Incompatible Office and Conflict of Interest: Two Different Concepts

Charis Lee

By Charis Lee, Esq., MASB Assistant Director of Labor Relations & Legal Services

DashBoard, Sept. 30, 2020

We get quite a few calls here in the MASB Legal Department regarding school board members who are interested in taking on increased roles within their district, such as volunteering as an assistant athletics coach, helping out in the classroom as a substitute or perhaps becoming a part-time school bus driver. These questions often concern whether or not such positions create a “conflict of interest” with the individual’s position as a school board member. In fact, these situations are governed by Michigan’s incompatible office statutes, not conflict of interest laws. Conflating these two separate legal concepts is understandable, and not at all unusual; however, having some grasp as to how they differ is important.

Incompatible office laws prohibit a person from holding two or more incompatible public offices at the same time (MCL 15.181 et seq). Such positions are considered “incompatible” when, among other things, one is subordinate to the other. On its surface, this mandate would appear to apply only to elected offices, such as school board trustee positions, county commission seats and so forth. In reality, however, the incompatible office prohibition is most often relevant to school board members when they begin to explore the possibility of expanding their role within the district. This is because, pursuant to Michigan Attorney General interpretations, every public employee is considered to be holding a “public office” within the public entity they serve. Hence, while there is generally no incompatible office issue for an individual who serves on both a school board and the local planning commission (as neither position is normally considered subordinate to the other), the same cannot be said for school board members who also work in some capacity for their school district. The supervisory authority of school boards means that the positions of “school board trustee” and “school district employee” are, in fact, incompatible (exceptions exist only for volunteering, with certain conditions).

By contrast, the term conflict of interest is most often used to refer to situations involving contracts between public officers and public entities outside of the employment realm (usually goods and services). As it pertains to school boards, these laws are generally found in MCL 15.321 et. seq as part of the Contracts of Public Servants With Public Entities Act. The most common example of this is the school board member who also happens to own a landscaping company and would like to provide those services to the district, or the board member whose wife operates a local daycare and may soon have to vote on whether or not the district will open its own childcare facility (in direct competition with his wife’s business). Unlike incompatible office matters, which are strictly disallowed, board members facing a potential conflict of interest situation are usually merely required to disclose the conflict and abstain from any vote on the issue. “Conflict of interest” is also the term that applies when a school board member abstains from voting on an employment contract because one of their family members is covered under that contract.

Incompatible office vs. conflict of interest can be confusing, particularly if there is not at least some familiarity with both terms. An individual who is curious as to whether or not it would be considered “a conflict of interest” to be both a school board member and, for instance, a substitute teacher in their local district might be completely unaware of the incompatible office statutes and only endeavor to research Michigan’s conflict of interest laws. Moreover, with it’s confusing references to “public servants,” “employment” and “public entities,” it would be easy to misconstrue Section 323 of the Contracts of Public Servants With Public Entities Act and conclude that being both a school board member and a part-time employee of the same district is allowable so long as you limit your time as an employee to under 25 hours per week.

It is generally held that what Section 323 actually creates is an exception whereby a “public servant” (read “employee”) who works for a “public entity” for less than 25 hours per week may enter into a goods or services contract with that public entity without it being considered a conflict of interest under the law. It is generally understood that this exception also applies to board members because their service to the school district does not constitute “employment of more than 25 hours per week.” Hence, a part-time employee, or board member, who owns (for instance) a tree trimming service, would be permitted to enter into a contract with their school district to provide such services without fear of creating a legal conflict of interest concern (assuming that all other exceptions regarding disclosure and vote abstention are also met).

Again, the Section 323 exception pertains only to our state’s conflict of interest statutes. It is not part of the Incompatible Public Offices Act and, therefore, has not been read to provide an exception to the general rule that an individual cannot hold the “offices” of school board trustee and school district employee simultaneously.

If you have any questions regarding these, or any other, legal topics, feel free to contact your MASB Legal Team.

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