State Ethics Commission Issues Advisory Opinion Regarding the Post-Employment Law

from Hawaii State Ethics Commission, April 4, 2024 (excerpts)

A State Agency (“Agency”) requested an advisory opinion regarding whether it may hire former employees from a staffing agency during their one-year postemployment period. As discussed below, the Commission believes that the postemployment law, Hawaiʻi Revised Statutes (“HRS”) § 84-18(c) prohibits former employees from representing a “business” before their former state agency during their one-year post-employment period. So long as the staffing agencies are operating solely to facilitate the former employee’s work on behalf of the State, the Commission does not believe that the former employees are violating the post-employment law by communicating or interacting with the Agency’s personnel.

I. Background

The Agency provides specialized services to clients and employs highly skilled personnel to deliver those services. The Agency also employs temporary employees from staffing agencies to meet its employment needs, which is ordinary practice in the Agency’s field. The temporary employees are employed on an hourly basis and are typically contracted through a staffing agency, which assists the employee in obtaining work for a fee, for instance by processing paperwork, facilitating payments, or arranging travel. …

II. Analysis

…Typically, employees who leave state service are not permitted to communicate with their former state agencies on behalf of their private employers during their one-year post-employment period.

An exception to the post-employment law allows state employees to provide their personal services “to act on a matter on behalf of the state” even within the one-year “cooling off” period. See HRS § 84-18(d); see supra n.2. The Commission has previously held that work performed under this exception must generally be done through personal service contracts, rather than through a larger company. See Adv. Op. No. 2021-2 at 3 n.4, available at https://files.hawaii.gov/ethics/advice/AO2021-2.pdf. …

… the Commission believes that the post-employment law would not prohibit a former employee from assisting their former agency for pay on behalf of a staffing agency if the agency is solely facilitating a transaction between a former employee and their state agency as contemplated by HRS § 84-18(d). A former state employee may not have the interest or capacity to address human resource issues, such as withholding or calculating taxes owed, insurance coverage, or other logistical details involved in entering into a contractual relationship with the State of Hawai‘i. In this case, it serves a public interest to allow a third party to navigate these challenges on behalf of a former state employee….

Where a private business is not directly profiting from the State of Hawai‘i, the risk of unethical behavior diminishes. The primary motivation for the private business’s involvement is to offer a service to the individual employee, and not to gain undue advantage from the employee’s relationship with a state agency.

This interpretation of the post-employment law is limited to situations where the State agency is specifically trying to hire a former employee on behalf of the State and the staffing agency is facilitating the relationship by addressing administrative and contractual issues….

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