Whether an individual who provides professional services to the County under a contract is regarded as a County official or County employee and is within the jurisdiction of the Ethics Commission.
An individual who contracts with the County to provide professional services does not come within the jurisdiction of the Ethics Commission.
A County department has authority to contract with outside attorneys for legal representation under a professional services contract. The contract would be formed pursuant to conditions mandated by the New Castle County Code procurement rules for professional services. The contractor will not be assessed as in a classified or unclassified position by the Human Resources Department. The contractor's compensation will not be set in reference to the County pay plan, the contractor will not receive County fringe benefits, and the contractor will not be identified as an employee of the department in any official records. The County will not make any tax deductions from the compensation paid to the contractor. The contractor will supply all the necessary means to complete the contract except for certain limited and identified costs, and will schedule his or her work under the contract at his or her own discretion in accord with his or her professional judgment. The contractor will have no right to a business relationship with County after the contract terminates.
Code or Prior Opinion:
New Castle County Administrative Code Sections 26.01.002(A), (B), and (C) require the Human Resources department to assign all employees to either classified service or unclassified service. Membership in the classified service is determined by reference to described positions and defined pay scales and includes all employees except those specifically designated as unclassified. All employees denominated as unclassified are listed in certain other position categories found in the official pay plan.
County attorneys are assigned to both the classified and unclassified employee ranks depending on position. The County Attorney, an appointed County official, is an unclassified employee and the chief legal advisor for the County and manager of the Office of Law. See Section 2.05.514. The Administrative Code at Section 2.03.101(A) provides for the appointment of "Assistant County Attorneys as may be provided for from funds in the annual operation budget and from other funds such as those in the capital budget and in the budgets of other County agencies." All Assistant County attorneys are classified either as permanent employees under the merit system or as unclassified employees serving at the pleasure of the Executive. These individuals must become County residents following appointment, are paid on a regular basis, and are subject to State and Federal tax withholding.
New Castle County procurement laws govern the retention of outside professional services. Code Section 2.05.502(B)(6) generally defines professional services as "the type of services that are not readily subject to competitive bidding because specifications cannot be properly drafted. . .." Section 2.05.502(B)(1) defines compensation for professional services not as wages or salary but as "the money or other thing of value paid by an agency for professional services". Subsection (B)(5) lists the substantial requirements for contract or purchase of such services and subsection (6) covers the exception from bid requirements specifically for purchase of professional legal services.
Ethics Code Section 2.03.102 defines County official as "any person elected or appointed to any County office, board, commission or the New Castle County Audit Committee provided, however, for purposes of Sections 2.03.103(B)(2), 2.03.103(C),, 2.03.104(C), 'county official' does not include any member of a board or commission which operates solely in an advisory capacity, and whose members are not compensated, other than reimbursement for expenses."
Black's Law Dictionary (West, 5th ed., 1979) defines Office as "A right, and correspondent duty, to exercise a public trust. An employment on behalf of the government in any station or public trust, not merely transient, occasional, or incidental. . . . Although an office is an employment, it does not follow that every employment is an office. A man may be employed under a contact, express or implied, to do an act, or to perform a service, without becoming an officer. . . ."
Section 2.03.102 also defines County employee as "any person who receives compensation as an employee of a County department or row office." Black's defines Employee as "A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed. . . . One who works for an employer; a person working for salary or wages. Generally, when person for whom services are performed has right to control and direct the individual who performs services not only as to result to be accomplished by work but also as to details and means by which result is accomplished, individual subject to direction is an employee."
The Restatement (Second) of Agency sec. 220(1) (1958) defines a servant [employee] as "[A]s a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control." In matters of unemployment compensation, the Delaware Code at Title 19, section 3302 (10)(k) states that an exception to a determination of an employment relationship exists when:
(i) Such individual has been and will continue to be free from control and direction in connection with the performance of such service, both under the individual's contract for the performance of services and in fact; and
(ii) Such service is performed either outside the usual course of the business for which the service is performed and is or is performed outside of all the places of business of the enterprise for which the service is performed; and
(iii) Such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
The Delaware Supreme Court, in discussing the purpose of state employment laws, stated "the Legislature did not intend the Wage Payment and Collection Act to include those persons or firms who specifically contract to render professional services in their own individual capacity, rather than as a member of the firm or business of the other party. Just as a lawyer is not ordinarily an employee of his client and an architect is not ordinarily an employee of developers, a subcontractor is not an employee of a general contractor." Fairfield Builders, Inc. v. Vattilana, 304 A.2d 58, 61 (Del. 1973).(suit by subcontractor against general contractor for wages).
Those individuals whose professional services are retained under a contract with a County department do not fit the Ethics Code definition of County official which requires that an individual be appointed or elected to an office, board or commission. The only possible argument that could be made here is to claim that the purchase of services is somehow an appointment to office. The Commission rejects that attempt to circumvent the commonsense meaning expressed in the definition. Although there are "appointments" to the Office of the County Attorney, County Council specifically delineates and limits the numbers of such appointments in the County pay plan and the Administration defines the duties of those appointees by classification and includes them in the category of employees. They are paid a salary subject to tax withholding on the same regular basis as other employees and receive the same benefits.
Only the County Attorney is directly appointed as the holder of the Office created in the Code. He has the authority to hire his assistants who become subject to his direction and control. In contrast, individuals whose services are purchased for a limited period pursuant to a contract are not appointed or hired to the Office of Law. They are compensated without reference to the pay plan governing County service and their duties are defined by the contract, not by reference to a classification system or to the manner in which work is required to be performed in the particular County office. Additionally, they are not defined in their professional status as government employees but in relation to the law firms they manage or in which they are employed. As pointed out in Black's Law dictionary, although an office is an employment, it does not follow that every employment is an office.
Although the Ethics Code definition of County employee is not as explanatory as that for County official, the better reasoned view is that purchased services made pursuant to a professional services contract do not create an employee/employer relationship. The individuals described here will perform particular and limited services under a short-term contact, and there is no intention to form an employer-employee relationship, with its corresponding and continuing duties and responsibilities, for example, the requirement of County residence applicable to attorneys in the Law Department. Additionally, the potential contractor is customarily engaged in an independently established profession and will not perform his or her duties in a County building or office. As a professional, the contractor is expected to perform his or her duties in accord with the tenets of his or her profession, not pursuant to the detailed direction of the County. The contracts for a service for a particular nonrecurring event or period are executed pursuant to a Procurement Department procedure and not through the Human Relations department.
The County negotiates compensation for the provider without regard to its classification or pay plan and does not reserve the right in its contracts to physically control the conduct of the contractor or specify the details of the service provided. Most importantly, the relationship with contractor does not reflect the ordinary County employee indicators such as job classification, tax withholding, fringe benefits, scheduled hours, employment guarantees, or regular salary payments. The primary focus in these professional service contracts is not just the purchase of time from the contractor for a guaranteed wage but the acquisition of unique professional skills and judgment from the contractor which the County desires to secure for a defined interval. For the purposes of the Ethics Code, the County is not an employer of the contractor under these contracts.
The Commission finds that individuals performing work for the County pursuant to professional services contracts are neither County officials nor County employees within the meaning of the Ethics Code.
In issuing this Advisory Opinion, the Ethics Commission is applying the New Castle County Code of Ethics, which establishes the minimum level of ethical conduct required of County officials and employees. The Commission cautions, however, that each County department, board, or other unit of County government is free to, and may impose as part of its own policy, additional or greater restrictions on its officials and employees than those set forth in this Opinio
BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON THIS 11th DAY OF MAY, 2005.