New York State
Ethics Commission


Advisory Opinion No. 96-11: Application of the revolving door provision of Public Officers Law §73(8)(a)(i) to an employee of a voluntary provider when the provider is temporarily taken over on an emergency basis by the Office of Mental Retardation and Developmental Disabilities.

INTRODUCTION

The following advisory opinion is issued in response to a request submitted by [ ], who was a part-time employee of a voluntary service provider temporarily taken over on an emergency basis by the New York State Office of Mental Retardation and Developmental Disabilities ("OMRDD") pending the appointment of a receiver. [The requesting individual] was terminated from her position by OMRDD, and she asks whether she is subject to the two year bar of Public Officers Law §73(8)(a)(i).

Pursuant to its authority under Executive Law §94(15), the New York State Ethics Commission ("Commission") concludes that the two year bar of Public Officers Law §73(8)(a)(i) does not apply to [the requesting individual] as a result of her termination from her part-time position, as she was not, in the circumstances, a State employee for purposes of Public Officers Law §73.

BACKGROUND

On [date], 1992, [the requesting individual], who had been employed by OMRDD, left her position as a [ ] with the agency's Bureau of [ ] and took a full-time position with [the first organization], a private not-for-profit organization serving the mentally retarded. She continues to hold this position. Her current responsibilities include supervising interdisciplinary treatment team coordinators and providing follow-up services for [the first organization's] clients. Significantly, as part of her responsibilities, [the requesting individual] is required to be on site to provide supervision and support whenever OMRDD conducts surveys of [the first organization's] residences. This requires her to interact with her former agency, which is permissible since more than two years have passed since she left the agency.

In [date], 1993, [the requesting individual], in addition to continuing to work full-time for [the first organization], took a part-time position with [the second organization], another private, not-for-profit provider of services to mentally retarded and developmentally disabled individuals. Her duties were similar to those she had at [the first organization], except she was retained on a part-time basis at $10 per hour.

On [date], 1995, [the second organization] went out of business as a result of efforts by OMRDD to revoke its operating certificate. Pursuant to Mental Hygiene Law §16.27(a), [the second organization] requested that OMRDD take over the operation of its facilities by the appointment of a receiver. While the statute provides that, "the receiver should, where reasonably possible, be a voluntary association or not-for-profit corporation which holds a valid and current operating certificate for a residential facility,"(1) it is often necessary for OMRDD to take over the operation of a facility until such time as an appropriate licensed operator can be selected and appointed.(2)

In the case of [the second organization], OMRDD assumed the operation of its facilities and continued all of its employees. Each employee was assigned to a temporary item on OMRDD's payroll. Thus, [the requesting individual], with no action on her part, became a temporary, part-time employee of OMRDD. According to the agency, she was eligible to receive all benefits of a State employee.

[The requesting individual] was terminated from her part-time position, effective [date], 1996, and she now faces a dilemma. The two year bar effective when she left State service in 1992 has expired, leaving her free to assist [the first organization], for which she continues to work full time, on OMRDD-conducted surveys. However, she has just been terminated by OMRDD from her part time position, a position created when the agency took over [the second organization]. [The requesting individual] requests that she not again be faced with the restrictions of the two year bar. She argues that she did not "voluntarily rejoin State service," she was not in a policymaking position, her service was only temporary and part-time, and she counts on her present position with [the first organization] to support herself. If [the requesting individual] is again subject to the two year bar, she maintains that she could not continue her full-time employment for [the first organization] without violating the statute's restrictions.

APPLICABLE STATUTE

Public Officers Law §73(8)(a) states, in relevant part, that:

(i) 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

Section 73(8)(a)(i) contains a two year absolute bar on an employee's appearing, practicing or rendering services for compensation on any matter before his or her former agency. In prior opinions, the Commission has held that all former State employees, regardless of position, function, status or bargaining unit, are covered by the statute. (Advisory Opinion No. 91-17.) For example, the Commission has held that seasonal employees retained by the Department of Taxation and Finance are covered. (Advisory Opinion No. 94-4.) Thus, the fact that [the requesting individual] served on a part-time, temporary basis is insufficient to place her beyond the restrictions of the two year bar.

