Advisory Opinion No. 2019-35 Rhode Island Ethics Commission Advisory Opinion No. 2019-35 Approved: June 18, 2019 Re: Janice Ruggieri QUESTION PRESENTED: The Petitioner, a member of the Cranston School Committee, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits her from participating in teachers’ contract negotiations, given that in her private capacity she is employed at a child daycare facility owned by two teachers in the Cranston public school system. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Cranston School Committee, a municipal elected position, is prohibited by the Code of Ethics from participating in teachers’ contract negotiations, given that in her private capacity she is employed at a child daycare facility owned by two teachers in the Cranston public school system. The Petitioner is a member of the Cranston School Committee (“School Committee”). She represents that, as part of her duties, she currently serves on a subcommittee tasked with negotiating the teachers’ contract. In her private capacity, the Petitioner states that she is a preschool teacher at a daycare facility owned by two teachers who are employed as special education teachers in the Cranston public school system and who are, therefore, subject to the terms of the contract under negotiation. Given this set of facts, the Petitioner seeks the guidance of the Ethics Commission regarding whether she may participate in the teachers’ contract negotiations. Under the Code of Ethics, a public official may not participate in any matter in which she has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of her duties in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that she, any person within her family, a business associate or any business by which she is employed or which she represents will derive a direct monetary gain or suffer a direct monetary loss by reason of her official activity. Section 36-14-7(a). The Code of Ethics also prohibits a public official from using her public office or confidential information received through her public office to obtain financial gain for herself, her family, her business associate, or any business by which she is employed or which she represents. Section 36-14-5(d). While the Code of Ethics generally allows public officials to enter into most private business associations, once such associations are formed the Code of Ethics acts to limit the public official’s ability to use her public office to benefit or impact such business associates. This is accomplished by requiring the public official to recuse from participating in matters that are likely to involve or financially impact her business associate or employer. In Advisory Opinion 2006-48, for example, the Ethics Commission opined that a member of the Cranston Zoning Board of Review was prohibited from participating in the Zoning Board’s consideration of an appeal involving the issuance of a building permit, given that the petitioner’s employer owned and used property that directly abutted the subject property. See also A.O. 2016-29 (finding that a member and Chairman of the West Warwick Arctic Village Redevelopment Agency must recuse from any matters before his agency that involve or financially impact himself or his current business associates); A.O. 2011-47 (opining that a member of the Rhode Island Board of Governors for Higher Education was required to recuse from discussion and voting relative to contract negotiations involving his employer); A.O. 2010-16 (opining that a member of the East Greenwich Planning Board, who in his private capacity was the publisher of a local news and information website, was required to recuse when an entity that advertised on his website appeared before the Planning Board or would be financially impacted by actions of the Planning Board because the petitioner was in a current business association with that entity); and A.O. 2009-1 (opining that a member of the Scituate Town Council was required to recuse from matters before the Town Council concerning school related issues involving the interests of his employer which provided busing services to the Scituate School Department). Even when a decision financially impacts a public official’s employer or business associate, recusal may not be required if circumstances justify the application of section 36-14-7(b) (“section 7(b)”) of the Code, referred to as the “class exception.” The class exception states that a public official will not have an interest which is in substantial conflict with her official duties if any benefit or detriment accrues to her, any person within her family, any business associate, or any business by which she is employed or which she represents “as a member of a business, profession, occupation or group, or of any significant and definable class of persons within the business, profession, occupation or group, to no greater or lesser extent than any other similarly situated member of the business, profession, occupation or group, or the significant and definable class of persons within the business, profession, occupation or group.” When determining whether any particular circumstance supports and justifies the application of the class exception, the Commission considers the totality of the circumstances. Among the important factors considered are: 1) the description of the class; 2) the size of the class; 3) the function or official action being contemplated by the public official; and 4) the nature and degree of foreseeable impact upon the class and its individual members as a result of the official action. The Commission has generally declined to apply the class exception