Does Mississippi's auctioneer licensing exemption for government employees cover independent contractors who run reverse auctions for the state?

Plain-English summary

The chairman of the Mississippi Auctioneer Commission asked whether the licensing exemption in § 73-4-5(2)(b), which carves out government employees who conduct sales as part of their employment, applied to independent contractors who provided "reverse auction" services for state agencies or political subdivisions.

The AG said no. The plain language of the statute referred to "an employee" of the United States or Mississippi (or its political subdivisions) acting "in the course and scope of his employment." Independent contractors are by definition not employees, so the exemption did not reach them.

A footnote in the opinion noted that the AG was not deciding whether reverse auctions even fall within Mississippi's statutory definition of "auction" or whether someone running one is an "auctioneer" in the licensing sense. Those were separate questions. But to the extent that someone running a reverse auction needed an auctioneer license, the government-employee exemption was not their escape route if they were a contractor rather than an employee.

Currency note

This opinion was issued in 2021. 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.

What the opinion said for each audience, at the time

For Mississippi auctioneers and reverse auction firms

In 2021, the safe interpretation was that an independent firm running reverse auctions for Mississippi government buyers needed to confirm it had auctioneer licensure (or that the activity fell outside the licensing requirement entirely on a different basis). The "government employee" exemption was off the table.

That mattered because reverse auctions had become a common procurement tool: the buyer (typically the government) posts a need, and bidders compete to submit progressively lower offers. Many vendors specialized in running these auctions on behalf of state and local government clients. If a vendor was an independent contractor (not a state employee), the licensing exemption did not protect them.

For Mississippi state agencies and political subdivisions using reverse auctions

If you contracted with an outside firm to run a reverse auction, you couldn't assume the firm was exempt from auctioneer licensing because it worked for you. The firm was responsible for confirming its own licensing status. Procurement contracts could include warranties of compliance, but the AG was clear that the structural exemption for "employees" did not transfer to contractors.

For the Mississippi Auctioneer Commission

The opinion gave the Commission a clear answer to a recurring question, with a deferred answer on the larger issue (does a reverse auction even fall within the licensing scheme?). The Commission could enforce the licensing requirement against contractors who were trying to use the government-employee exemption.

For procurement attorneys

The opinion was a clean illustration of strict statutory construction. When a statute says "employee," it means employee, not contractor. This is consistent with Mississippi's general rules of statutory interpretation, which give plain language plain effect.

Common questions

Q: What is a "reverse auction"?
A: An auction format where the buyer posts a request and sellers compete by lowering their offers. Government procurement uses reverse auctions to drive down prices on commodity purchases. The auctioneer in this scenario is running the auction event, not selling something.

Q: Why did the AG specifically not decide whether reverse auctions are "auctions"?
A: A footnote in the opinion explicitly reserved that question. Mississippi's statutory definition of "auction" (§ 73-4-3(a)) refers to a sale of goods to the highest bidder, which is the structure of a forward auction. A reverse auction is structurally different: bids go down, not up, and the "auctioneer" facilitates a competitive procurement rather than a sale. The AG declined to rule on whether that activity falls within the licensing scheme at all.

Q: What is the plain text of § 73-4-5(2)(b)?
A: It exempts from licensing "[a] sale conducted by an employee of the United States or the State of Mississippi or its political subdivisions in the course and scope of his employment." Three elements: an employee, a covered government entity, and acting within the scope of employment.

Q: Is there any other exemption that might apply to a contractor running a reverse auction?
A: Section 73-4-5 contains other exemptions (estate sales, courts-ordered sales, certain transactions). The opinion did not analyze each of them, only the government-employee one. A contractor would have to find a different exemption or show that the activity is not "auctioneering" under the statute.

Q: What is the rule of statutory construction the AG used?
A: "If a statute is plain and unambiguous, there is no need to engage in statutory interpretation," citing Dupree v. Carroll, 967 So. 2d 27, 30 (Miss. 2007). The Mississippi Supreme Court applies plain-meaning interpretation when the text is clear, and the AG followed that approach here.

Q: Could the legislature change this rule?
A: Yes. The legislature could amend § 73-4-5(2)(b) to extend the exemption to contractors, or to specifically address reverse auctions. The AG's opinion described the law as it stood in January 2021. Statutory amendments since then would change the analysis.

