Can a former state agency lawyer represent private clients against the agency after leaving state employment?

Plain-English summary

Representative Les Eaves asked the Attorney General how Arkansas's revolving-door ethics statute applies to a former staff attorney for the Department of Finance and Administration who leaves to enter private practice. The statute, Ark. Code Ann. § 19-11-709, has two distinct restrictions on former State employees, plus an imputation rule that reaches their new law firm partners.

The AG concluded that the permanent ban under subsection (b)(1) only applies to specific matters the lawyer personally and substantially worked on while at DF&A. It does not bar him from representing a former DF&A taxpayer in a new dispute that arose after he left, and it does not bar him from handling tax matters generally on behalf of taxpayers he never dealt with as a state employee.

The one-year ban under subsection (b)(2) is broader: it covers matters that were within the lawyer's "official responsibility" at DF&A, even if he did not personally work on them. If tax disputes generally fell within his authority while employed, he likely cannot represent private taxpayers against the State in tax cases for one year after leaving. Partners at the lawyer's new firm are subject by operation of law to the same ethics rules. Finally, the DF&A Director's authority to waive procurement conflicts under § 19-11-715(c) does not extend to waiving the one-year cooling-off rule.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

How the AG read § 19-11-709 in 2018

The statute split former state-employee restrictions into two tiers.

Permanent disqualification, subsection (b)(1). A former state employee could never act as principal or agent for anyone other than the State on a "judicial or other proceeding, application, request for ruling, contract, claim, or charge" if the employee had "participated personally and substantially through decision, approval, disapproval, recommendation, rendering of advice, investigation, or otherwise" in that specific matter while a State employee, and the State was a party or had a direct interest. The AG read this narrowly: the matter has to be the same particular matter the employee worked on. A new dispute involving the same taxpayer that arose after the employee left was not the same matter. A different taxpayer with a similar tax issue was also not the same matter.

One-year cooling-off, subsection (b)(2). Even where the former employee never personally touched a case, he was barred for one year after leaving from acting on matters that had been within his "official responsibility." Section 19-11-701(12) defined that as "direct administrative or operating authority, whether intermediate or final, either exercisable alone or with others, either personally or through subordinates, to approve, disapprove, or otherwise direct state action." The AG noted the period runs from cessation of the responsibility, not necessarily from cessation of employment, so the answer depended on the timing and scope of the lawyer's authority over tax disputes at DF&A.

Imputation to partners, subsection (c). Partners of a former state employee are subject to the same restrictions when acting on behalf of any non-State client. The opinion treated "partner" using the Uniform Partnership Act's definition (anyone presumed to share in profits) and Black's Law Dictionary's definition of a law firm as a partnership. So if the former DF&A lawyer joined a firm as an associate but the firm was structured as a partnership, the partners would be barred from doing what he was barred from doing.

Why the procurement waiver did not apply. Section 19-11-715(c) lets the DF&A Director waive employee conflicts of interest in connection with a "transaction" such as a contract or solicitation. That waiver targets current state employees with financial interests in procurement matters. The AG concluded the plain text does not authorize the Director to waive the post-employment one-year rule, and the rule's text in § 19-11-709(b)(2) does not reference any waiver mechanism. Because violations of the ethics chapter carry felony penalties under § 19-11-702 (up to $10,000 fine and one to five years' imprisonment), the AG construed the waiver authority strictly.

Common questions

A taxpayer wants to hire me right after I leave DF&A. Can I take the case?
Under the law as it stood in 2018, that depended on three things: whether you personally and substantially worked on this particular taxpayer's matters at DF&A (permanent ban under (b)(1)), whether tax disputes against the State were within your "official responsibility" at DF&A (one-year ban under (b)(2)), and how recently your responsibility for that area ended.

What does "official responsibility" mean here?
The 2018 statute defined it as the authority to "approve, disapprove, or otherwise direct state action," whether you exercised that authority alone or with others, personally or through subordinates. The AG observed that an attorney handling tax matters for the State very likely had at least some authority of this kind over taxpayer disputes.

If the lawyer joins my firm, are we as partners restricted too?
Yes, by operation of law in 2018. Subsection 709(c) extended the ethics rules to partners. Whether your specific arrangement counts as a "partnership" for this purpose is fact-dependent, but a typical for-profit law firm is treated as one.

Can DF&A waive the one-year ban for a hardship case?
The AG said no in 2018. The waiver authority in § 19-11-715(c) is for current-employee procurement conflicts only.

