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Re: 92-0061: Members of a Local Board of Ethics as
"Local Government Officers" pursuant to the
Local Government Ethics Law.

Dear Deputy Commissioner Skokowski:

You have requested advice as to whether the members of the
various local boards of ethics, established pursuant to the Local
Government Ethics Law, N.J.S.A. 40A:9-22.1 et seq., are "local
government officers" pursuant to the Local Government Ethics Law.
For the below stated reasons you are advised that the members of a
local ethics board are "local government officers" pursuant to the
Local Government Ethics Law and therefore subject to its terms,
particularly the requirement of filing a financial disclosure
statement.

The purpose of the Law is to provide a State-wide ethical code
applicable to persons who serve in local government and to require
"local government officers" to file annual financial disclosure
statements. N.J.S.A. 40A:9-22.1. Generally, all local government
agencies, except purely advisory bodies and school boards, are
within the scope of the Law. N.J.S.A. 40A:9-22.3(e). In the
absence of action by the county or municipal governing body to
establish a local ethics board, the Code of Ethics is enforced by
the Local Finance Board in the Department of Community Affairs.
N.J.S.A. 40A:9-22.4.

A county or municipality has the option to establish a local
ethics board. N.J.S.A. 40A:9-22.13(a), N.J.S.A. 40A:9-22.19(a).
Such a local ethics board consists of six members who are residents
of the county or municipality, as appro-priate. Ibid. Once
established the local ethics board is required to promulgate by
resolution a code of ethics for all local government officers and
employees serving the juris-diction. N.J.S.A. 40A:9-22.15,
N.J.S.A. 40A:9-22.21. The local board has the option to adopt
either the State code or a more restrictive code, but the
restrictive code is subject to the approval of the Local Finance
Board. Ibid. The local ethics board has the responsibility to
review and to determine alleged violations of the local code of
ethics, to enforce the local code, and to render advisory
opinions. Ibid. Once established a local ethics board has
significant authority and responsibility in the area of ethics,
independent of the municipality or the county which created the
board.

A "local government agency" includes,

[A]ny agency, board, governing body, including
the chief executive officer, bureau, division,
office, commission or other instrumentality
within a county or municipality, and any
independent local authority, including any
entity created by more than one county or
municipality, which performs functions other
than of purely advisory nature, but shall not
include a school board. [N.J.S.A. 40A:9-22.3(e).]

The term "local government agency" encompasses a myriad of local
government bodies. The definition is very broad and specifically
excludes only purely advisory bodies and school boards. A local
ethics board is a "board" established by a county or municipality
and it exercises considerable authority, in the specialized area of
ethics, which go beyond a "purely advisory nature." Thus, a local
ethics board established in accordance with the Local Government
Ethics Law is a "local government agency" pursuant to the Law.

Having concluded that the local ethics board is a "local
government agency", the next inquiry is whether the board members
are "local government officers." The members of a local ethics
board are not within the first three classes of "local government
officers." N.J.S.A. 40A:9-22.3(g)(1),(2),(3).
(Elected officials; members of local bodies that have authority to
enact ordinances, approve development applications, or grant zoning
variances; and members of independent local author-ities.)

The fourth and last category of "local government officer" is
a person "who is a managerial executive or confidential employee of
a local government agency, as defined in section 3 of the 'New
Jersey Employer-Employee Relations Act.'..., but shall not mean any
employee of a school district or member of a school board."
N.J.S.A. 40A:9-22.3(g)(4). As the Local Government Ethics Law
makes specific reference to the defini-tions contained in the
Employer-Employee Relations Act, it is necessary to examine the
latter Act. The Employer-Employee Relations Act, N.J.S.A. 34:13A-1
et seq., provides a mechanism for the resolution of labor disputes
in the private and public sectors. N.J.S.A. 34:13A-2. The Act is
administered by the State's Public Employment Relations Commission
(PERC). N.J.-S.A. 34:13A-5.2.

The Act defines "managerial executives" of a public employer
as,

persons who formulate management policies and
practices, and persons who are charged with
the responsibility of directing the
effectuation of such management policies and
practices.... [N.J.S.A. 34:13A-3(f)].

"Confidential employees" of a public employer are defined as,

employees whose functional responsibilities or
knowledge in connection with the issues
involved in the collective negotiations
process would make their membership in any
appropriate negotiating unit incompatible with
their official duties. [N.J.S.A. 34:13A-3(g)].

