachusetts Committee that recommended the 2016 Code to the Justices of the Supreme Judicial Court chose to maintain the prohibition in the 2003 Massachusetts Code. The Massachusetts Committee was persuaded by commentators who argued that “if active involvement in a business is subtly or apparently coercive, which is otherwise the clear judgment of the Code, then it would seem that the principle ought to apply with equal force to closely held family businesses, not to mention sole proprietorships.” Id. at 7-26.(5)

We are, of course, aware that our Code of Judicial Conduct gives judges more latitude to engage in extrajudicial activities of or sponsored by or on behalf of legal, educational, religious, charitable, fraternal, or civil organizations, which are not conducted for profit. See Rules 3.7 and 3.12. We understand that a judge may wonder why, for example, she may be permitted to accept reasonable compensation for work performed for a non-profit organization, but may not perform work for a for-profit business, even as a volunteer. The reason is that these examples are governed by two different Code provisions, reflecting different policy judgments. Work for a for-profit business is prohibited by Rule 3.11, which establishes a per se rule prohibiting a judge from actively participating in a for-profit business even if the judge were to proactively seek to limit the risks presented by the engagement. Work for a non-profit organization is assessed under Rule 3.12, which does not impose a bright-line distinction but relies on an individualized analysis of the facts to assess whether the judge's conduct and compensation is consistent with the Code. This assessment includes ensuring that the duties of judicial office take precedence, the compensation is reasonable, no conflicts are created, and no question of undue influence or impropriety or the appearance of impropriety is raised.     

Because the situation you present falls within a per se prohibition in the Code, you may not work at the business jointly owned by you, your brother, and your cousins.

(1) This opinion relies on facts you have provided to the Committee on Judicial Ethics. We have not undertaken an independent investigation of this information. If material facts have been omitted or misrepresented, this opinion is without force and effect.

(2) The Code includes one exception to this prohibition. A judge may generally teach for a for-profit entity or write or contribute to the publications of a for-profit entity. See Rule 3.7,Comment [5].

(3) See Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. In most instances, the FLSA does not permit a person to volunteer services to an employer in the private sector. See United States Department of Labor, Fair Labor Standards Act Advisor. http://webapps.dol.gov/elaws/whd/flsa/docs/volunteers.asp

(4) The previous ABA Model Code, adopted in 1972, permitted a new judge to actively participate in a family business only during a period of transition to the judicial role. See http://fsmsupremecourt.org/pdf/1972codeofjudicialconduct.pdf 

(5) The Reporter's Notes to the ABA Model Code of 2007 explain that the Code Commission engaged in "long debate" over whether to amend Rule 3.11 by adopting  one of two alternatives: either (i) to permit judges to engage in remunerative extrajudicial activities without explicit limitation, or (ii) to strengthen the prohibition against remunerative extrajudicial activities by eliminating the family business exception. "In the end," the Reporter's Notes state, "the Commission adopted neither alternative and elected to retain the restrictions as they appeared in the 1990 Code." Charles Geyh and William Hodes, Reporters' Notes to the Model Code of Judicial Conduct (ABA 2009). Several other jurisdictions in addition to Massachusetts have also declined to adopt the family-business exception. See Charles Geyh, Charles Alfani, et. al., Judicial Conduct and Ethics, (Lexis-Nexis, 5th edition, 2013) at 7-26.

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