What if a year has passed since the lawyer left?
The (b)(2) one-year ban falls away. The (b)(1) permanent ban remains for the specific matters the lawyer personally and substantially worked on as a State employee.

Background and statutory framework

Arkansas's public-employee ethics chapter (Ark. Code Ann. § 19-11-701 et seq.) sits inside the State Procurement Law and applies to all state employees. The chapter combines three distinct prohibitions: a permanent ban on private-sector activity in particular matters the employee personally handled, a one-year cooling-off period after the employee's official responsibility ends, and imputation to partners and certain associates of former state employees. The opinion construed each prohibition strictly because of the felony penalty in § 19-11-702.

The opinion repeatedly emphasized the fact-sensitive nature of these rules. The AG declined to give a definitive answer on whether tax disputes were within the hypothetical lawyer's official responsibility, noting that an opinion cannot do the fact-finding required: the lawyer's actual job description, what specific matters he touched, and when his responsibility for various subject areas ended.

Citations

• Ark. Code Ann. § 19-11-709 (Repl. 2016) (employment restrictions on former state employees)
• Ark. Code Ann. § 19-11-715 (Repl. 2016) (waivers in procurement context)
• Ark. Code Ann. § 19-11-702 (criminal penalties for ethics violations)
• Ark. Code Ann. § 19-11-701(12) (defining "official responsibility")
• Ark. Code Ann. § 4-46-202(c)(3) (Repl. 2011) (Uniform Partnership Act, presumption of partnership from profit-sharing)
• Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179 (rule against rendering statutory words superfluous)
• Metzner v. State, 2015 Ark. 222, 462 S.W.3d 650 (criminal-statute construction in favor of defendant)
• City of Little Rock v. Rhee, 375 Ark. 491, 292 S.W.3d 292 (2009) (statutory construction principles)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2017-128
March 27, 2018
The Honorable Les Eaves
State Representative
102 Club Cove
Searcy, AR 72143-7440
Dear Representative Eaves:

I am responding to your request for an opinion regarding the ethical standards applicable to former State employees. You cite Ark. Code Ann. § 19-11-709 (Repl. 2016) ("Employment restrictions"), and ask how the statute applies to someone, now in private practice, who was a staff attorney at the Arkansas Department of Finance and Administration ("DF&A"). I have paraphrased your questions as follows:

1) Section 19-11-709(b)(1) disqualifies former State employees from activities in the private sector based on their personal involvement in certain matters while working for the State. If the attorney represented DF&A in a matter involving a particular taxpayer, can this attorney now represent the same person in a tax matter similar to the one he handled while an employee of DF&A, but that arose after he left State employment?

2) Does section 19-11-709(b)(1) prevent the attorney from handling all future tax issues for this taxpayer?

3) Does section 19-11-709(b)(1) restrict the attorney from handling, in private practice, a tax matter similar to one he handled for DF&A, but on behalf of a taxpayer with whom he was not involved while an employee of DF&A?

4) Section 19-11-709(b)(2) restricts former State employees from participating in certain matters in the private sector. Under this section, is the attorney prevented for one year from representing any taxpayer in any case against DF&A or the State?

5) Section 19-11-709(c) imputes ethical standards to the partners of former State employees. If the attorney becomes an associate in a law firm, are the firm's partners barred from engaging in conduct that the attorney cannot engage in under 709(b)(1) and 709(b)(2)?

6) Section 19-11-715(c) allows the DF&A Director to grant waivers from conflicts and other prohibited conduct in the procurement context. Can the Director also waive the one-year restriction on former State employees participating in matters that were within their official responsibilities?

RESPONSE

While I can address each of your questions in terms of the relevant statutes, please note that ethics and conflict-of-interest rules are extremely fact-sensitive. It is difficult as a general matter to answer questions that apply these rules to a given situation. With this caveat in mind, I believe the answer to your first question is "yes." The attorney described in your fact pattern is not barred from representing the taxpayer merely because the dispute is "similar" to tax matters the attorney handled for DF&A. Likewise, subsection 709(b)(1) does not generally bar the attorney from representing the taxpayer going forward. Nor is he barred from representing other clients in other tax matters. The answers to your second and third questions are therefore "no," in my opinion.

My answer to your fourth question is "probably yes," because the attorney may be barred for one year from representing private clients in tax disputes involving the State, assuming tax disputes were within the attorney's "official responsibility" while an employee of DF&A.

My answer to your fifth question is "yes." Generally, partners of a former State employee are subject by operation of law to the same ethics rules that apply to the former employee himself.