to school committee members as well as other public officials during contract negotiations since one does not know at the outset of the negotiations whether or to what extent all the persons subject to the contract will be treated the same. See A.O. 2005-61 (opining that a member of Bristol-Warren Regional School Committee was required to recuse from contract negotiations with teachers’ union given that his spouse was employed by school department and was a member of the union, but he could participate in School Committee’s decision to accept or reject the labor contract as a whole); A.O. 2005-26 (opining that a Newport City Council member could not participate in negotiations with municipal employees’ union given that her uncle was employed by the City and was a member of the union, but she could participate in Council’s decision to accept or reject collective bargaining agreement as a whole). The prohibition against involvement in contract negotiations is based on an understanding that, during negotiations, the impact of decisions as to individual components of a contract can be difficult to predict. During the negotiation period, both the description and the size of a relevant class or subclass may change, as may the amount and nature of any financial impact upon the class or subclass members due to the shifting definitions of groups which may or may not be impacted by proposed contract benefits or provisions. For these reasons, an official’s participation in a contract issue that is seemingly unrelated to a family member, business associate or employer can have a resulting impact on other areas of the contract that would directly affect the family member, business associate or employer. Further, an official’s participation in the negotiations places her in a position in which she may participate in defining the groups to be impacted by the proposed provisions and determine the extent of this impact. See A.O. 2002-66 (opining that the class exception was inapplicable because while all the teachers constituted a significant and definable class, the bargaining agreement at issue did not impact all of the members of the class equally). Accordingly, based on the above representations and consistent with prior advisory opinions, it is the opinion of the Ethics Commission that the Petitioner must recuse from any School Committee or subcommittee teachers’ contract negotiations. Notice of recusal must be filed in accordance with section 36-14-6. However, the Petitioner is permitted to participate in the School Committee and/or subcommittee’s vote to approve or reject the entire teachers’ contract as a whole. The basis for allowing such participation is the proposition that a vote on an overall contract is sufficiently remote from most particular line items so as not to constitute a substantial conflict of interest under the Code of Ethics. See A.O. 2018-49 (opining that a member of the Cumberland School Committee was prohibited from participating in the negotiation of the teachers’ union contract but could participate in the vote to ratify the contract in its entirety, provided that his spouse would be impacted by the contract as a member of a significant and definable class of persons, and not individually or to any greater extent than any other similarly situated member of the class); A.O. 2018-29 (opining that a legislator serving in the Rhode Island House of Representatives could participate in discussions and voting by the House of Representatives relative to the FY2019 State Budget as a whole but had to recuse from participating in any discussions or voting on particular budget amendments or line-items that impacted or specifically addressed his employer’s contracts or finances); and A.O. 2011-14 (opining that a member of the Foster-Glocester Regional School Committee was prohibited by the Code of Ethics from participating in contract negotiations between the School Committee and the teachers’ union, given that her husband was a member of the teachers’ union, but could participate in the School Committee’s decision to accept or reject a contract in its entirety once negotiated by others, provided that her husband was impacted by the contract as a member of a significant and definable class of persons, and not individually or to any greater extent than other similarly situated members of the teachers’ union). Although the Petitioner is permitted to participate in the overall vote to approve or reject the teachers’ contract as a whole, the Commission is aware that a general discussion can quickly devolve into a more narrow review of specific items. Accordingly, the Petitioner must be vigilant about identifying such instances where a general conversation begins to focus on specific issues that are likely to financially impact her employers differently than others subject to the contract. In such circumstances, the Petitioner must recuse from further participation in accordance with section 36-14-6. This Advisory Opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. Under the Code of Ethics, advisory opinions are based on the representations made by, or on behalf of, a public official or employee and are not adversarial or investigative proceedings. Finally, this Commission offers no opinion on the effect that any other statute, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. Code Citations: § 36-14-5(a) § 36-14-5(d) § 36-14-6 § 36-14-7(a) § 36-14-7(b) Related Advisory Opinions: A.O. 2018-49 A.O. 2018-29 A.O. 2016-29 A.O. 2011-47 A.O. 2011-14 A.O. 2010-16 A.O. 2009-1 A.O. 2006-48 A.O. 2005-61 A.O. 2005-26 A.O. 2002-66 Keywords: Private Employment Recusal