Texas State Seal

TEXAS ETHICS COMMISSION

 Texas State Seal

ETHICS ADVISORY OPINION NO. 600

December 18, 2023

ISSUE

Whether Chapter 572 of the Government Code prohibits a former employee of a regulatory agency from accepting certain employment. (AOR-696).

SUMMARY

The requestor is not a member of the governing body or the executive head of a regulatory agency, so Section 572.054(a) does not apply. The requestor is not proposing to participate in any particular matter in which he participated as a state employee, so Section 572.054(b) would not prevent the requestor from engaging in his proposed employment. Merely reviewing a contract for conformity with certain form requirements, such as naming the correct party, does not constitute participating in the contract negotiation for purposes of Section 572.069. However, if the requestor gave approval, advice, or recommendation on whether to enter into a contract, or a substantive term of the contract such as how many employees to station at a given facility, he participated in that contract negotiation. If he participated in the contract negotiation, he would have to wait two years from when the contract was signed before accepting employment from any other person involved in that contract negotiation under Section 572.069.

FACTS

The requestor currently works in a supervisory role in the Outstationed Worker Program (OWP) of the Texas Health and Human Services Commission. The OWP provides staff to healthcare facilities to make determinations as to whether patients of the healthcare facilities qualify for benefits administered by the state. The state then invoices the healthcare facilities for the cost of the workers provided by the state. The requestor described his role as it relates to OWP contracts as follows:

[S]ince these are Revenue Generating contracts and the fact they are boilerplate contracts and all the contract managers do is fill in the name of the contractor (recipient) and list the contractor’s Primary. Legal, Signatory and IT Representatives. It is not like we are negotiating the terms. The terms are all set and every contractor receives the same template and the same wording. No negotiation take place by the contract managers or myself as to content of the contract but only the names and how many units and the facilities that we will cover.........I see every contract. Before sending them my boss has to approve on HHSC side along with five others in Senior Leadership. The contract managers under me draw up the contracts and I check them for accuracy but we never change the terms of the contract since legal, program and 10 other areas must approved the template prior to legal approving it for us. Once approved, we use the same template for all the contractors. There price is also constant for all 220 contracts......... No negotiations are done by the contract manager. I touch them all but just to make sure they have not been changed and all the contractor’s information is listed correctly.

The requestor plans on leaving the Texas Health and Human Services Commission to be employed by a company that operates several medical facilities that has several existing OWP contracts. The requestor states the company wants his help in expanding. He expects to “help to manage the payments to the state each month as well as the vast work involved with the determination of eligibility at all their sites and quality control of the work each day.” The requestor states that the functions he would perform for the company “are completely different from what I work with daily [at HHSC] in writing and delivering services to the contractors by managing the contracts and collecting the funds.” He further stated, “I will not be handling the [OWP] contracts at all for them.”

ANALYSIS

Chapter 572 of the Texas Government Code contains three different “revolving door” provisions. See Tex. Gov’t Code §§ 572.054(a), 572.054(b), and 572.069. The first of these provisions, section 572.054(a), applies only to “[a] former member of the governing body or a former executive head of a regulatory agency.” Tex. Gov’t Code § 572.054(a). Because the requestor is neither a member of HHSC’s governing body nor the agency’s executive head, this provision does not prohibit him from accepting any potential employment.

The second revolving door provision prohibits all former state officers and employees of regulatory agencies from receiving any compensation for services rendered on behalf of any person “regarding a particular matter in which the former officer or employee participated during the period of state service or employment, either through personal involvement or because the case or proceeding was a matter within the officer’s or employee’s official responsibility.” Tex. Gov’t Code § 572.054(b).

This law prohibits a former state employee from working on a “particular matter” the former state employee “participated” in as an employee of the state agency.

“Particular matter” is defined as “a specific investigation, application, request for a ruling or determination, rulemaking proceeding, contract, claim, charge, accusation, arrest, or judicial or other proceeding.” Tex. Gov’t Code § 572.054(h)(2).

