Ethics Commission       Directory of Advisory Opinions       Directory of Laws and Regulations        N.Y.S. Department of State  


New York State Ethics Commission
Alfred E. Smith State Office Bldg.
80 South Swan Street, 11th Floor, Suite 1147
Albany, NY 12210


Advisory Opinion No. 02-3 A Department of Health (“DOH”) retiree may be hired as an employee by Health Research Incorporated, DOH’s closely affiliated not-for-profit research corporation, without violating the revolving door provisions of Public Officers Law §73(8).

INTRODUCTION

The following advisory opinion is issued in response to a request submitted by Donald P. Berens, Jr., General Counsel at the New York State Department of Health (“DOH”), concerning application of the post employment restrictions contained in Public Officers Law §73(8)(a)(i) to a DOH employee, [ ], upon retiring from DOH and commencing work with Health Research Incorporated (“HRI”), a closely affiliated not-for-profit corporation created under State Finance Law §53-a(5)(d).

Pursuant to its authority under Executive Law §94(15), the Commission renders its opinion that the post employment restrictions of Public Officers Law §73(8)(a)(i) do not preclude a DOH retiree from working as an employee for HRI.

BACKGROUND

DOH initially established HRI as a not-for-profit corporation, primarily to serve the research programs of the Roswell Park Cancer Institute.  HRI also now serves DOH research programs located at the Wadsworth Center for Laboratories and Research, the AIDS Institute and elsewhere.  HRI’s main purposes are to assist in developing and increasing DOH facilities, to solicit, accept and administer federal, State and private financial resources to support DOH; research and to finance and conduct related research studies.  In addition, HRI administers funds from individual donors, estates and court settlements.  DOH and HRI operate under terms of an operating agreement which specifies the rights and obligations of the parties.  The Commissioner of Health serves as HRI’s president, and the majority of HRI’s Board of Directors is comprised of DOH officials. 

[The former State employee] was formerly employed as a “Publications Production Assistant” at DOH.  He retired from State service on [date].  HRI hired [the former State employee] upon his retirement from DOH to work on a part-time basis, in conjunction with DOH employees, performing essentially identical functions to his former position with DOH, processing publications for printing.  He works 15-20 hours per week for approximately six months, and is paid approximately [one-half his former salary].  The current inquiry is whether the performance of these services for HRI violates the provisions of the two year bar.

APPLICABLE STATUTE

The statutory language setting forth the two year bar is found in Public Officers Law §73(8)(a)(i), which states:

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.

These restrictions set 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 bar prohibits former State officers and employees, for two years following their separation from State service, from (1) appearing or practicing before their former agency, and (2) rendering services for compensation on any matter before their former agency (the so-called “back room services” clause).

DISCUSSION

In Advisory Opinion No. 95-2, the Commission allowed a former employee of the Office of Mental Retardation and Developmental Disabilities (“OMRDD”) to transfer to the payroll of that agency’s closely affiliated corporation, the Research Foundation for Mental Hygiene. The Commission noted that the purpose of the post employment provisions of Public Officers Law §73(8) is:

[t]o preclude the possibility that a former State employee may leverage his or her knowledge, experience and contacts gained in State service to his or her advantage or that of a client, thereby securing unwarranted privileges, considerations or actions.

In examining the circumstances when an employee transfers to a State agency’s closely affiliated research arm, the Commission determined that such a transfer does not secure unwarranted privileges for the employee, as the employee’s skill and knowledge will continue to be used to benefit the agency.  Thus, the purposes of §73(8) are met without imposing any restrictions.

The Commission concluded for purposes of §73(8)(a) that “[e]mployees of the Foundation are considered to be employees under the jurisdiction of the State agency involved to avoid the application of the revolving door restrictions,” and permitting such transfer would provide State agencies necessary flexibility in shifting employees from one payroll to another depending upon available funding sources. The Commission further held that a more rigid application of Public Officers Law §73(8) would create an unworkable situation, rather than fostering the State agency’s ability to support its research entities through utilization of the closely affiliated corporations. Application of the revolving door restrictions after the employee transfers out of the closely affiliated corporation and into the private sector can address any concern that an employee may benefit from the knowledge, experience, and contacts gained in State service.

That same year, in Advisory Opinion No. 95-17, the Commission discussed application of the two year bar to a retired Department of Social Services employee who sought to work for the State University of New York Research Foundation, the closely affiliated corporation for the State University of New York, on a contract with his former agency.  The Commission precluded the employment as a violation of the revolving door provision.  In a footnote, it noted in dicta that its conclusion reached in Advisory Opinion No. 95-2 “should not be deemed applicable to retirees” (See footnote 4, Advisory Opinion 95-17).

Having considered the issue, the Commission declines to follow the dicta in footnote 4 of Advisory Opinion No. 95-17.  If [the former State employee] had transferred to HRI prior to retirement, Advisory Opinion No. 95-2 clearly recognizes there would be no violation of the two year bar.  If footnote 4 of Advisory Opinion No. 95-17 is read to prohibit such a transfer once an employee achieves retirement status, an inconsistency is created in the application of the two year bar.  There is no greater danger of a State employee using her position to create – with a closely affiliated corporation – a favored status for herself upon retirement than there would be had the individual left State service prior to retirement.1 Most importantly, in both circumstances, the employee’s skill and knowledge will continue to be used for the benefit of the State agency.

Allowing [the former State employee] to work as an employee for HRI upon his retirement does not run afoul of the two year bar and is consistent with the Commission’s precedent of permitting former employees to be rehired by their former State agency (See, Advisory Opinion No. 90-21). The Commission’s opinion herein is merely an extension and application of that holding.

CONCLUSION

The Commission concludes that the post employment restrictions of Public Officers Law §73(8)(a)(i) do not preclude a DOH retiree from working for HRI, DOH’s closely affiliated corporation, during the two year post employment period.

This opinion, unless and until 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:

Paul Shechtman, Chair
Robert J. Giuffra, Jr.
Carl H. Loewenson, Jr.
Lynn Millane
O. Peter Sherwood, Members

Dated:  June 19, 2002


1 Retirement and Social Security Law §§211 and 212 specifically allow for re-employment of a retiree by a public entity, but limit earnings for such persons while drawing their State pension to $20,000 for calender year 2002.  While HRI is not a State agency, it does participate in the New York State Retirement System, and thus is subject to the certification and earnings limitation of the Retirement and Social Security Law.  This limitation alleviates any potential, real or perceived, for creation of a “golden parachute” upon retiring from State service.

  Ethics Commission       Directory of Advisory Opinions       Directory of Laws and Regulations        N.Y.S. Department of State