CEO 14-27 – December 17, 2014
CONFLICT OF INTEREST
SCHOOL BOARD MEMBER’S COMPANY CONTRACTING TO PROVIDE
PRIVATE TUTORING AND EXTRACURRICULAR TRAINING TO STUDENTS
To: Name withheld at person’s request (Stuart)
A district school board member will have a prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, if her company engages teachers from her own school district to provide tutoring services, or if the services are provided to students of her own district; and the board member will have a prohibited conflict of interest under Section 112.313(7)(a) if her company provides science, technology, engineering, and math (STEM) training, using teachers from her own district or to students of her own district. Referenced are CEO 14-21, CEO 14-2, CEO 13-21, CEO 13-19, CEO 09-3, CEO 08-7, CEO 07-2, CEO 97-17, CEO 94-37, CEO 88-43, and CEO 81-47.
Will a prohibited conflict of interest be created under Section 112.313(7)(a), Florida Statutes, if a company owned by a school board member hires school district teachers to provide private tutoring services to district students, or provides tutoring services to school district students?
Question 1 is answered in the affirmative.
Through your letter of inquiry and correspondence with our staff, you state that you recently were elected to the District School Board of Martin County. You relate that you are the sole owner of an S-corporation. You state this corporation is a private education company which provides private tutoring to students in several counties, including Martin County. In particular, you state your company hires public school teachers—some of whom teach within the Martin County School District—on an independent contractor basis to provide private tutoring.
You relate that none of the tutoring is offered on school campuses, but rather at your company’s office. You write that students call the company’s office to request tutoring and that the office assigns each student to a particular tutor. You state that the students pay a fee prior to the start of each tutoring session.
You write that the School District has no involvement in these private tutoring activities. You state District policy does not prohibit teachers from accepting secondary employment as private tutors, although it does restrict them from tutoring students within their own classes.1 Furthermore, you relate that while the District offers in-house tutoring on the same subjects for which your company provides private tutoring, this in-house tutoring is restricted to those students who qualify for free tutoring. You state your company does not provide tutoring to students who qualify for free in-house tutoring at the District.
Given this context, you inquire whether a prohibited conflict of interest will exist under the Code of Ethics if your company continues to offer private tutoring to District students—using District teachers—while you serve on the School Board. The provision relevant to your inquiry is Section 112.313(7)(a), Florida Statutes,2 which provides:
CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.--No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee . . .; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interest and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties.
The first part of the statute prohibits a public officer (e.g., a school board member) from being employed by, or having a contractual relationship with, a business entity which is being regulated by, or which is doing business with, her public agency. In your situation, the entire District would be your agency. See CEO 14-21. This first part of the statute is not applicable to your situation, as the tutoring arrangement that you describe does not place your company in a contractual relationship with the District or indicate that your company otherwise is doing business with the District. You indicate the District is not involved in, and does not regulate, your company’s tutoring arrangement; your company simply hires teachers to perform tutoring services on an independent contractor basis.
The second part of the statute prohibits a public officer from having any employment or contractual relationship that will create a continuing or frequently recurring conflict between her private interests and the performance of her public duties or will impede the full and faithful discharge of her public duties. In CEO 14-21, we addressed a situation somewhat analogous to your own. The opinion concerned a school board member who was employed by a private corporation—a literacy foundation—seeking to recruit teachers from within the board member’s school district to serve as reading mentors. In that situation, we found there would be a prohibited conflict of interest under the second part of Section 112.313(7)(a) because, if the board member engaged in teacher recruitment within the district, she “could be tempted to act less than objectively toward teachers in her [d]istrict depending on whether or not they worked for the [f]oundation.” We reasoned this possibility could create a conflict between the board member’s public position and her private interests, and, therefore, we concluded the board member should only recruit teachers from outside of her district.
Considering our reasoning in CEO 14-21, the question here is whether there is a reality that your private company’s tutoring activities could hinder or compromise your public capacity duties as a member of the School Board. This question hinges upon whether your company’s interaction with teachers within the District could affect your role as a School Board member. From what you indicate, we find that your role as a School Board member is susceptible to compromise.
While, unlike the school board member in CEO 14-21, it does not appear that your company would recruit new personnel from teachers within your District, you indicate your company recruited its current tutors from within your District. And although this recruitment occurred prior to your election to the Board, those recruited prior, as well as any new workers of your company from among District teachers contracting on their own initiative with your company, will, nevertheless, be teachers of your School District. Notwithstanding that you represent that your role as a School Board member does not require you to review how District teachers are performing, it is inescapable that the School Board, of which you are a member, has authority or responsibility regarding District teachers. For example, were you asked as a Board member to evaluate the effectiveness of District teachers, it is apparent that you could be favorably disposed towards those who perform private tutoring for your company. See 09-3, finding a conflict of interest when a public officer’s private interests could affect his public duty to objectively evaluate, recommend, and supervise employees in his public capacity. This is so even though other District officials, such as the Superintendent, might have a more likely or more significant role regarding District teachers. An example of this is your role as a School Board member in disciplinary proceedings against teachers, which could be compromised by the private tutoring arrangement. You indicate that the School Board is required to review disciplinary recommendations made by the District Superintendent and staff against particular teachers. Were you to be asked as a Board member to evaluate a recommendation against a teacher also involved in your company’s tutoring program, questions could be raised regarding your objectivity, even though you state that such disciplinary proceedings requiring Board review are “fairly rare” and that you would refrain from voting if a proceeding addresses a teacher involved with your company.3
In sum, under the situation you present, we find that a prohibited conflict of interest under Section 112.313(7)(a) would exist if your company continues to offer private tutoring to students within your District or to engage District teachers to provide tutoring.4
Question 1 is answered accordingly.
