Focus

Spousal Conflicts of Interest

by Shana R. Lewis

School District Superintendent John Smith just proposed marriage to a teacher in the district. The school board relies on Smith for negotiating the labor agreement governing the wages, hours and working conditions for the teachers. Is there a problem?

The wife of school board member Daniel Johnson has just been hired to serve as a secretary in one of the district’s schools. As a benefit of that employment, Mrs. Johnson is eligible for family health insurance. Her husband intends to participate in the school board’s discussion and vote concerning the selection of the district’s health insurance provider. Is there a problem?

School Board President Lila Matthews is married to Lyle Matthews, a teacher in the school district. The board president sits on the committee responsible for negotiating the labor agreement governing the wages, hours and working conditions for the support staff bargaining unit. The labor agreement states that fringe benefits provided to the support staff will be the same as the fringe benefits provided to the teachers. Is there a problem?

Romantic relationships bud and sometimes bloom in the school district workplace. When those relationships involve a sitting member of a school board or an administrator with responsibility for managing other employees, questions about a conflict of interest will be raised.

Most states have laws prohibiting a public official from taking official action that would result in a direct, personal financial interest for the public official. Because spouses are perceived as sharing financial interests, many states also have laws prohibiting a public official from taking official action that would result in a direct, financial interest for the public official’s spouse. Depending on the laws in the state, such action could result in a violation of the common law, civil or criminal statutes or the state code of ethics.

In Wisconsin, a public official may not participate in discussions, negotiations or votes concerning a contract in which his or her spouse has a private pecuniary interest, direct or indirect. Similarly, public officials in Missouri are prohibited from discussing or voting on contracts that provide direct financial benefits to their spouses. In Virginia and Mississippi, school boards are explicitly prohibited from hiring the spouses of board members or entering into contracts with the spouses of board members. Iowa, Kansas and South Dakota allow a public official to vote on the contract of his or her spouse, but only when the contract has been subjected to competitive bidding procedures.

Substantial Value
In states prohibiting public officials from taking official action that would result in a direct financial benefit for the official’s spouse, it is clear the public official may not participate in the discussions, negotiations or vote concerning the individual employment contract of the spouse. The public official also must be cautious when participating in discussions, negotiations and votes on agenda items that may affect the wages, hours and conditions of employment of his or her spouse.

For example, a public official should not participate in discussions, negotiations or votes concerning the labor agreement governing the employment of his or her spouse. Additionally, that public official should be particularly cautious about discussing, negotiating and voting on the labor agreements governing the employment of other employees if the terms of the other labor agreement will serve as precedent for the terms of the spouse’s employment. If the effect of the other labor agreement’s terms on the public official’s spouse is conjectural or inconsequential, the public official may have more flexibility in participating in discussions or decisions concerning that labor agreement.

Finally, because health insurance is something of substantial value and benefit to the insured, the public official should refrain from participating in discussions, negotiations or votes concerning any labor agreement that provides for such health benefits if the spouse is covered by the district’s health insurance. Also, the public official should not participate in selecting the benefit provider or benefit plan design.

Personal Stakes
When confronted with questions involving conflicts of interest caused by the employment of the spouse of a public official, such as a school board member or an administrator, it is important to consider the legal and ethical issues and to review any applicable board policies that may be even more restrictive than the statutory mandates.

If a school board member or administrator is in a meeting when the board intends to gather information, discuss or deliberate about a contract in which he or she has a personal financial interest because of a spousal relationship, the board member or administrator should remove himself or herself from the meeting and ensure the abstention and departure are recorded in the minutes. Even if the board member or administrator does not participate in the original contracting process, he or she may violate the law for taking subsequent action on the contract, such as authorizing payment under a contract or negotiating disputes over contract terms. Therefore, the school board member or administrator should abstain from all discussions, negotiations and votes that are related to the contract with which he or she has a personal financial interest.

When school board members or school district administrators and district employees announce their engagement, it is customary to congratulate the happy couple on their impending marriage. However, the immediate next step is to consult the school district’s legal counsel to determine how the state law regulates spousal relationships between public officials and public employees. Such preventive action could help the couple and the school district avoid civil and/or criminal liability.

Shana Lewis is an attorney specializing in school law with Lathrop & Clark, P.O. Box 1507, Madison, WI 53701. E-mail: slewis@lathropclark.com. She adapted this from an article she co-authored with Michael Julka appearing previously in Wisconsin School News, published by the Wisconsin Association of School Boards.