New York State
Ethics Commission


Advisory Opinion No. 95-20: Determination of "former agency" for purposes of the application of the post-employment restrictions of Public Officers Law §73(8).

INTRODUCTION

The following advisory opinion is issued in response to an inquiry from [], a [job title] in the Department of Labor's ("Department") [], as to whether, under the post-employment restrictions of Public Officers Law §73(8)(a), he could, after leaving State service, represent employers or employees before the Unemployment Insurance Appeals Board ("Board"). The Commission is asked to determine whether the Board would constitute [the requesting individual]'s "former agency" for purposes of the two year bar.

Pursuant to its authority under Executive Law §94(15), the Commission hereby renders its opinion that the Board is within the Department, rather than separate and independent of the Department, for purposes of Public Officers Law §73(8)(a). [The requesting individual] is therefore prohibited from appearing, practicing or rendering services for compensation on any matter before the Board for a period of two years after termination of his State service.

BACKGROUND

The Department is one of twenty civil departments in New York State. The Commissioner of Labor is its administrative head and has "general administrative supervision over the several divisions, boards, commissions, bureaus, and agencies" which comprise the Department.(1) The Commissioner is charged with enforcement of the State Labor Law and the rules and regulations issued thereunder.

The Board is comprised of five members appointed by the Governor. It hears and determines appeals from decisions of Unemployment Insurance Referees relating to disputed claims for unemployment insurance benefits and contested determinations, rules and orders of the Commissioner affecting employer liability for unemployment insurance contributions.(2) The Board may conduct hearings, inquiries or investigations as required(3), and it promulgates rules and regulations concerning the manner in which disputes and appeals are presented before both Referees and the Board.(4)

The Board supervises, directs and administratively controls the Referees.(5) However, the Referees are appointed by the Commissioner of Labor. All employees of the Board appear on the Department's payroll. The Board is funded entirely by a federal grant provided by the United States Department of Labor. This grant -- the Unemployment Insurance Program Grant -- is administered by the Department and supports many unemployment insurance activities within the Department.(6)

With regard to unemployment insurance claims, initial determinations are made by the Department's Community Service Centers in the Unemployment Insurance Division on behalf of the Commissioner. These initial determinations may be appealed, either by the employer or claimant, to the Board. Appeals are first heard by a Referee, whose decision is final unless there is a further appeal to the Board. The Board has the power to affirm, reverse, or modify the Commissioner's initial decision.

[The requesting individual], is a [job title] with the Department's [ ].(7) [ ].

[The requesting individual] anticipates leaving State service to become a self-employed "entrepreneur", providing human resource services to a variety of employers, including restaurants, factories, law firms, and health-related facilities. In this capacity, he would, among other things, assist and represent employers at Board hearings. In other instances, he might represent claimants.

[The requesting individual] requested an informal opinion from the Commission as to whether he would be prohibited from engaging in several anticipated activities upon his leaving State service. On March 28, 1995, the Commission responded to the request. With regard to whether his appearance before the Board might constitute a violation of the two-year bar, the Commission advised [the requesting individual] that it had not previously been asked to determine whether the Board is separate from the Department for purposes of Public Officers Law §73(8), and it suggested that if he needed an answer, he should seek a formal opinion. [The requesting individual] then submitted the request currently before the Commission.

APPLICABLE LAW

Public Officers Law §73(8)(a) provides that:
No person who has served as a state officer or employee shall within a period of two years after the termination of such service or employment appear or practice before such state agency or receive compensation for any services rendered by such former officer or employee on behalf of any person, firm, corporation, or association in relation to any case, proceeding or application or other matter before such agency.

DISCUSSION

This provision is part of what is generally referred to as the "revolving door" statute, which sets forth the ground rules for what individuals may do with the knowledge, experience and contacts gained from public service after they terminate their employment with a State agency. The above-quoted paragraph contains a two year absolute bar which prohibits a former State officer or employee from appearing, practicing or rendering services for compensation in any matter before his or her former agency. The issue before the Commission is whether the Board constitutes [the requesting individual]'s "former agency."

The Commission has previously considered the status of various State entities for purposes of Public Officers Law §73(8)(a). In Advisory Opinion No. 90-18, the Commission concluded that the Division of Tax Appeals was a separate entity from the State Department of Taxation and Finance, stating:

The Division of Tax Appeals is an independent entity within the Department. The Division has a Tax Appeals Tribunal, which consists of three commissioners appointed by the Governor for a term of nine years. The tax appeals tribunal has the power of appointment and removal of its employees and prepares and submits a budget to the Commissioner of the Department which cannot be revised in any manner by the Commissioner. It is clear, from both the legislative intent contained in §2000 of the Tax Law and the provisions of Article 40, that the Division of Tax Appeals is a separate entity from the Department. Therefore, appearing or practicing before or receiving compensation related to a matter before the Division would not violate the two year bar . . . [for a former employee of the Department].