The significance of "managerial executives" and "confidential
employees" under the Employer-Employee Relations Act is that these
individuals are excluded from membership in the local collective
bargaining unit comprising of local public em-ployees. N.J.S.A.
34:13A-5.3.

PERC has established guidelines for determining whether a
person formulates management policy and direct its effectuation and
is accordingly a "managerial executive."

A person formulates policies when he develops
a particular set of objectives designed to
further the mission of the governmental unit
and when he selects a course of action from
among available alternatives. A person
directs the effectuation of policy when he is
charged with developing the methods, means,
and extent of reaching a policy objective and
thus oversees or coordinates policy
implementation by line supervisors. Simply
put, a managerial executive must possess and
exercise a level of authority and independent
judgment sufficient to affect broadly the
organization's purposes or its means of
effectuation of these purposes. Whether or
not an employee possesses this level of
authority may generally be deter-mined by
focusing on the interplay of three factors:
(1) the relative position of that employee in
his employer's hierarchy; (2) his functions
and responsibilities; and (3) the extent of
discretion he exercises. [Boro. of Montvale,
6 NJPER 507, 508-09 (1980)].

Thus, the determination as to whether a person is a "managerial
executive" requires an examination of the person's position in the
local agency's hierarchy, his job function and responsibilities,
and the amount of individual discretion exercised by the
individual. The analysis of these three factors is very often a
position-by-position determination.

The determination as to whether a person is a "con-fidential
employee" also requires an individualized deter-mination. PERC has
narrowly construed the term "confidential employee." County of
Essex, 17 NJPER 256, 257 (1991). The "key" to status as a
confidential employee "is an employee's access to, and knowledge
of, material used in labor relations processes including contract
negotiations, contract ad-ministration, grievance handling and
preparation of these processes." Ibid. Specifically PERC makes
this case-by-case analysis as follows:

We (PERC) scrutinize the facts of each case to
find for whom each employee works, what he
does, and what he knows about collective
negotiations issues. Finally, we determine
whether the responsibilities or knowledge of
each employee would compromise the employer's
right to confidentiality concerning the
collective negotiations process if the
employee was included in a negotiating unit.
[State of New Jersey, 11 NJPER 507, 510
(1985)].

Thus, a "confidential employee" has access to confidential
information of the employer which is relevant to the labor
relations of the local government agency.

In Attorney General Opinion No. 91-0093 (September 20, 1991)
we examined in detail the terms "managerial executives" and
"confidential employees" in the context of the Local Government
Ethics Law. We noted in the Opinion that the Legislature in using
these terms to define "local government officer" was attempting to
adopt an approach that would identify persons of a high level with
policy-making re-sponsibilities. We determined in the Opinion and
in other Opinions that certain persons serving in government were
necessarily "managerial executives" or "confidential employee" and
therefore "local government officers", because their statutory
duties mandated that they exercise significant policy-making
responsibilities. In examining the respon-sibilities of the
members of local ethic boards, they exercise significant
policy-making responsibilities in the specialized area of ethics. In
particular, the members determine the specifics of the local code
of ethics and they have the authority, in their discretion, to
fashion a local code stricter than the State code. Also, in
determining whether a local government officer or employee has
violated a local code of ethics the board members exercise
important quasi-judicial responsibilities in which they make a
policy-determination in every case presented to them. Accordingly,
the members of a local ethics board are necessarily "managerial
executives" and therefore "local government officers."

The determination that the members of a local ethics board
are required to file a financial disclosure statement is in
furtherance of the legislative intent to effectuate ethics in local
government affairs. The members of the local ethics board are
responsible for implementing this important legis-lative purpose
and the members in carrying out their public trust must be above
reproach. The filing of financial dis-closure statements by the
members of a local ethics board permits the public and the local
government employees and officers subject to the board's
jurisdiction the opportunity to examine whether any board member
has an actual or apparent con-flict of interest in establishing,
administering, or enforcing a local code of ethics.

For the foregoing reasons you are advised that a local board
of ethics, established pursuant to the Local Government Ethics Law,
N.J.S.A. 40A:9-22.1 et seq., is a "local government agency" for
purposes of the Local Government Ethics Law, that the members of a
local board of ethics are "local government officers" for purposes
of the Law and, therefore, must file an annual financial disclosure
statement as required by the Law.

Very truly yours,

ROBERT J. DEL TUFO
ATTORNEY GENERAL

 

By:__________________________________
John J. Chernoski
Senior Deputy Attorney General

 

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