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Advisory Opinion No. 00-5: Determination of "former agency" of a former employee of the Uninsured Employers Fund of the Workers Compensation Board, for purposes of the application of the post-employment restrictions of Public Officers Law §73(8)(a).

INTRODUCTION

The following advisory opinion is issued in response to an inquiry from [ ], a Senior Attorney with the Uninsured Employers Fund ("Fund") of the Workers' Compensation Board ("Board") concerning the application of the post-employment restrictions of Public Officers Law §73(8)(a). Specifically, the Commission is asked to determine whether the "former agency" of Fund employees for purposes of the two year bar includes the Board.

Pursuant to its authority under Executive Law §94(15), the Commission renders its opinion that, for purposes of Public Officers Law §73(8)(a), the Fund is within the Board, rather than separate from and independent of it. Therefore, Fund employees are prohibited from appearing or practicing before the Board or rendering services for compensation on any matter before the Board, for a period of two years after termination from State service.

BACKGROUND

The Fund was created to provide for the payment of compensation awards made against uninsured employers pursuant to the Workers' Compensation Law.(1) Whenever it appears, upon the filing of a claim for workers' compensation benefits, that the employer may have failed to secure proper payment of compensation, the Fund is given notice of all proceedings involving the claim.(2) Fund attorneys may investigate such claims on behalf of the Fund and present facts at hearing. When an award of compensation is made against an uninsured employer, the Fund pays the claimant directly and the employer becomes liable to the Fund for reimbursement of the payment. The Fund may apply to the Board for a modification, rescission or review of an award. Where the Fund appeals a Board decision to the Appellate Division of the Supreme Court, Third Department or to the Court of Appeals, the Board is represented by the Office of the Attorney General, while the Fund is represented by its staff attorneys.

The Fund is operated and administered by the Board.(3) The Chair of the Board is required by statute to "appoint an employee of the Board who is an attorney . . . to serve as the representative of the Fund . . . and shall assign to assist him in the discharge of his duties as such representative . . . such other employees of the Board as the Chairman deems necessary for this purpose."(4) The representative of the Fund must also apply to the Chair for authority to hire and defray the cost of medical and other expert witnesses as may be necessary to properly defend a claim against the Fund.

The Chair of the Board is responsible for ascertaining the financial needs of the Fund and must each year transfer to the Fund from its budget an amount which will raise the net cash asset of the Fund to the level of either the amount spent by the Fund in the prior year or an amount estimated to be expended in the succeeding year, whichever is greater.(5) The Commissioner of the Department of Taxation and Finance ("Commissioner") is the custodian of the Fund. Disbursements from the Fund are paid by the Commissioner, upon receipt of vouchers signed by the Board Chair.(6)

Administratively, the Fund operates under the Board's Bureau of Compliance and Regulatory Services, with the designated representative of the Fund reporting to the Director of that Bureau. The Fund does not operate under a separate agency code. Fund employees and operations are physically located in Board office space. Staff attorneys to the Fund regularly deal with Board attorneys and administrative law judges in carrying out their State duties.

[The requesting individual] is a Senior Attorney with the Fund. In this capacity he is responsible for attending Board hearings on behalf of the Fund and arguing before Board Judges. Should Fund attorneys disagree with a Judge's decision, they are responsible for appealing that decision to the Board. During the appeal process Fund attorneys appear before the Board and argue on behalf of the Fund. [The requesting individual] argues that a compelling reason to find the Fund independent of the Board is that the Fund argues against the Board in appellate cases. As such, a finding by the Commission that the Fund is not independent of the Board could call into question the fairness of compensation proceedings and decisions where the apparent "adversaries" are employed by the same agency. [The requesting individual] suggests that such a finding would also create an unavoidable "appearance of impropriety" in violation of the code of ethics.

APPLICABLE STATUTE

Public Officers Law §73(8)(a)(i) 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 two year absolute bar 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 "former agency" of Fund employees.

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]. (Footnotes omitted)

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 is separate from the New York State/CSEA Labor-Management 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. Most recently, in Advisory Opinion No. 99-16, the Commission concluded that because the Board is centrally operated and administered, its regional offices cannot stand alone as separate State agencies for purposes of the post-employment restrictions.

Here, the Fund does not have the independence enjoyed by the Tax Appeals Tribunal, the Liquidation Bureau or the Labor/Management Committee. The Fund, unlike the Tribunal, is not defined in statute as separate from and independent of the Department.(7) In addition, the Fund is financially supported by and administratively operates under the auspices of the Board. By statute, the Chair appoints "an employee of the Board . . . to serve as the representative of the Fund . . ." as well as all other Fund personnel [emphasis added]. The Fund has not been assigned an independent, five-digit agency code by the Office of the State Comptroller ("OSC"). These codes are used by OSC to identify freestanding agencies for payroll, accounting, appropriation and auditing purposes. Rather, the Fund operates under the Board's Bureau of Compliance and Regulatory Services, part of the Workers' Compensation program, one of three Board programs. The Fund does not submit a budget request independent of the Board nor is it physically segregated from other Board operations. Thus, because the Fund cannot be statutorily or operationally distinguished from the Board, the Commission determines that the Fund is part of the Board for purposes of the two year bar. Accordingly, for a period of two years following their separation from State service, Fund employees may not appear or practice before the Board or render services for compensation on a matter before the Board.

While [the requesting individual] makes an argument that the adversarial nature of the relationship between the Fund and the Board should warrant a contrary determination, it is not decisive. The Commission notes that the Fund's enabling legislation, most recently amended in 1991, does not support [the requesting individual's] view. Despite the arguable adversarial relationship between the Fund and the Board, the Legislature has not chosen to give to the Fund independence and autonomy from the Board as extensive as what it has given to the Tax Appeals Tribunal.

CONCLUSION

The Commission concludes that the Fund is within the Board, rather than separate from and independent of the Board, for purposes of Public Officers Law §73(8)(a). Fund employees are therefore prohibited from appearing or practicing before the Board or rendering services for compensation on any matter before the Board, for a period of two years after 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:

Robert J. Giuffra, Jr.
Henry G. Gossel
Lynn Millane
O. Peter Sherwood, Members

Dated: October 6, 2000


Endnotes

1. Workers' Compensation Law §26-a.

2. Workers' Compensation Law §26-a(6).

3. Practice Commentary - Workers' Compensation Law §26-a.

4. Workers' Compensation Law §26-a(5).

5. Workers' Compensation Law §26-a(2)(f).

6. Workers' Compensation Law §26-a(3).

7. 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."

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