Montclair State University

On-line Ethics Training: Outside Activities

More information can be found in the relevant section of The Plain Language Ethics Guide. Because the rules have changed since this module was created, be sure to read about Serving in a Scholarly Capacity when reviewing this module.

Statutory Standards

The Commission has addressed the issue of outside activities under the application of standards detailed in the New Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-12 et seq. The applicable statutory provisions are listed below.

Section 16(b) prohibits a State employee, or any partnership, firm, or corporation in which he has an interest, from representing, appearing for, or negotiating on behalf of, or agreeing to perform any of the aforementioned activities on behalf of, any person or party other than the State in connection with any cause, proceeding, application, or other matter pending before any State agency. “Interest” is defined in Section 13(g) of the Conflicts Law.

Section 17.2(b) prohibits certain casino-related activities. For example, a State employee may not hold employment with the holder of or applicant for a casino license unless the Commission grants a waiver. A waiver of the prohibition can be granted if, in the Commission’s judgment, such employment will not interfere with the responsibilities of the State employee and will not create a conflict of interest or reasonable risk of the public perception of a conflict of interest.

A State employee who is included in the definition of “person” in Section 17.2(a) is not permitted to hold employment with a casino license holder or applicant and is not eligible for a waiver. Members of the immediate family of a State employee, or of a person, may hold employment with the holder of or applicant for a casino license by obtaining a waiver from the Commission. An immediate family member is defined as a spouse, child, parent, or sibling residing in the same household.

Section 19(a) prohibits a State employee from entering into a contract valued at $25 or more with any State agency. This prohibition also extends to partners or any corporation that the State officer or employee controls or in which he owns or controls more than 1% of the stock. Section 19 exempts only three categories of contracts from this general prohibition:

1. contracts made after public notice and competitive bidding;

2. contracts that may be awarded without public advertising and competitive bidding pursuant to N.J.S.A. 52:34-10 or similar provisions; and

3. contracts of insurance entered into by the Director of the Division of Purchase and Property, Department of the Treasury, pursuant to N.J.S.A. 52:27B-62.

Section 23(e)(1) prohibits a State employee from engaging in any business or transaction that is in substantial conflict with the proper discharge of his or her official duties.

Section 23(e)(5) prohibits a State employee from undertaking employment or service reasonably expected to impair his or her objectivity and independence of judgment.

Section 23(e)(7) prohibits a State employee from knowingly engaging in conduct that creates an appearance of impropriety.

Section 24 prohibits a State employee from receiving compensation from a source other than the State for a matter related to his or her official duties.

Section 25 prohibits a State employee from disclosing information not generally available to the public that is acquired in the course of his or her official duties.

The administrative rule N.J.A.C. 19:61-6.7(b) details the conditions under which a State employee may accept compensation for published works.

Criteria for Approval of Outside Activities

The following issues must be examined in determining whether an outside activity can be approved:

• Does the outside position require representation before a State agency?

• Does the outside position involve a casino licensee or applicant for a casino license?

• Does the outside activity involve contracting with a State agency?

• Is there a significant overlap in the duties and responsibilities of the two positions?

• Does the State employee’s agency have control, supervision, or jurisdiction over the outside entity?

• Does the outside entity receive grants from or contract with the State employee’s agency?

• Does the outside activity involve a published work?

• Does the outside interest involve political activity?

Representation Before a State Agency

Are there any exceptions to the prohibition against a State officer or employee representing a party other than the State before a State agency? Yes. Under Section 16(c), State officers and employees are not prohibited from representing a party other than the State in any of the following instances:

• in connection with a matter pending before a court of record;

• in connection with a workers’ compensation claim;

• in connection with the determination or review of transfer, inheritance, or estate taxes;

• in connection with the filing of corporate or other documents in the Office of the Secretary of State;

• representation before the Division on Civil Rights, the State Board of Mediation, the Public Employment Relations Commission, or the Unsatisfied Claim and Judgment Fund Board; or

• representation before any State agency on behalf of a county, municipality, or school district or any authority, agency, or commission thereof except where the State is an adverse party, and provided the State employee does not hold office or employment in the State agency where the matter is pending.