Background and statutory framework

Mississippi licenses auctioneers through § 73-4-1 et seq. Anyone who conducts an auction, provides an auction service, holds himself out as an auctioneer, or advertises as an auctioneer must be licensed by the Mississippi Auctioneer Commission. Section 73-4-3(a) defines "auction" as a sale conducted by oral or written exchanges between an auctioneer and the audience, where the audience makes offers and the auctioneer accepts the highest or most favorable.

Section 73-4-5 lists exemptions. Subsection (2)(b), the one at issue here, carves out government employees acting within the scope of employment. The policy is to allow internal government sales (e.g., agency surplus property auctions) to proceed without forcing the agency employee to obtain a private auctioneer license.

The "employee vs. contractor" distinction is foundational in employment law. An employee works under the direction and control of the employer, gets W-2 wages, and is covered by employer-sponsored benefits. A contractor operates an independent business, gets paid by 1099, and controls how the work is done. Mississippi (like most states) uses common-law agency tests to draw the line.

Reverse auction services typically operate through specialized contractors using proprietary software platforms. The contractor charges the government for the service, but is not employed by the government. So when the AG looked at whether the exemption applied, the answer flowed naturally from the contractor structure.

Citations and references

Statutes:
- Miss. Code Ann. § 73-4-3(a), definition of "auction"
- Miss. Code Ann. § 73-4-3(c), definition of "auctioneer"
- Miss. Code Ann. § 73-4-5, auctioneer licensing requirement and exemptions
- Miss. Code Ann. § 73-4-5(2)(b), exemption for sales by government employees in the course of employment

Cases cited:
- Dupree v. Carroll, 967 So. 2d 27, 30 (Miss. 2007), plain-meaning rule of statutory interpretation

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2021/01/C.ArmstrongIII_January-5-2021-Reverse-auctions-exemptions.pdf

Original opinion text

January 5, 2021

Mr. C. Jack Armstrong, III
Chairman, Mississippi Auctioneer Commission
Post Office Box 50
Morton, Mississippi 39117

Re: Reverse auctions exemptions

Dear Mr. Armstrong:

The Office of the Attorney General has received your request for an official opinion.

Question Presented

Does the exemption provided in Section 73-4-5(2)(b) to the licensure requirement for auctioneers apply to auctioneers providing services for reverse auctions as independent contractors?

Brief Response

No. Based on the plain language of Section 73-4-5(2)(b), the exemption only applies to the specified employees, not to independent contractors.

Applicable Law & Discussion

Pursuant to Mississippi Code Annotated Section 73-4-5, any person or entity that conducts an auction, provides an auction service, holds himself out as an auctioneer, or advertises his services as an auctioneer in the State of Mississippi must first obtain a license by the Mississippi Auctioneer Commission. For purposes of licensure, the Code defines an "auction" in the following manner:

"Auction" means a sale transaction conducted by means of oral or written exchanges between an auctioneer and the members of his audience, which exchanges consist of a series of invitations for offers for the purchase of goods made by the auctioneer and offers to purchase made by members of his audience and culminate in the acceptance by the auctioneer of the highest or most favorable offer made by a member of the participating audience.

Miss. Code Ann. § 73-4-3(a). An "auctioneer" is "an individual who is engaged in, or who by advertising or otherwise holds himself out as being available to engage in, the calling for, the recognition of, and the acceptance of, offers for the purchase of goods or real estate at an auction." Id. at § 73-4-3(c).[1]

Section 73-4-5(2) contains several exceptions to the licensing requirement including, relevant to your request, an exception for "[a] sale conducted by an employee of the United States or the State of Mississippi or its political subdivisions in the course and scope of his employment." Miss. Code Ann. § 73-4-5(2)(b).

If a statute is plain and unambiguous, there is no need to engage in statutory interpretation. Dupree v. Carroll, 967 So. 2d 27, 30 (Miss. 2007). A plain reading of Section 73-4-5(2)(b) demonstrates that it applies only to a sale conducted by "an employee" of the United States, State of Mississippi, or a political subdivision thereof who is acting "in the course and scope of his employment." This office is of the opinion that this language does not apply to an independent contractor.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Phil Carter
Phil Carter
Special Assistant Attorney General

[1] This opinion does not address whether a reverse auction meets the definition of an "auction," provided in Section 73-4-3(a) or whether an individual conducting a reverse auction constitutes an "auctioneer" as defined in Section 73-4-3(c).