Local Regulation of Ethical Behavior
What are “ethics?" It seems like a simple question, but ask several people and you are likely to get several different answers. When the question involves the ethical behavior of local government officials and employees, the answers might include things like:
Avoiding conflicts of interest.
Disclosing financial interests and other relationships.
Avoiding criminal behavior.
Keeping confidential information confidential.
Properly using authority and acting cooperatively.
Treating people fairly and equally.
The ethical behavior of all public officials and employees is of significant concern to everyone. Not only is it critical for officials and employees to act ethically, it is important to avoid even the appearance of unethical behavior. It is understandable, therefore, that towns and cities want to take appropriate steps to maintain the highest level of conduct. The question is, what can municipalities do, and how does the law already address issues of ethics?
Home Rule? Not Really.
Contrary to popular belief, New Hampshire is not a home rule state. Despite our political tradition of local control, New Hampshire’s Constitution does not grant any power directly to municipalities. Our municipalities only have authority to act if the state legislature gives it to them through a statute. “Towns only have such powers as are expressly granted to them by the legislature and such as are necessarily implied or incidental thereto." Girard v. Allenstown, 121 N.H. 268 (1981).
This means that when a town, local board or official wants to take a certain action, they must find a law that grants them that authority. It is not enough to conclude that there is no law prohibiting the action; silence in the law is usually a prohibition against that particular municipal action.
Given all of that, what may a municipality legally do to enforce ethical behavior among its employees and officials? Perhaps surprisingly, no single statute authorizes a town or city to adopt a broad “ethics ordinance" addressing every aspect of ethics, binding both employees and officials, and authorizing a local ethics board to remove an official from office. Instead, there are several different statutes that allow towns and cities to enact certain specific kinds of ordinances. There are also specific statutes that prohibit certain conflicts of interest, such as RSA 673:14, which prohibits land use board members from participating in matters when they have a direct personal or pecuniary interest in the outcome or when they would be disqualified from sitting as a juror at a trial upon the same matter. Several other statutes make certain behavior by officials and/or employees illegal, and there are various circumstances in which a municipal board or a court may remove an official from office for violations of those statutes.
Local Conflicts of Interest Ordinances
A charge of conflict of interest often implies unethical behavior, yet it is not always easy to distinguish an actual conflict of interest from an unsubstantiated allegation. A conflict of interest arises “when a public officer votes on a matter in which he has a direct personal and pecuniary interest" which is “immediate, definite, and capable of demonstration; not remote, uncertain, contingent, and speculative…." Atherton v. City of Concord, 109 N.H. 164 (1968). As the Court in Atherton explained, “The reasons for this rule are obvious. A man cannot serve two masters at the same time, and the public interest must not be jeopardized by the acts of a public official who has a personal financial interest which is, or may be, in conflict with the public interest."
One of the challenges with conflicts of interest is that the existence of a conflict is, to a great extent, a question of degree to be determined on a case-by-case basis. Towns and cities may wish to adopt a conflicts of interest ordinance to provide more certainty. However, as with any exercise of municipal authority, a municipality can only enact a valid, enforceable ordinance if a law grants it the authority to do so. RSA 49-C:33, I(c) allows cities to include a conflict of interest provision in their charters. In addition, the legislative body of a city or town (town meeting, town council, city council or mayor and aldermen) may adopt a conflict of interest ordinance under RSA 31:39-a. An ordinance adopted under this statute may apply to both municipal officials and employees. Needless to say, a concise, carefully drafted ordinance can clarify what behavior is reasonably expected of people, whereas poor drafting can have the opposite effect.
In 2006 the legislature enacted RSA 21-G:21-:27, a code of ethics for the executive branch of state government, which can be a source of ideas for local legislation. A simple example is RSA 21-G:22, which clarifies the limit of the “personal and pecuniary interest" that must be avoided: “Executive branch officials shall not participate in any matter in which they, their spouse or dependents, have a private interest which may directly or indirectly affect or influence the performance of their duties." RSA 21-G:29-:30 creates an Executive Branch Ethics Committee, which is authorized to issue written advisory opinions upon request of officials in specific situations. These opinions, edited to maintain confidentiality, may be found at www.doj.nh.gov/ethics/.