Will a prohibited conflict of interest be created under Section 112.313(7)(a), Florida Statutes, if a company owned by a school board member provides STEM training to students within her district, either through a contract with the PTA or through financial arrangements with individual students?
Question 2 is answered in the affirmative.
You next ask whether you will have any conflicts of interest if your company provides science, technology, engineering, and math (STEM) training to students within your District. You state that your company has a full-time employee who offers such training, and that your company occasionally hires certified teachers to provide it as well. You relate that there are two ways in which your company offers STEM training.
You state the first way is through the District’s parent-teacher association (PTA). You relate the PTA occasionally requests your company to provide robotics and other STEM programs in District classrooms, and then pays your company for any training provided. You state the PTA has a long-standing arrangement with the District allowing it to bring entities onto school grounds to offer such specialized training. You emphasize that there is no competition for space at District facilities, and that other non-profit groups can obtain access to District grounds if they meet certain criteria.
You state the second way that your company provides STEM training occurs when students pay for the training themselves. You indicate students from both within and outside the District register for STEM training on your company’s website. You state your company then provides the training at its office.
The first part of the statute applies if you are employed by or in contract with an entity doing business with the District. If you were in contractual privity with the PTA, you would trigger this part of the statute as you would be in contract with an entity (the PTA) doing business with (via its facility-use arrangement) your agency (the District). However, you state that the PTA pays your company—not you personally—for any STEM training provided. We have found in the past that a public officer does not hold employment or a contractual relationship with an entity doing business with her agency when she is employed by or in contract with another business entity (including an entity for which she is the sole owner) which is, in turn, doing business with the entity contracting with her public agency. See CEO 13-19, CEO 07-2, CEO 97-17, CEO 94-37, CEO 88-43, and CEO 81-47, among many others. Accordingly, here, although your company is in a contractual relationship with an entity doing business with the School District, you are not.5 And there is no indication in the situation presented that the PTA is seeking your personal services and merely paying you through your company, such that we could disregard your company as a legal entity separate from you personally. See CEO 14-2 (Question 2). Therefore, the first portion of Section 112.313(7)(a) does not apply.6
However, the second part of Section 112.313(7)(a) prohibits you from having any employment or contractual relationship that would create a continuing or frequently recurring conflict with your public duties or which would impede the full and faithful discharge of your public duties. We find this portion of the statute will be violated due to your company providing the STEM training, if it involves District teachers or District students. A District teacher/District student dynamic similar to that present in Question 1, above, will be present; and such could undermine your objectivity as a Board member regarding teacher or student matters.
Question 2 is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on December 12, 2014, and RENDERED this 17th day of December, 2014.
Linda McKee Robison, Chair
You indicate your company honors this policy, restricting teachers from privately tutoring students who are enrolled in their School District classes.
Section 112.313(3), Florida Statutes, is not applicable to your inquiry since there is no indication that your company is renting, leasing, or selling any realty, goods, or services to the District.
We also find that a similar conflicting dynamic is present regarding District students, in that they, too, could have matters ultimately coming before the Board and regarding which your objective performance as a Board member could be called into question depending on whether or not a given student was or was not a customer of your company. See CEO 13-21, and our decisions cited therein, finding a similar conflict if school district teachers, coaches, or others were involved with tutoring of students in their public school classes or charge.
We by no means find that you actually would misuse your public position regarding teachers or students associated with you private business. However, Section 112.313(7)(a), unlike Section 112.313(6), Florida Statutes, requires only a “temptation to dishonor.” Zerweck v. State Commission on Ethics, 409 So. 2d 57 (Fla. 4th DCA 1982); and see Section 112.312(8), Florida Statutes, defining, with emphasis supplied, “conflict” or “conflict of interest” to mean: “a situation in which regard for a private interest tends to lead to disregard of a public duty or interest.”
Supporting this reasoning is the concept that S-corporations—such as your company—are treated as separate legal entities from their owners, except in regard to assessing income tax. See Section 605.1103(3), Florida Statutes (2014). Additional statutes shield corporate shareholders and directors from being held personally liable for actions committed by their corporations. See Sections 607.0732(6) and 607.083(1), Florida Statutes.
Also, this analysis would change were you performing the STEM training for your company via professional licensure. If an individual performs services for her employer pursuant to a professional license, she is deemed to hold a contractual relationship with any client who receives such services. See CEO 08-7. However, you indicate that you do not perform any STEM training for your company. Rather such training is performed by company employees other than you, or by outside contractors.