The County Administration has requested a waiver of Section 2.03.103D's two year post-employment restriction to enable a retired employee to return to County employment for a six month period to facilitate matters for which the employee was directly and materially responsible for during the course of official duties as a County employee.
The waiver request is granted. On balance, the undue hardship to the County in enforcing the post-employment provision exceeds the perceived personal benefit to the former employee. A Commission decision to waive the post-employment prohibition so that the former employee may return for a six month period as a private contractor with the County following his retirement significantly ameliorates the obvious and immediate hardship to the County caused by that employee's unforeseen resignation and advances the interests of the public.
An employee with a County department has been one of three members of a long planned project which is scheduled to go into production within the next three weeks. However, because of certain unforeseen financial considerations, the employee gave notice a few weeks ago that he was retiring at the end of 2007 and left County service. A second member of the team has also tendered an unexpected resignation for a date immediately prior to the implementation of the project. The one remaining employee cannot pick up the entire workload. The Administration has filed a written application for a waiver of the two-year post-employment restriction related to the retired employee.
The request advises that the loss of the retired employee's unique skills and knowledge at this critical juncture is having a detrimental impact on the County's ability to complete the project and that the limited period available before the production date does not permit the County to train a replacement. The Administration believes that the employee's skills will be required on a part time basis for six months and the agreed upon fee will be an hourly rate approximately half of that the employee received prior to his retirement.
Code or Prior Opinion:
New Castle County Code Sections
Section 2.03.103 D of the New Castle County Code prohibits a person who has served as a County employee or County official from
represent[ing] or otherwise assisting any private enterprise on any matter involving the County for a period of two (2) years after termination of employment or official status with the County, if the person gave an opinion, conducted an investigation or otherwise was directly and materially responsible for such matter in the course of official duties as a County employee or official. Nor shall any former County employee or County official disclose confidential information gained by reason of public position nor shall the person otherwise use such information for personal gain or benefit.
In this case, the contracted retiree would be performing those same duties for which he was directly and materially responsible during the course of his County employment.
Section 2.03.105 A and B provides authority to the Commission to grant a waiver from the prohibition. It states:
A. Notwithstanding the provisions of this Division, upon the written request of any County Department or of any individual who is or was a County employee or County official, the Commission may grant a waiver of the specific prohibitions governing post-employment restrictions if the Commission determines that the literal application of such prohibition in a particular case is not necessary to achieve the public purposes of this Division or would result in an undue hardship on any current or former employee, official or County Department. Any such waiver may be granted only by written decision of the Commission. All requests of waivers will be handled in an expeditious manner by the Ethics Commission.(sic) Any person who acts in good faith reliance upon any such waiver decision shall not be subject to discipline or other sanction hereunder with respect to the matters covered by the waiver decision provided there was a full disclosure to the Commission of all material facts necessary for the waiver decision.
B. Any application for a waiver, any proceedings and any decision with respect thereto shall be maintained confidential by the Commission provided that:
1. Public disclosure shall be made by the Commission upon the written request of the applicant;
2. The Commission may make such public disclosure as it determines is
3. The Commission shall report to appropriate Federal and State authorities substantial evidence of any criminal violation which may come to its attention; and [code]4. In the event that a waiver is granted, the waiver decision and the record of all proceedings thereto shall be open to public inspection.
State Ethics Code Interpretations
Section 2.03.103 D and Section 2.03.105 A and B are substantially identical to the post-employment prohibition and waiver authority granted to the Delaware Public Integrity Commission (hereinafter "PIC") recited in the Delaware Code at Title 29, chapter 58.1 Since the County Ethics Code is required to be at least as strict as the State Code, interpretations by the PIC are informative. See, 29 Del.C. sec. 5802(4).
The purposes of post-employment provisions have been discussed extensively. In PIC Ethics Bulletin 007, issued May 22, 1998, the Delaware Commission described the State law and made reference to similar federal government provisions:
[L]ike other conflict of interest statutes, post employment provisions are meant to insure public confidence in the integrity of the government. It is said public confidence in government has been weakened by a widespread conviction that government official use their office for personal gain, particularly after leaving the government. There is a sense that a "revolving door" exists between industry and the government [which] leads to a suspicion that personal profit was the motivation. There also is public concern that former employees may use information, influence, and access acquired during government service for improper and unfair advantage in later dealings with that department or agency. Reflecting that concern, post employment laws set a "cooling off period" in certain areas which the ex-employee dealt with while working at the agency. [Citations omitted]. Similarly, the Delaware legislature sought to insure public confidence in the integrity of government. 29 Del.C.. sec.5802. It set a two-year "cooling off period" in areas where the former employee was "directly and materially responsible," etc. 29 Del.C. sec. 5805(d). This limits the actual or perceived unfair advantage in subsequent dealings with a department or agency. Commission Op. No 97-18. Thus, this Commission has held that Delaware's post-employment provision is an attempt to eliminate concerns that when a State employee moves from State employment to private employment that they do not use their former State position to get a "leg-up" on others in the private sector who also seek to deal with the government. Commission Op. No 97-11,. Additionally, it is to avoid the risk that after a State employee moves to the private sector that they will not exercise undo influence on their former colleagues. Commission Op. 96-75.