Finally, I believe the answer to your sixth question is "no." The waiver provisions in section 19-11-715 (Repl. 2016) apply only to conflicts of interest involving current State employees in the procurement context. The DF&A Director's authority to issue such waivers does not include the authority to waive the one-year "official responsibility" rule from section 19-11-709(b)(2).

DISCUSSION

Question 1: Section 19-11-709(b)(1) disqualifies former State employees from activities in the private sector based on their personal involvement in certain matters while working for the State. If the attorney represented DF&A in a matter involving a particular taxpayer, can this attorney now represent the same person in a tax matter similar to the one he handled while an employee of DF&A, but that arose after he left State employment?

In my opinion, the answer to your first question is "yes." This is a matter of statutory interpretation. My primary task is to construe the relevant statute "just as it reads," in order to "give effect to the intent of the General Assembly." And because violating the ethics rules carries a criminal penalty, I must take "nothing ... as intended that is not clearly expressed" in the statute.

Section 19-11-709(b)(1), which permanently disqualifies former State employees from certain private-sector matters, states:

It shall be a breach of ethical standards for any former employee knowingly to act as a principal or as an agent for anyone other than the state in connection with any:

(A) Judicial or other proceeding, application, request for ruling, or other determination;
(B) Contract;
(C) Claim; or
(D) Charge or controversy,

in which the employee participated personally and substantially through decision, approval, disapproval, recommendation, rendering of advice, investigation, or otherwise while an employee, where the state is a party or has a direct and substantial interest.

You ask whether a former staff attorney for DF&A, who now has a private practice, can represent a taxpayer against the State in a matter that arose after the attorney left State employment. First, please note that a number of outstanding factual issues prevent me from offering a definitive response. The attorney's DF&A job description is unknown, as are the exact matters he might have participated in as a DF&A attorney (lawsuits, administrative proceedings, and contract procurement, to name a few examples). Likewise, I do not know whether the attorney "participated personally and substantially" in such matters while a DF&A employee. Each of these issues is crucial with respect to the ethics rules in subsection 709(b)(1).

But because you stipulated that the private matter involving the taxpayer arose after the attorney left State employment, I can state generally that subsection 709(b)(1) likely would not apply. This subsection prevents a former State employee from knowingly acting (on behalf of a private entity) in matters "in which the employee participated personally and substantially . . . while an employee" of the State. Although this prohibition is permanent, it arises only in connection with a "particular matter" on which the former State employee worked "personally and substantially . . . ."

Thus, a plain reading of subsection 709(b)(1) shows that it would not apply to matters arising after an individual leaves State employment. With very limited, fact-specific exceptions, the individual could not have "personally and substantially" participated as a State employee in a matter that did not exist until the individual was employed in the private sector. And so I do not believe the attorney is barred from representing the taxpayer in the dispute described in your first question.

Question 2: Does section 19-11-709(b)(1) prevent the attorney from handling all future tax issues for this taxpayer?

For the reasons discussed above, the answer this question is generally "no." Subsection 709(b)(1) is limited to the "particular matter[s]" that the attorney handled "personally and substantially" as a State employee. And this subsection does not prevent a former State employee from representing a private client simply because the subject-matter of the representation correlates to the subject-matter of his State employment. Therefore, subsection 709(b)(1) would not prevent the attorney from representing the taxpayer in "all future tax issues." The only tax matters off limits to the attorney under subsection 709(b)(1) are those he personally and substantially participated in while an employee of DF&A.

However, the answer to this question is different under subsection 709(b)(2), which I address in Question 4.

Question 3: Does section 19-11-709(b)(1) restrict the attorney from handling, in private practice, a tax matter similar to one he handled for DF&A, but on behalf of a taxpayer with whom he was not involved while an employee of DF&A?

The answer is "no," in my opinion, for the reasons discussed in response to your first and second questions.

Question 4: Section 19-11-709(b)(2) restricts former State employees from participating in certain matters in the private sector. Under this section, is the attorney prevented for one year from representing any taxpayer in any case against DF&A or the State?

In my opinion, the answer to this question is "probably yes." Subsection 709(b)(2) prohibits former State employees from participating, on behalf of a private entity, in matters that (1) were within their official responsibility as State employees, and (2) substantially involve the State. To the extent the tax cases referenced in your fourth question meet these criteria, the attorney would likely be barred from involvement for one year.

