RECENT CALIFORNIA SUPREME COURT DECISION CHANGES THE STANDARD FOR WHEN A CONSULTANT OR INDEPENDENT CONTRACTOR CAN BE CONSIDERED AN "EMPLOYEE" SUBJECT TO GOVERNMENT CODE 1090

Home Browse Search

IDNA CW BEST BEST & KRIEGER 113;7 SIG _tq C'9 a ATTORNEYS AT LAW CITY OF SA TA Memorandum CL , r ;`„ i ,, To: Public Agency Clients From: Public Policy & Ethics Compliance Group of BB&K Date: August 2, 2017 Re: Recent. California Supreme Court Decision Changes the Standard for When a Consultant or Independent Contractor Can Be Considered an "Employee". Subject to Gcvemment Code § 1090 In a January memo entitled: "CONSULTANTS: COMPLYING WITH THE REPORTING REQUIREMENTS AND CONFLICT OF INTEREST PROVISIONS OF THE POLITICAL REFORM ACT & GOVERNMENT CODE §1090," we discussed, among other topics, the conflict of interest considerations for consultants under Government Code section 1090. In that discussion, we reflected the then -prevailing view of the appellate courts as to the circumstances that could lead to the conclusion that a consultant qualifies as an "employee" subject to Government Code section 1090. We wrote: "The courts have held that `independent contractors who perform a public function' and. `Whose,- official:; capacities carry the potential 10 exert considerable influence over the contracting decisions of.a public agency' (this is the critical test) qualify as `employees' under GC 1090. (See Davis v. Fresno Unified School District (2105) 237 Cal.App.4th 261, 300-301; Hub City Solid Waste Services, Inc. v. City of Compton (2010) 186 Cal.AppAth 1114, 1124-1125; citing California Housing Finance Agency v. Hanover/California Management & Accounting Center, Inc. (2007) 148 Cai.App.4th 682, 690-693.)" This "considerable influence" test is no longer the law in the wake of a California Supreme Court decision handed down on June 26. In People v. Superior Court (Sahlolbei), the Court held that a consultant or independent contractor can be considered an "employee," and therefore come within the ambit of Government Code section 1090, if "they have duties to engage in or advise on public contracting that they are expected to carry out on the government's behalf." This is a different standard and looks not to the "influence" wielded by the consultant on the agency, but simply looks to what role or duties the consultant has to "advise" on public contracting. A second element discussed in the January memo was what constituted the "making of a contract in an official capacity," as applied to consultants. There we wrote: 93939.0000M9964650.1