Conditions for Waiver
New Castle County Council foresaw the probability that situations would arise which would militate against enforcement of the prohibition on post-employment contracts and provided waiver authority to the Commission in section 2.03.105A. A waiver may be granted on either of two standards:
1) if literal application of the prohibition is not necessary to achieve the public purpose of the ordinance, or
2) if application of the prohibition would result in undue hardship to the Department.
If a waiver is granted, the Commission scrutinizes the conditions of a post-employment contract to see if they comport with the purpose of the Ordinance, to promote public confidence in the integrity of government. Those conditions must reflect arms length dealing between the Department and the former employee and avoid any appearance of favoritism or unfair dealing. Compensation must be reasonable for obtaining information acquired through former employment and the contract period must be limited to only that period of time necessary to ameliorate the undue hardship to the Department.
As described above, the public purpose of the Code ordinance is to avoid a justifiable impression that the public trust is being violated by giving unfair advantage and unjust enrichment to a former employee who is capitalizing, for private benefit, on knowledge acquired in a public position. An employment contract granted shortly after retirement or resignation merely because an employee acquired special knowledge in the course of paid County employment could create such an impression. Thus, a waiver should not be granted on such a basis alone since it would create a justifiable impression of unfair advantage or enrichment.
However, a waiver request may be granted despite that possibility if the second standard, "undue hardship", is satisfied. "Undue hardship" has been defined by the PIC as "excessive hardship". This phrase means more than ordinary hardship for the County or the former employee. Ordinary hardship encompasses any loss of a productive, long-term employee which affects continuity and work flow in a government agency.
As noted by the PIC, undue or excessive hardship is not created simply because it would be cheaper to hire a former employee or because continuity may be better maintained. In a number of opinions, the PIC found that if waivers were granted on grounds of cheaper cost or continuity, a former employee would always have a "leg up" and be at a competitive advantage over other vendors. See, e.g., PIC Commission Op. 97-41. Additionally, waivers on the basis of cost or continuity raise the specter of favoritism and unfair dealing. Justifying a contract on such grounds would have the net effect of defeating the legislative purpose of the two year cooling off period, weakening public confidence by creating the impression that government encourages its officials and employees to trade upon their offices for future personal gain.
A waiver may be granted in a situation where the hardship to the Department or to the County is out of the ordinary, even if it could be reasonably argued that the legislative purpose is imperiled by the personal gain to the former employee. For example, undue hardship has been found when the County was obligated to meet a longstanding court-imposed deadline and, because of events beyond its control, was without available resources to advance its position. SeeNew Castle County Commission Waiver 07-01. Also, when there are no other adequate internal or external resources available to a Department to complete an important project without substantial negative impact to the public, undue hardship may exist. SeeNew Castle County Commission Waiver 06-01.
There is no question that the there would be a negative financial impact to the public if the long planned project remains incomplete at the launch date next month. It is also clear that no one can be trained to implement the project in the few weeks remaining before that date, especially in light of the recent loss of two of the three principal team members. Therefore, on balance, the undue hardship to the County in enforcement of the prohibition exceeds the perceived personal benefit to the former employee who will earn less per hour under a County contract than he did at his former County job. A Commission decision to waive the post-employment prohibition for six months so that the County may contract with the former employee significantly ameliorates the obvious and immediate hardship to the County caused by that employee's unanticipated resignation and advances the interests of the public.
A waiver of the two-year post-employment prohibition pursuant to the undue hardship standard is GRANTED for a period of six months.
BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON THIS 9th DAY OF JANUARY, 2008.
John McMahon, Chairperson
1 29 Del. C. sec. 5805(d) Post-employment restrictions.
No person who has served as a state employee, state officer or honorary state official shall represent or otherwise assist any private enterprise on any matter involving the State, for a period of 2 years after termination of employment or appointed status with the State, if the person gave an opinion, conducted an investigation or otherwise was directly and materially responsible for such matter in the course of official duties as a state employee, officer or official. Nor shall any former state employee, state officer or honorary state official disclose confidential information gained by reason of public position nor shall the person otherwise use such information for personal gain or benefit.
29 Del.C. sec. 5708(a) Waivers of restrictions and advisory opinions. (in pertinent part)
(a) Not withstanding the provisions of secs. 5805 and 5806 of this title, upon the written request of any state agency or of any individual who is or was a state employee, state officer or honorary state official, the Commission may grant a waiver to the specific prohibitions contained therein if the Commission determines that the literal application of such prohibition in a particular case is not necessary to achieve the public purposes of this chapter or would result in an undue hardship on any employee, officer, official or state agency. Any such waiver may be granted only by written decision of the Commission. Any person who acts in good faith reliance upon any such waiver decision shall not be subject to discipline or other sanction hereunder with respect to the matters covered by the waiver decision provided there was a full disclosure to the Commission of all material facts necessary for the waiver decision.
(b) Any application for a waiver, any proceedings and any decision with respect thereto shall be maintained confidential by the Commission provided that:
(1) Public disclosure shall be made by the Commission upon the written request of the applicant;
(2) The Commission may make such public disclosure as it determines is required in connection with the prosecution of any violation of this subchapter;
(3) The Commission shall report to appropriate federal and state authorities substantial evidence of any criminal violation which may come to its attention; and
(4) In the event that a waiver is granted, the waiver decision and the record of all proceedings relating thereto shall be open to public inspection.