Former state employees are not prohibited from working in subject areas or for employers with which they became familiar in the course of their state employment. Id. See also Tex. Ethics Comm’n Op. No. 364 (1997). Instead, the “term ‘particular matter’ refers to a particular proceeding rather than to a particular subject matter ….” Tex. Ethics Comm’n Op. No. 496 (2011). Furthermore, in Ethics Advisory Opinion (“EAO) No. 397, the Commission determined that “[s]eparate contracts are separate ‘matters.’” Tex. Ethics Comm’n Op. No. 397 (1998).

Based on the facts presented by the requestor, he would not be prohibited by Section 572.054(b) from accepting prospect employment. The requestor states he would not work on existing OWP contracts. Rather, he would be helping with the company’s operations and expansion. These are not the same particular matters that he worked on as an HHSC employee. Nor would the requestor be prohibited by Section 572.054(b) in helping the prospective employee secure new contracts with the state because different contracts are different particular matters. Tex. Ethics Comm’n Op. No. 397 (1998).

The third revolving door provision, section 572.069, prohibits all former state officers and employees who “participated on behalf of a state agency in a procurement or contract negotiation” from accepting employment from “a person” involved in that procurement or contract negotiation for two years after the date the contract is signed or the procurement is terminated or withdrawn. Tex. Gov’t Code § 572.069.

Unlike section 572.054(b), this provision does not merely prohibit former state agency employees from working on particular matters in their new employment. Instead, it prohibits former state agency employees from accepting any employment from certain persons for two years, even if the private employment is unrelated to anything they worked on during their state service.

Section 572.069 does not define the term “participated.” However, we have relied on the meaning of “participated” in Section 572.054 when construing Section 572.069, and apply that meaning here. See Tex. Ethics Comm’n Op. No. 568 (2021). “Participated” means “to have taken action as an officer or employee through decision, approval, disapproval, recommendation, giving advice, investigation, or similar action.” Tex. Gov’t Code 572.054(h)(1).

The requestor stated he was a supervisor in the OWP, which entered into contracts with healthcare providers. Unlike typical state contracts where the state pays for goods or services, with the OWP contracts, the state receives revenue for providing services to a private business. Although it is not clear whether these arrangements are “procurements,” they are contracts and therefore covered by Section 572.069.

We have not addressed in an advisory opinion the scope of the term “participation” in contract negotiation that was not also a procurement. However, we have held that a supervisor did not “participate” in a procurement on behalf of a state agency merely by keeping informed of the status of agency procurements. Tex. Ethics Comm’n Op. No. 568 (2021). But scoring and evaluating a bid proposal is participating in a procurement. Tex. Ethics Comm’n Op. No. 545 (2017).

The term “contract negotiation” is not defined in Chapter 572. To “negotiate” is “to confer with another so as to arrive at the settlement of some matter.” Merriam-Webster Dictionary Online available at https://www.merriam-webster.com/dictionary/negotiate. A state employee does not need to have personal contact with the counterparty to participate in a contract negotiation. A state employee participates in a negotiation by providing, among other things, approval, disapproval, or recommendation. See Gov't Code § 572.054(h)(1).

The requestor states his only involvement in the contract was to ensure that it was in the correct form, named the correct parties, and included the correct contact information. The facts do not indicate that he made contact with or discussed the terms of the contract with the counterparty. Nor did the requestor have the authority to change the terms of the contract. Merely reviewing a contract for conformity with certain form requirements, such as naming the correct party, does not constitute participating in the contract negotiation. As such, Section 572.069 would not prohibit the requestor from accepting immediate employment with a company if he only conducted a form review for a contract with HHSC.

However, it is not clear from the request whether the requestor gave approval, advice, or a recommendation on whether to enter into a contact with a given facility or the number of employees to station at a given facility. If the requestor gave approval, advice, or recommendation on whether to enter into a contract at all, or a substantive term of the contract such as how many employees to station at a given facility, he participated in that contract negotiation. As a consequence, he would have to wait two years from when the contract was signed before accepting employment from any person involved in that contract negotiation under Section 572.069.