Opinion  EC-COI-91-11

Date:	04/18/1991
Organization:	State Ethics Commission

A state employee who chose to take required "furlough" time (under St. 1990, c. 6, section 90) as unpaid leave continued to be a state employee under G.L. c. 268A, in view of the employee's receiving continued health insurance and other benefits and having a reasonable expectation of returning to work. However, the employee was a "special state employee" for the purpose of analysis under Sections 4 and 7.

Facts

Page 352

You are a state employee in state agency ABC. You seek guidance concerning the application of G.L. c. 268A to employees of ABC who will be furloughed for a period of at least five (5) consecutive days during the remainder of the 1991 Fiscal Year. Under St. 1991, c.6, s.90, and regulations of the Commissioner of Administration, each state employee must select one of several options which would either defer or eliminate altogether the employee's entitlement to compensation for periods of up to three (3) weeks. One particular option, Option 1, would permit an employee to take a period of unpaid leave. During the leave period, an employee will not perform services for particular days and will not receive compensation for those days, but will receive continued health insurance, sick leave benefits and retirement credit.

Questions

1. Is an employee of the ABC who selects a furlough option under which the employee does not perform services for one to three consecutive weeks and does not receive compensation during that period considered a "state employee"[1] under G.L. c. 268A during the furlough period? 

2. Assuming the answer to Question No. 1 is yes, what restrictions will apply during the furlough period?[2]

Answers

1. Yes.

Page 353

2. The employee will be subject to the restrictions set forth below.

Discussion

1. State Employee Status

 On three previous occasions, the Commission has addressed the application of G.L. c. 268A to appointed employees who are on leave of absence from their fulltime positions. Most recently, in EC-COI-89-27, the Commission concluded that an injured municipal employee would be considered a municipal employee under G.L. c. 268A during the injured leave period. In EC-COI-89-27, the Commission announced the following factors as relevant in determining jurisdiction: 

In a determination of whether one continues to hold employment within a municipal agency the Commission will examine the characteristics of the relationship between the employee and the agency. The Commission will consider whether a previously compensated employee continues to receive compensation from the municipal agency, whether the employee continues to receive the same retirement, insurance, collective bargaining, sick leave and other benefits available to municipal employees, whether the parties have a reasonable expectation that the employee will return to his municipal position and what actions have been taken by the parties to terminate the employment relationship. No one factor is dispositive as the Commission considers the cumulative effect produced by each factor, as well as analyzing each factual situation in light of the purpose of the conflict of interest law. (citations omitted) 

The Commission applied these standards to establish jurisdiction in EC-COI-89-27 inasmuch as the injured employee continued to receive health insurance and other economic benefits from the municipality during the leave period and had a reasonable expectation that he would return to work. 

The Commission reached a similar conclusion in EC-COI-84-46, an opinion addressing the application of G.L. c. 268A to state institutional teachers during the two month summer period in which these teachers neither teach nor receive compensation. The finding of continuing state employee status rested on the continuity of retirement, insurance, collective bargaining and sick leave benefits to institutional teachers during the two month leave. This opinion distinguished EC-COI-84-17 in which the Commission held that state employee status does not continue during a leave of absence in which the employee receives no compensation, fringe benefits or retirement credit attributable to that leave period. The Commission noted, however, that a period of absence due to vacation, holidays, personal time or illness would not affect state employee status where the employee was receiving benefits during the leave period. EC-COI-84-17.[3] 

Applying the EC-COI-89-27 factors to your question, we conclude that a state employee who chooses Option 1 and who takes unpaid leave will retain state employee status under G.L. c. 268A during the leave period, inasmuch as the employee will be receiving continued health insurance and other benefits and has a reasonable expectation of returning to work. EC-COI-89-27; 84-46. 