What is unusual in this case is that [the requesting individual], who had previously terminated her State service to take a position in the private sector, found herself involuntarily returned to the State payroll upon OMRDD's takeover of [the second organization's] facilities. As she originally commenced employment with [the second organization] in [date], 1993 and OMRDD's takeover did not take place until two years later, it cannot be said that she had reason to know that she would be returning to State service or that she was securing employment with [the second organization] in order to re-enter State service.

The instant matter is clearly distinguishable from the circumstances presented to the Commission in Advisory Opinion No. 95-34. There, the New York Convention Center Operating Corporation ("NYCCOC") began to certify formerly private sector laborers to be selected by contractors to perform certain work at the Jacob Javits Center. NYCCOC was to be responsible for paying all wages and obtaining workers' compensation and state disability law insurance for these workers. The Commission concluded that the former private sector laborers became State employees for purposes of Public Officers Law §§73, 73-a, and 74. NYCCOC's takeover of what had been a private function was intended as a long-term solution to address problems concerning the providing of laborers at the Javits Center.

In the instant matter, OMRDD does not intend to permanently run [the second organization's] facilities. Its operation of these facilities will only last as long as it is necessary for the agency to find, and have appointed as a receiver, an appropriate private, not-for-profit provider.

Clearly, the agency wishes to have a receiver appointed as soon as possible. The obvious difficulty is that a facility which provides critical services to individuals on an ongoing basis cannot be closed for an interim period until a receiver is in place. There must be a bridge between the former operator and the receiver's commencing operations, and the only entity with both the authority and ability to serve as a bridge operator is the State.

In these circumstances, the function of the State is not to exercise its sovereign powers; rather, it is more akin to acting as a temporary receiver until a private receiver can be formally appointed. Its purpose is to operate a private facility, using existing employees, for a short period of time.

Furthermore, the employees did not seek to become State employees, nor do they carry out State functions. In essence, they have continued to function as they had under the prior operator, and they are likely to continue to function similarly under the receiver. To deem them State employees under these circumstances would ignore the essence of the situation. The Commission, therefore, concludes that the facilities formerly operated by [the second organization], which have been and will be privately operated, should not be deemed State facilities, and their employees should not be deemed State employees for purposes of Public Officers Law §73.

Viewing the larger picture, a contrary conclusion would lead to unintended results. When OMRDD turns over management of the facilities to the receiver, it is anticipated that many of the employees will continue in their jobs. However, if the Commission were to conclude that [the requesting individual] and the other employees of the facilities were State employees because of OMRDD's interim operation, the post-employment restrictions would apply to all of them once the receiver is appointed. All employees whose job responsibilities include appearing or rendering services on matters before OMRDD would then be barred by the two year bar from continuing in their positions and activities. Such an end is not envisioned by the ethics laws, where the only purpose of the OMRDD takeover is to protect the public during a temporary period.(3)

CONCLUSION

The Commission concludes that where OMRDD operates formerly private facilities for a short period of time pending appointment of a receiver, the facilities do not become State facilities and their employees do not become State employees for purposes of Public Officers Law §73. Since [the requesting individual] was such an employee, she is not a former State employee covered by Public Officers Law §73(8)(a)(i).

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

Evans V. Brewster,
Angelo A. Costanza,
Robert E. Eggenschiller,
Donald A. Odell, Members

Dated: May 28, 1996


Endnotes

1. Mental Hygiene Law §16.27(b)(1)b.

2. A receivership must terminate at such time as may be provided in the receivership agreement, or 120 days after receipt by either party of written notice that the other party wishes to terminate the receivership. Mental Hygiene Law §16.27(a).

3. This Advisory Opinion applies only to [the second organization's] employees who were working prior to and at the time of the takeover, not to individuals hired as State employees during the "receivership."



URL: http://www.nysl.nysed.gov/edocs/ethics/96-11.htm