| Advisory opinion request as to the propriety of Governor John Bel Edwards serving as "special counsel" for the law firm Fishman Haygood LLP after he leaves public office. |
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Governor Edwards' attorney asks the Board to render an advisory opinion as to the following:
1. Governor Edwards' relationship with Fishman Haygood is that of an independent contractor.
2. As long as Governor Edwards does not assist any Fishman Haygood client in a transaction involving the executive branch, his work with the law firm will not violate the Code of Governmental Ethics.
The draft of Governor Edwards' contract with Fishman Haygood provides that the law firm will retain the services of Governor Edwards as a "non-exclusive independent contractor with a 'Special Counsel' designation." The draft contract provides that Governor Edwards is
1. an independent contractor.
2. free from control and supervision of the law firm as to the means and methods of performing his work.
3. not obligated to work in a particular place, to work a set number of hours or to log a set number of billable hours.
4. not prohibited from providing services to other clients or law firms that do not present conflicts for Fishman Haygood.
5. able to decide which assignments he will accept.
6. maintaining his own office space, but may use the firm's office in New Orleans and Baton Rouge.
7. responsible for his own expenses, but may be reimbursed by clients for those expenses.
8. not be eligible to participate in the law firm's group health, life and disability plans, 401(k), profit sharing, retirement plants and other benefits provided by the law firm.
9. going to receive a 1099 tax form.
10. is working for a fixed term, and the law firm cannot terminate his services "at will."
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The Board, at its February 2, 2024 meeting instructed staff to draft an advisory opinion based on the facts provided for its consideration at the March 8, 2024 meeting. The draft opinion is attached to this item.
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Definitions: La. R.S. 42:1102
(2)(a) "Agency" means . . . (ii) For the governor and lieutenant governor, it shall mean the executive branch of state government.
(3) "Agency head" means the chief executive or administrative officer of an agency or any member of a board or commission who exercises supervision over the agency.
(7) "Compensation" means any thing of economic value which is paid, loaned, granted, given, donated or transferred or to be paid, loaned, granted, given, donated, or transferred for or in consideration of personal services to any person.
(15) "Participate" means to take part in or to have or share responsibility for action of a governmental entity or a proceeding, personally, as a public servant of the governmental entity, through approval, disapproval, decision, recommendation, the rendering of advice, investigation, or the failure to act or perform a duty.
(16) "Person" means an individual or legal entity other than a governmental entity, or an agency thereof.
(23) "Transaction involving the governmental entity" means any proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other such particular matter which the public servant or former public servant of the governmental entity in question knows or should know: (a) Is, or will be, the subject of action by the governmental entity. (b) Is one to which the governmental entity is or will be a party. (c) Is one in which the governmental entity has a direct interest. A transaction involving the agency of a governmental entity shall have the same meaning with respect to the agency.
(12) "Governmental entity" means the state or any political subdivision which employs the public employee or employed the former public employee or to which the elected official is elected, as the case maybe.
La. R.S. 42:1121A(1)
No former agency head or elected official shall, for a period of two years following the termination of his public service as the head of such agency or as an elected public official serving in such agency, assist another person, for compensation, in a transaction, or in an appearance in connection with a transaction,involving that agency or render any service on a contractual basis to or for such agency.
La. R.S. 42:1121C
No legal entity in which a former public servant is an officer, director, trustee, partner, or employee shall, for a period of two years following the termination of his public service, assist another person, for compensation, in a transaction, or in an appearance in connection with a transaction in which such public servant at any time participated during his public service and involving the agency by which he was formerly employed or in which he formerly held office.
La. R.S. 42:1121D
No former public servant shall share in any compensation received by another person for assistance which such former public servant is prohibited from rendering by this Section.
La. R.S. 42:1113D(3) prohibits the governor, his spouse, or any legal entity in which he or his spouse own an interest in excess of 5% from entering into a contract with state government for one year after the governor's term of office ends.
Commission of Ethics for Public Employees Docket No. 94-005: The Commission of Ethics for Public Employees, the predecessor to the Louisiana Board of Ethics, concluded that the former Secretary of the Louisiana Department of Environmental Qualify (DEQ) "participated" in all transactions that arose within DEQ while he was secretary. Therefore, any law firm in which the secretary becomes an "officer, director, trustee, partner or employee may not assist clients for compensation in transactions that arose at DEQ while he was secretary. However, the Commission suggested that as special counsel, if he was an "independent contractor," then the restrictions in La. 42:1121C would not apply to the law firm. The opinion referenced the decision in Hickman v. Southern Pacific Transport Company, 262 La. 102, 262 So.2d 385 (1972) to examine whether the secretary's relationship with the law firm would be as an employee or an independent contractor. This opinion was relied on in Tower Credit, Inc. Carpenter, 825 So.2d 1125, 1129 (La. 2002) when the Court found the following factors relevant in determining whether an independent contract relationship exists:
1. there is a valid contract between the parties;
2. the work being done is of an independent nature such that the contractor may employ non-exclusive means in accomplishing it;
3. the contract calls for specific piecework as a unit to be done according to the independent contractor's own methods, without being subject to the control and direction of the principal, except as to the result of the services to be rendered;
4. there is a specific price for the overall undertaking agreed upon; and,
5. the duration of the work is for a specific time and not subject to termination or discontinuance at the will of either side with a corresponding liability for its breach.
In Hughes v. Goodreau, 2001-2107 (La. App. 1 Cir. 12/31/02), 836 So. 2d 649, the First Circuit relied on these two cases when examining the relationship between a broker and real estate agent for vicarious liability purposes. The broker did not dictate the number of hours worked or the properties they worked. The agents worked exclusively for the broker and were required to comply with the broker's policy and procedure manual. The referrals were the property of the broker. The parties could terminate the relationship without incurring liability for breach and the broker could immediately terminate an agent for breach of contract. The First Circuit concluded that the agents were not independent contractors and the broker was vicariously liable for their actions.
Commission on Ethics for Public Employees Docket No. 1995-092: Affirmed its decision in Docket No. 1994-005 with respect to La. R.S. 42:1121C issue.
Ethics Board Docket No. 2002-263:
The Board concluded, after examining the proposed contractual relationship between former New Orleans Mayor Marc Morial and the law firm of Adams and Reese, it established an independent contractor relationship between the law firm and Mayor Morial.
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Adopt draft of advisory opinion.
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| Assigned Attorney: |
Kathleen Allen |
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