Section 112.3185(5), Florida Statutes, does not prohibit a former employee of a State government department from being employed (at arms length by a bona fide company during the first year after leaving his public position) delivering contractual services to his former public agency. CEO 93-2 is referenced.[1]
QUESTION:
Would Section 112.3185(5), Florida Statutes, which prohibits a former employee of a public agency from being paid more money for contractual services provided to the agency, by the agency (during the first year after his severance from the agency), than the amount of his annual salary from the agency on the date of cessation of his public employment, prohibit your being employed at arms length by a bona fide company delivering services to your former agency?
Your question is answered in the negative.
By your letter of inquiry and materials submitted to or generated by our staff, we are advised that you are retired from employment with a department of State government, [2] having completed the Deferred Retirement Option Program (DROP) on December 31, 2004, and that you are considering accepting employment with a company [3] desirous of contracting with agencies of State government, including your former department, to perform services. Further, we are advised that in your employment with the company, you would be delivering services for it to State agencies, including your former agency. More particularly, we are advised that the company would contract with a State agency to provide services to the agency and that the company would deliver the services to the agency via employees (or independent contractors) such as yourself, [4] many of whom would be retired State employees. [5]
Section 112.3185(5), Florida Statutes, [6] provides:
The sum of money paid to a former agency employee during the first year after the cessation of his or her responsibilities, by the agency with whom he or she was employed, for contractual services provided to the agency, shall not exceed the annual salary received on the date of cessation of his or her responsibilities. The provisions of this subsection may be waived by the agency head for a particular contract if the agency head determines that such waiver will result in significant time or cost savings for the state.
We find that your working for the company providing services to your former agency would not be prohibited by Section 112.3185(5). It is the intent of the provision that it only apply to situations in which the former employee contracts with the former public agency. CEO 93-2. Further, in CEO 93-2, we found that the provision did not apply in a situation in which a former employee left a public agency to work for a business entity contracting with the agency, emphasizing that the statute addressed the sum of money paid to the former employee by the agency. Similarly, in your proposed situation, the company (your private employer), and not your former public agency, would be paying you. Additionally, we recognize, as we did in CEO 93-2, that a fraudulent or "straw man" contract could be set up to circumvent the prohibition; but, as in the previous opinion, we do not find such to be the case regarding your inquiry. [7]
Accordingly, we find that Section 112.3185(5), Florida Statutes, does not prohibit your working for the company to deliver services to your former agency under the company's contract with the agency, within one year of your leaving public employment. [8]
ORDERED by the State of Florida Commission on Ethics meeting in public session on July 21, 2005 and RENDERED this 26th day of July, 2005.
__________________________
Joel Gustafson
Chairman
[1]Opinions of the Commission on Ethics can be viewed on its website: www.ethics.state.fl.us.
[2]Department of Veterans' Affairs.
[3]DES of Florida, LLC.
[4]Your inquiry states that your delivery of services would be through a "letter of purchase order" executed by the agency, pursuant to a master services contract between the agency and the company, that would identify you and specify the scope of work and billing rate for the given project; and that the company would bill the agency "strictly for hours worked."
[5]The instant inquiry indicates that there are a number of persons in situations similar to yours who await the guidance of this opinion.
[6]The applicable definition of "agency" is found at Section 112.3185(1)(b), Florida Statutes, and Section 112.3185(1)(a), Florida Statutes, provides that "'contractual services' shall be defined as set forth in chapter 287."
[7] However, as we pointed out in CEO 93-2, Sections 112.3185(3)and (4), Florida Statutes, can apply in situations in which one works for a company (and is paid by the company) in connection with contracts that the company has with his or her former public agency, without the necessity of the former agency paying the former employee. Nevertheless, nothing in your inquiry indicates the applicability of the statutes to your proposed situation because your situation does not indicate that you had any role regarding the company's proposed contract with your former agency while you were employed at your former agency. These statutes provide:
No agency employee shall, after retirement or termination, have or hold any employment or contractual relationship with any business entity other than an agency in connection with any contract in which the agency employee participated personally and substantially through decision, approval, disapproval, recommendation, rendering of advice, or investigation while an officer or employee. [Section 112.3185(3), Florida Statutes.]
No agency employee shall, within 2 years after retirement or termination, have or hold any employment or contractual relationship with any business entity other than an agency in connection with any contract for contractual services which was within his or her responsibility while an employee. [Section 112.3185(4), Florida Statutes.]
[8]Although you represent that "[u]nder no circumstances would [you] be compensated at a rate greater than that which was paid to [you] prior to retirement," our finding herein is based in your not being paid by your former agency. Assuming arguendo that you were paid by the company more in the first year after you left public employment than your annual salary at severance from public employment, we find that the statute still would not prohibit your employment, unless the company were a fraudulent device (a "straw man").