As used in section 19-11-709(b)(2), "official responsibility" means "direct administrative or operating authority, whether intermediate or final, either exercisable alone or with others, either personally or through subordinates, to approve, disapprove, or otherwise direct state action." And it is a "breach of ethical standards" for a former State employee "knowingly to act as a principal or as an agent for anyone other than the state in matters which were within the former employee's official responsibility, where the state is a party or has a direct or substantial interest." This prohibition remains in place for "one (1) year after cessation of the . . . official responsibility."

The one-year prohibition under subsection 709(b)(2) is highly fact-dependent. And because I do not know what the attorney's official responsibilities were as an employee of DF&A, I cannot offer a definitive response to your fourth question. In other words, I do not know the scope of the attorney's "authority . . . to approve, disapprove, or otherwise direct state action." Nor do I know when a given level of authority had its "cessation" over the course of the attorney's State employment, which is essential when calculating the one year restriction.

But I can reasonably conclude that as an attorney handling tax matters, the former employee more than likely had some authority to direct State action with respect to taxpayer disputes. So it is reasonable to conclude that taxpayer disputes were (to some degree) part of the attorney's official responsibility. If they were, the one-year restriction under subsection 709(b)(2) would likely prohibit the attorney from representing a private client for purposes of a tax dispute involving the State. I cannot offer more than this general opinion, however, without more information regarding the scope, type, and timing of the attorney's "authority . . . to approve, disapprove, or otherwise direct state action . . . ."

Question 5: Section 19-11-709(c) imputes ethical standards to the partners of former State employees. If the attorney becomes an associate in a law firm, are the firm's partners barred from engaging in conduct that the attorney cannot engage in under 709(b)(1) and 709(b)(2)?

In my opinion, the answer to this question is "yes." As it relates to former State employees, subsection 709(c) states that "[i]t shall be a breach of ethical standards for a partner of a former employee knowingly to act as a principal or as an agent for anyone other than the state where such former employee is barred under subsection (b) of this section." Although "partner" is not defined in the public-employee ethics statutes, under the Uniform Partnership Act, any "person who receives a share of the profits of a business is presumed to be a partner in the business." And a for-profit law firm is commonly understood to be a partnership, regardless of its specific business formation.

Reading subsection 709(c) according to the plain meaning of its terms, I believe the ethics rules from subsection 709(b) apply to the partners in a law firm joined by the former DF&A attorney. Whether a course of conduct would violate those rules and actually result in imputed liability is a question of fact, however, that I cannot answer here.

Question 6: Section 19-11-715(c) allows the DF&A Director to grant waivers from conflicts and other prohibited conduct in the procurement context. Can the Director also waive the one-year restriction on former State employees participating in matters that were within their official responsibilities?

In my opinion, the answer to your sixth question is "no." If it is in the State's best interests, or if the "ethical conflict is insubstantial or remote," the DF&A Director "may grant an employee a written waiver from . . . employee conflict of interest, and grant permission to proceed with [a] transaction to such extent and upon such terms and conditions as may be specified." You ask whether the authority to grant these "715(c) waivers" includes, potentially, the authority to waive the one-year "official responsibility" prohibition under subsection 709(b)(2).

In my opinion, the Director's authority is not that broad. Statutes must be construed such that "no word is left void, superfluous or insignificant." And "meaning and effect" must be given to "every word in the statute, if possible." Here, the waiver authorized by subsection 715(c) is targeted to an "employee conflict of interest" arising in connection with a "contract or subcontract, and any solicitation or proposal therefor . . . ." Such a conflict exists if:

(A) The employee or any member of the employee's immediate family has a financial interest [in the contract, subcontract, or solicitation];
(B) A business or organization has a financial interest, in which business or organization the employee, or any member of the employee's immediate family, has a financial interest; or
(C) Any other person, business, or organization with whom the employee or any member of the employee's immediate family is negotiating or has an arrangement concerning prospective employment is a party.

Thus, subsection 715(c) authorizes the Director to issue a waiver in order to remove a financial conflict of interest from a "transaction," such as a contract or contract solicitation, involving a current State employee. But subsection 715(c) does not mention the one-year "official responsibility" rule in connection with the authority to issue waivers, nor can this authority reasonably be implied from the express language. And subsection 709(b)(2) does not state or imply that a waiver of its one-year rule is possible. In my opinion, the plain language of subsection 715(c) and related provisions does not authorize the Director to grant waivers of the "official responsibility" prohibition under subsection 709(b)(2).

Sincerely,

LESLIE RUTLEDGE
Attorney General