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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
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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
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7/19/2019 1:40:05 PM
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7/19/2019 8:42:39 AM
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8/2/2017
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IC11k <br />BEST BEST & KRIEGER <br />ATTORNEYS AT LAW <br />supra, 140 Cal.App.2d at p. 291 ['[The special attorney] was an officer and <br />agent of the city.']; see also Thomson, supra, 38 Cal.3d at pp. 647-648 <br />["'The law ... will not permit one who acts in a fiduciary capacity to deal <br />with himself in his individual capacity."'].) So, for example, a stationery <br />supplier that sells paper to a public entity would ordinarily not be liable <br />under section 1090 if it advised the entity to buy pens from its subsidiary <br />because there is no sense in which the supplier, in advising on the <br />purchase of pens, was transacting on behalf of the government." <br />"In the ordinary case, a contractor who has been retained or <br />appointed by a public entity and whose actual duties include engaging in <br />or advising on public contracting is charged with acting on the <br />government's behalf. Such a person would therefore be expected to <br />subordinate his or her personal financial interests to those of the public in <br />the same manner as a permanent officer or common law employee tasked <br />with the same duties. (See 46 Ops.Cal.Atty.Gen., supra, at p. 79 ['[Section <br />1090] require[s] of those who serve the public temporarily the same fealty <br />expected from permanent officers and employees.'].) Thus, for instance, a <br />person who was initially hired as an officer or employee with <br />responsibilities for contracting and then rehired as an independent <br />contractor to perform the same duties and functions would be expected to <br />continue to serve the public faithfully. Such a contractor would be subject <br />to section 1090." <br />By establishing these new standards the Court steers the analysis from an <br />assessment of the influence wielded by the consultant, which is essentially a subjective <br />judgement, and introduces a far more objective and rational test which looks to the <br />actual function of the consultant and that consultant's actual participation in the contract <br />making process. Applying this new standard should make it more straightforward for <br />government agency officials and officers and outside consultants to measure and <br />determine whether the consultant is covered by section 1090 and "involved in the <br />making of a contract in their official capacity," as construed in that law. <br />Should you have any questions or concerns regarding the information contained <br />in this memo or need guidance concerning consultants as public officials or employees <br />for disclosure or disqualification purposes, please do not hesitate to contact one of the <br />attorneys in our Public Policy & Ethics Group or your Best Best & Krieger attorney. <br />GARY W.SCHONS <br />MICHAEL J. MAURER <br />-3 - <br />93939,00000\29964650.1 <br />
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