The following advisory opinion is issued in response to a request submitted by [ ], a former employee of the Metropolitan Transit Authority ("MTA"), currently in private practice with the law firm of [ ]. While employed at the MTA, [the former State employee] was lead counsel in a case brought against the MTA. After leaving State service, the Commission determined that [the former State employee] could continue to represent the MTA on this case so long as neither he,nor [the law firm], were compensated by the MTA. Following remand of this case for the trial of certain issues, the MTA wishes to retain the services of [the law firm] on a paid basis to handle this trial, and [the law firm] is prepared not to charge the MTA for the time [the former State employee] works on the case.
Pursuant to the authority vested in it by Executive Law §94(15), the Commission renders its opinion that [the law firm] may not bill the MTA for its services if [the former State employee] is involved in the case. At the same time, [the former State employee] may continue to work on a pro bono basis for the MTA, so long as his firm is not compensated for work performed on this case.
[The former State employee's] work for the MTA
[The former State employee] began his State service as an attorney for the Law Department of the New York City Transit Authority ("TA") in November 1992, where he performed general legal work. In July 1997, [the former State employee] transferred to the MTA, where his primary function for three and one-half years was to handle the litigation the TA referred to the MTA's Law Department.1
After his separation from the MTA in early 2001 to practice law in the private sector, the MTA requested that [the former State employee] complete certain cases he was working on prior to his departure. The completion of these cases generally involved submitting reply briefs and arguing appeals on behalf of the MTA. In order to avoid any issues under the Public Officers Law, [the law firm] consented to [the former State employee] performing the work pro bono and, in a prior informal opinion dated February 1, 2001, the Commission determined that [the former State employee] could complete these cases under this condition.2
One of the cases that [the former State employee] was permitted to complete was the appeal of a United States District Court denial of a summary judgment motion.3 In a decision dated March 26, 2002, the United States Court of Appeals for the Second Circuit reversed the District Court's ruling with respects to certain issues, affirmed the balance of the decision, and remanded there remaining issues for a jury trial.
The Case on Remand
The MTA has advised [the law firm] that it does not wish to allocate MTA resources to handle the trial and any motion practice or appeal that might follow. Due to the substantial costs involved in a new law firm becoming familiar with the case, the MTA has asked [the law firm] to continue as Counsel and represent the MTA at trial. [The law firm] is on the MTA's list of approved outside counsel, and its billing rate is set pursuant to a pre-existing agreement between the MTA and the law firm.
[The law firm] has offered to underwrite the cost of the time [the former State employee] would spend assisting other attorneys at the firm handling the case and bill the MTA at the contract rate set by the MTA for its outside counsel. The firm asserts that it will maintain careful records to ensure that the time [the former State employee] spends on the case is, in fact, pro bono, and that[the law firm] will not receive any additional compensation or reward for handling the case beyond its regular contractual rate as outside counsel to the MTA.
The statutory language setting forth the two-year bar is found in Public Officers Law §73(8)(a)(i),which states:
No person who has served as a state officer or employee shall within a period of two years after the termination of such service or employment appear or practice before such state agency or receive compensation for any services rendered by such former officer or employee on behalf or any person, firm, corporation, or association in relation to any case, proceeding or application or other matter before such agency.
The lifetime bar contained in Public Officers Law §73(8)(a)(ii) provides:
No person who has served as a state officer or employee shall after the termination of such service or employment appear, practice, communicate or otherwise render services before any state agency or receive compensation for any such services rendered by such former officer or employee on behalf of any person, firm, corporation or other entity in relation to any case,proceeding, application or transaction with respect to which such person was directly concerned and in which he or she personally participated during the period of his or her service or employment, or which was under his or her active consideration.
The issue before the Commission is whether [the former State employee's] prior involvement in the case in question would preclude him from defending the MTA in this matter and, if not,whether the firm may bill the MTA for its services, provided that [the former State employee's]work on the case is pro bono.
In prior opinions, the Commission has ruled that unpaid service by a former employee at the request of the State, which is also for the benefit of the State, does not constitute an appearance before a State agency.4 Thus, in Advisory Opinion No. 93-15, the Commission concluded that an attorney may handle a case pro bono that would otherwise be subject to the lifetime bar. At the same time, the Commission further stated that "the firm is eligible to act only if it is not paid as well." The Commission reasoned that "it would violate the spirit of the lifetime bar to allow an otherwise disqualified member to work for free and to let that member engage the assistance of his colleagues for pay to help him, with the same case and clients." Thus, when a former State employee is working pro bono on an otherwise restricted matter, the law firm is prohibited from receiving compensation for the transaction.
The Commission is persuaded that the rationale of Advisory Opinion No. 93-15 should prevail here. In the instant case, the concern exists that [the former State employee's] work on remand of the matter, should [the law firm] be allowed to bill, will result in an indirect benefit to him. By bringing paid work to the firm on the basis of his State service, the risk exists that [the former State employee] will gain a financial or other benefit from the firm's compensation by the MTA.
The reasoning of Advisory Opinion No. 93-15 is consistent with the heart of the revolving door provisions. In enacting the post-employment provisions, the Legislature intended to prohibit State officials and employees from taking business with them upon their separation from State service. Although the Commission has permitted pro bono representation of the State at the request of the former agency (see, e.g., Advisory Opinion No. 91-2), the rationale for that narrow exception disappears when the law firm intends to bill for the work performed by others. In that case, the indirect benefit to the former employee and the direct benefit to the firm places the matter squarely within the restrictions of the revolving door.
The Commission concludes that [the law firm] may not bill the MTA for its services if [the former State employee] is involved in the case, although [the former State employee] may continue to represent the MTA pro bono.
This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith,unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.
Paul Shechtman, Chair
Dated: September 26, 2002
Endnotes2. Public Officers Law §73(8)(a)(i) would prohibit a former employee, such as [the former State employee], from providing compensated services to his former agency during the two year post-employment period (see, e.g., Advisory Opinion Nos. 91-2 and 94-21).
4. See, Advisory Opinion No. 91-2: The purpose
of the revolving door subdivision is to preclude the possibility that a former
State employee may leverage his or her knowledge, experience and contacts gained
in State service to his or her own advantage or that of a client, thereby
securing unwarranted privileges, consideration or action."