We also conclude that, during the period of uncompensated leave under Option 1, a state employee will be considered a special state employee pursuant to G.L. c. 268A, s.1(o).[4] This conclusion is consistent with both the language of s.1(o) granting special employee status for a position for which no compensation is provided, as well as Commission precedent. See, EC-COI-84-46 (institutional school teachers are special state employees during their uncompensated summer leave).[5]

 2. Application of G.L. c. 268A During Leave Period

 Although your opinion request does not identify the specific types of outside activity in which employees intend to engage during the unpaid leave period, we can offer the following general guidelines.

 (a) Section 4

 If an employee receives compensation from or represents a party other than the commonwealth or a state agency during the leave period, G.L. c. 268A, s.4 will apply. Under s.4, a state employee may neither receive compensation from nor act as agent or attorney for anyone other than the commonwealth or a state agency in connection with any lawsuit or other particular matter[5] in which the commonwealth or a state agency is a party or has a direct and substantial interest. As a special state employee, however, the employee is exempt from the restrictions of s.4 except for those particular matters in which the employee participates, has official responsibility for, or which are pending in the employee's state agency. EC-COI-91-5. Thus, an ABC employee would be prohibited during the unpaid leave period from receiving compensation from or representing a client in any matter pending in ABC. On the other hand, the employee could work on civil matters and other particular matters which are outside of the ABC's jurisdiction, since those matters would not be pending in the ABC's office.

 (b) Section 7

 If an employee receives compensation from or works for another state agency during the unpaid leave period, G.L. c. 268A, s.7 will apply. Under s.7, a state employee may not have a financial interest, direct or indirect, in a contract made by a state agency. As a special state employee, however, the employee is exempt from s.7 except for financial interests in contracts made by the same state agency, e.g., the ABC's office. G.L. 

Page 354 

c. 268A, s.7(d).[7] Thus, an ABC employee could contract with a state agency independent of the ABC's office during the leave period. 

In addition to the restrictions of s.s.4 and 7, employees should also be aware of the following point. 

1. Under G.L. c. 268A, s.23(c), a state employee may not disclose to anyone, including a law firm, any confidential information which the employee has acquired as a state employee. 

2. If, prior to the leave period, a state employee has an arrangement for employment with a law firm, G.L. c. 268A, s.6 requires the employee to abstain from any official participation in cases involving that firm and to disclose the employment arrangement to both the employee's appointing official and the Commission. See, Commission Advisory No. 14.

[1] "State employee," a person performing services for or holding an office, position, employment, or membership in a state 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, including members of the general court and executive council ... G.L. c. 268A, a.1(q).

[2] This opinion is limited to the application of G.L. c. 268A. To the extent that you seek guidance as to the application of other statutes to the outside activities of ABC employees on furlough, you should continue to pursue an answer to this question from the Attorney General.

[3] While not directly related, EC-COI-83-84 concluded in that an elected municipal official retained municipal employee status during the period of a brief leave of absence. This conclusion rested on the fact that the official continued to hold the elected position.

[4] "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, s.1(o). 

[5] In EC-COI-84-46, the Commission left open the question of whether special employee status would apply during a comparatively short unpaid leave, specifically noting that a state employee would not be a special state employee during the weekend between his or her normal work week. The circumstances surrounding the enactment of St. 1991, c.6 and the resulting employee obligation to choose options to generate savings for the commonwealth at the immediate expense of the employee distinguish unpaid leave under Option 1 from weekend leave. We note that special state employee status does not accrue to employees who elect furlough options for periods in which they perform services and agree to receive deferred compensation or vacation days for those periods. On the other hand, a period of uncompensated leave, under Option 1, even for a period of less than five continuous days, would result in eligibility for special state employee status.

[6] "Particular matter," any judicial or other proceeding, application, submission, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, decision, determination, finding, but excluding enactment of general legislation by the general court and petitions of cities, towns, counties and districts for special laws related to their governmental organizations, powers, duties, finances and property. G.L. c. 268A, s.1(k).

[7] A special state employee qualifies for a s.7(d) exemption where the financial interest is in a contract made by an agency in whose activities the employee neither participates nor has official responsibility as a state employee, and the employee discloses the financial interest to the Commission.