School Ethics Commission Clarifies Conflict of Interest Rules in Negotiations, Superintendent Issues

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An ongoing concern for both board members, school administrators and district employees is the appropriate approach to potential conflicts of interest, what circumstances warrant recusal, and when it is appropriate to participate at various stages of the collective negotiations process.  Both board members and school officials covered by the School Ethics Act, N.J.S.A. 18A:12-28, have sought to comply with the Act by seeking guidance from the Commission through its Advisory Opinions process N.J.S.A. 18A-12-31.  Since its establishment, the School Ethics Commission has issued a variety of rulings concerning these issues.  Unfortunately, some rulings have led to further confusion among educators and board members.  In addition, regulations enacted by the State Board of Education in 2009 and subsequent decisions by the State Board of Education to overrule certain Commission decisions have further muddied these waters.

On September 26, 2017, the Commission sought to remedy any confusion in the field by clarifying certain core holding in its Advisory Opinion A24-17.

The specific issues of the matter involved:

  1. What disclosure obligations exist for a board member (Personal/Relative and Financial Disclosure) where the board member’s sister and sister-in-law were employed directly by an outside company that has an existing contract for services (provision of substitutes and aides) with a district?
  2. Based on these facts, could that board member participate in in the negotiations, voting, budgets or collective bargaining matters of the board?

The Commission resolved these issues by advising the board member as follows:

  1. The Commission held that the board member DID have an obligation to disclose that he had a relative (defined as spouse, natural or adopted child, parent or sibling of a school official) that is employed by a company that had a current contract with the board of education.  N.J.S.A. 18A:12-25(a)(3) requires such disclosure of whether a school official or relative is employed by, receives compensation from, or has an interest in a business that is party to a contract with the board.
  2. On the issue of whether a conflict of interest exists, the Commission advised that based upon the facts presented, no broad-based conflict existed.  However, the Commission noted that the board member is prohibited from securing any unwarranted privilege, advantage or employment for his sister’s benefit. N.J.S.A. 18A:12-24(b).  In the absence of such behavior, the board member was advised that he could participate in any and all issues concerning District personnel, the superintendent and the budget. He could not act in any way concerning any issue involving his sister and her employer, an outside company.

The Commission did note that IF the board member’s sister was a direct employee of the school district, the rules would be different.  In such circumstances, the board member would be prohibited from participating in all aspects of negotiations with the local union, including the vote on the collective bargaining agreement, and all prohibiting from engaging in all issues related to the superintendent including hiring or evaluation.

Clarifying Discussion

In light of the nature of the board member’s inquiry and the inaccurate advice the board member was given in this matter, the Commission took it upon itself to review the existing decisions and advisory opinions and to issue clarification.

It also stated that any prior inconsistent decisions and opinions are now superseded by this new guiding language.

Referencing the expanded definition of relative  in N.J.A.C. 6A:23A-1.2 (to include civil union partners, domestic partners and step-relatives, and half- relatives) and the requirement in new regulations to adopt specific nepotism policies in N.J.A.C. 6A:23A-6.2(a)(5), the Commission clarified its holdings/principles in prior case law as follows:

  • Absent another conflict, a Board member who is currently a member of any statewide public teachers or administrators union, but in another school district, cannot participate in any aspect of negotiations until the memorandum of agreement, including salary guides and the total compensation package, has been attained.  Participation by the Board member in any aspects of negotiations prior to this time implicates N.J.S.A. 18A:12-24(b) and N.J.S.A. 18A:12-24(c), and possibly other subsections.  After the memorandum of agreement, including salary guides and the total compensation package, has been attained, the Board member can, absent another conflict, vote on the collective negotiations agreement;
  • A Board member with an immediate family member who is employed in the District, cannot participate in any aspect of negotiations, including the vote on the collective negotiations agreement following attainment of the memorandum of the agreement.  Participation by a Board member in these circumstances implicates N.J.S.A. 18A:1224(b) and N.J.S.A. 18A:12-24(c), and possibly other subsections;
  • Absent another conflict, a Board member with an immediate family member who is currently a member of any statewide public teachers or administrators union, but in another school district, cannot participate in any aspect of negotiations until the memorandum of agreement, including salary guides and the total compensation package, has been attained.  Participation by the Board member in any aspects of negotiations prior to this time implicates N.J.S.A. 18A:12-24(b) and N.J.S.A. 18A:12-24(c), and possibly other subsections.  After the memorandum of agreement, including salary guides and the total compensation package, has been attained, the Board member can, absent another conflict, vote on the collective negotiations agreement;
  • A Board member with a relative who is employed in the District, cannot participate in any aspect of negotiations, including the vote on the collective negotiations agreement following attainment of the memorandum of the agreement.  Participation by a Board member in these circumstances implicates N.J.S.A. 18A:12-24(b); and
  • Absent another conflict, a Board member with a relative who is currently a member of any statewide public teachers or administrators union, but works in another school district, can participate in all aspects of negotiations, including the vote on the collection negotiations agreement following attainment of the memorandum of agreement.
  • In addition to participating in contract negotiations, a Board member who has a relative or immediate family member employed in the District would also be prohibited from participating in any and all issues related to the superintendent, including the search, contract approval, and evaluation of performance.    However, absent another conflict, a Board member who is a member of the same statewide union as the local union, but in another school district, and a Board member with an immediate family member or relative who is a member of the same statewide union as the local union, but in another school district, is not, per se, prohibited from participating in any and all matters related to the superintendent.

The Commission issued the following chart as an easy-to-understand representation of these principles:

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