Does representation involve only personal appearances before a State agency on behalf of a party other than the State? No. Under Commission precedent, the following also constitute representational activities:

• correspondence to a State agency on behalf of a third party,

• telephone calls to a State agency on behalf of a third party, and

• a State officer’s or employee’s signature on an application or other document submitted to a State agency on behalf of a third party (e.g., engineering reports).

Casino License or Applicant for a Casino License

If the outside activity involves a casino licensee or applicant for a casino license, contact the Commission for a waiver or guidance.

Contracting with a State Agency

State employees must receive the approval of the Commission prior to contracting under any of the Section 19(b) exceptions. The Commission has approved many requests over the years by State employees to bid on contracts that are subject to public notice and competitive bidding. Such requests are generally approved if the contract in question is not with the State employee’s own agency.

Outside Activity Licensed or Regulated by the State

Pursuant to Section 23(e)(2) of the Conflicts Law, all activities requiring occupational, trade, business, or professional licenses issued by a State agency must be reported to the Commission. Such licenses include, but are not limited to, attorney, physician, nurse, pharmacist, engineer, real estate, insurance, private detective, and teacher. If the license is inactive, please so note.

Significant Overlap in the Duties and Responsibilities of the Two Positions

The Commission considers such factors as whether:

• the positions deal with the same general area,

• the duties and responsibilities of the two positions are similar, and/or

• the possibility exists that there are individuals or entities that the State employee may deal with in both positions.

State Employee’s Agency Having Control, Supervision,
or Jurisdiction over the Outside Employer

The Commission has determined that State employees may not engage in secondary employment when their activities are subject to regulation or inspection by the State agency for which they work.

Outside Entity Receiving Grants from or
Contracting with the State Employee’s Agency

The Commission has determined that, in the absence of enabling legislation, codes of ethics, or other applicable guidelines, regulations, or policies that prohibit such activity, all outside employment situations involving grant or contractual relationships must be evaluated by taking into account factors such as:

• whether the position in question was created as a result of funds provided by the State employee’s agency,

• whether the State employee is in a policy-making or decision-making position, and

• the duties and responsibilities of the State employee in connection with the contractor or grant recipient.

Published Works

Under N.J.A.C. 19:61-6.7(b), Section 24 of the Conflicts Law, and Commission precedent, a State employee may accept compensation for published works subject to numerous conditions. Among those conditions are that:

• there is no prohibition governing such activity in the agency’s enabling legislation or code of ethics,

• the published work must not use or disclose information not generally available to the public,

• the State employee must indicate that his or her views do not represent those of the State, and

• the published work must not have been prepared as part of the State employee’s official duties.

Political Activity

State employees may be involved in partisan political activities provided that there is no provision in the agency code of ethics prohibiting such activities. State employees may not use State time or State resources in pursuit of such activities, however. As with other outside activities, the State employee must obtain the prior approval of the departmental ethics liaison officer. The Department of Personnel has issued regulations that address the political activities of State employees.

General Caveats

The Commission generally provides the following advice to individuals with approved outside activities:

• State time may not be used for outside activities.

• State resources — including but not limited to telephones, facsimile machines, e-mail, copy machines, mail service, and office supplies — may not be used for outside activities.

• Coworkers and/or individuals with whom the State employee comes in contact in his or her official capacity may not be solicited as clients for outside activities, including but not limited to real estate services, cosmetic sales, consulting services, and legal services.

• State employees are also prohibited from referring clients to any firm with which they are associated.

Agency Codes of Ethics

Pursuant to N.J.A.C. 19:61-2.2(a), all State agencies are required to include in their codes of ethics a requirement that all employees annually disclose outside employment and/or business interests. All disclosures must be forwarded to the Commission for review. Outside activities disapproved by a State employee’s agency may be appealed to the Commission.