More recently, in Advisory Opinion No. 95-1, the Commission held that the Liquidation Bureau is separate from the State Insurance Department. Like the Tax Appeals Tribunal, the Bureau has the power of appointment and removal of its employees. The Bureau also has a separate funding source. In Advisory Opinion No. 95-3, the Commission held that the Governor's Office of Employee Relations ("GOER") is separate from the New York State/CSEA Labor-Management Committee ("Committee"). In that case, the Commission noted that decisions regarding hiring and firing, financial expenditures, and policy and program initiatives are made by the Committee, representing the interests of both labor and management. It stated:

Although GOER acts as both the administrative and financial arm to the Committee, this is more a matter of administrative convenience. That the Committee maintains a separate State agency code and that GOER takes painstaking steps to ensure the funding and administrative activities of the Committee remain separate from its operation is further evidence of the Committee's independence.

In the instant case, the Board does not have independence similar to that of the Tax Appeals Tribunal, the Liquidation Bureau or the Labor/Management Committee. Although the mission of the Board is to consider, on appeal, unemployment insurance determinations of the Labor Commissioner, the Board, unlike the Tribunal, is not defined in statute as separate and independent of the Department.(8) In addition, the Board does not utilize an exclusive funding source nor has it been assigned a separate agency code. Thus, its administrative and financial operations are not distinguished from those of the Department. Moreover, the Commissioner is authorized by statute to appoint Board Referees. This is in contrast to the Tax Appeals Tribunal, which independently appoints its top officials and administrative law judges.(9)

Functionally, there is not a separation between the Board and the Department. For example, an employer who wishes to contest an initial determination of the amount of its contributions or any other rule or order of the Commission is entitled to apply to the Commissioner for a hearing. However, the hearing is conducted by the Referees, who are under the supervision of the Board.(10) This demonstrates an inter-relationship between the Commissioner and the Board that does not exist between the Tax Appeals Tribunal and the Tax Department.

When considered together, these characteristics suggest that the Board is not an entity which is sufficiently independent of the Department to constitute a separate State agency for purposes of the two year bar.(11) The Commission, therefore, determines that the Board, as part of the Department, should be considered [the requesting individual]'s former agency. He may not appear, practice or render services for compensation on a matter before the Board for a period of two years from his separation from State service.

CONCLUSION

The Commission concludes that the Board is within the Department, rather than separate and independent of the Department, for purposes of Public Officers Law §73(8)(a). [The requesting individual] is therefore prohibited from appearing, practicing or rendering services for compensation on any matter before the Board for a period of two years after his termination from State service.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.

All concur:

Joseph M. Bress, Chair

Barbara A. Black
Angelo A. Costanza
Robert E. Eggenschiller, Members

Donald A. Odell abstained.

Dated: May 31, 1995


Endnotes

1. Labor Law §21.

2. Labor Law §§620, 621.

3. Labor Law §534.

4. Labor Law §622.

5. Labor Law §535.

6. [footnote omitted]

7. [footnote omitted]

8. See Tax Law §2002, which provides that ". . . [T]here shall be in the department of taxation and finance a separate and independent division of tax appeals. The powers, functions, duties and obligations of the division shall be separate from and independent of the authority of the commissioner of taxation and finance."

9. See Tax Law §2006(1) and (2).

10. See Labor Law §620.

11. Contrast the Board with the State Labor Relations Board ("SLRB"), a part of the Department that is administratively and functionally separate. There, the SLRB reports directly to the Governor. It appoints an executive secretary, attorneys, trial examiners and all other employees. It fixes the salaries of many of its professional employees. The independence of the SLRB is also made clear by statute:

Notwithstanding the provisions of any other law, neither the commissioner [of labor] nor any board or other agency of the department shall in any way direct, review, modify or reverse any decision or finding of the board nor shall the commissioner or any board or other agency of the department supervise or control the board in the exercise of any powers or in the performance of any duties under this article (Labor Law §702(8)).

Similar statutory provisions are applicable to the Workers' Compensation Board. See Workers' Compensation Law §142(4).



URL: http://www.nysl.nysed.gov/edocs/ethics/95-20.htm