Significantly, however, because municipalities may only take those actions authorized by statute, a conflicts of interest ordinance adopted under RSA 31:39-a may only address the issues listed in the statute and those that are necessarily implied or incidental to those issues. See Girard, 121 N.H. at 271. A local ordinance may address only the following subjects:
definitions of conflicts of interest;
regulation of conflicts of interest;
provisions requiring disclosure of financial interests for specified officers and employees;
establishment of incompatibility of office requirements stricter than those otherwise established by law; and
establishment of conditions under which prohibited conflicts of interest will require removal from office.
Despite the clear limits of this statute, local ethics ordinances often include unauthorized provisions. For example, many ordinances authorize the creation of a local ethics board or committee with the authority to investigate complaints and to punish or remove employees and officials for violations. Legally, a local ethics committee could be established to offer non-binding advice to the selectmen or other officials regarding alleged ethics violations, but not to remove municipal officials. Although a town or city may establish the conditions under which a prohibited conflict of interest will require removal from office, RSA 31:39-a is quite clear in providing that only the superior court can remove an official under these provisions.
The termination of an employee, in contrast, does not usually require action by a court, but this is a step that should be taken after careful consideration and only by the governing body or designated official, not by an ethics committee. There may be other significant factors to consider before removing an employee, such as any procedural or other rights that the employee may have under law (such as a police or fire chief) or under a collective bargaining agreement or individual employment contract.
Another unauthorized provision that has found its way into local ordinances is a declaration that certain operations of an ethics committee are exempt from disclosure under RSA Chapter 91-A, New Hampshire’s Right to Know Law. Municipalities may not change the scope of RSA 91-A or declare that certain activities or records will not be available to the public. The ability to enter a nonpublic session during a public meeting must in each instance meet the specific conditions set forth in RSA 91-A:3. In addition, exemptions regarding the public availability of governmental records are construed narrowly and are often decided under RSA 91-A:5 on a case-by-case basis based on the facts and circumstances of each matter. The activities and records of an ethics committee must be considered individually under the same standards as all other municipal activities and records.
It is also common to find a local ethics committee charged with investigating ethical complaints about employees or officials. However, although a committee of this nature may be very helpful in addressing thorny conflicts of interest questions, the referral of certain matters to the committee could result in even greater exposure to liability for the municipality. For example, referral of an employment harassment claim to an ethics committee may result in a breach of confidentiality because the employer likely owes the employee certain confidentiality measures. Likewise, the referral of a matter regarding fraud or misappropriation of funds may result in a charge that the municipality has interfered with a criminal investigation. The key to the success of any such committee, therefore, will be the quality of its membership and an understanding of the legal limits of its authority. Members must be intelligent, respected members of the community who are willing and able to meet on relatively short notice, to provide timely, thoughtful responses, and to refer matters to legal counsel as appropriate.
To address issues outside the scope of an ordinance under RSA 31:39-a, any municipal board is free to adopt its own, non-binding set of guidelines to help members understand the ethical standards the board wishes to uphold. These policies are not binding, and no board (including the Board of Selectmen) has the authority to enact ethical guidelines to bind members of other boards. However, the exercise of creating a policy can be helpful, and educating new members about the standards to which all board members should aspire can provide much-needed guidance.
It is also important to distinguish between the regulation of municipal officials and the supervision of municipal employees. Since municipal employees are subject to the supervision of the department heads and/or the governing body, the governing body (like any other employer) may adopt personnel policies to govern employees. Personnel policies may address virtually every aspect of the employment relationship, including expectations regarding ethics and behavior, and the discipline and termination consequences of violating those expectations. Therefore, even if some of the provisions of a local “ethics" policy go beyond the permissible subjects in RSA 31:39-a and thus would not be enforceable against municipal officials, those requirements might be enforced against its employees if incorporated into the municipality’s personnel policies.
Other Legal Regulation of ‘Ethics’
Many state laws prohibit certain unethical behavior by public officials and impose civil and/or criminal penalties. For example, the corrupt practices provisions of RSA Chapter 640 prohibit all state and local public officers or employees from engaging in bribery, improper influence, acceptance of gifts and improper compensation, and the purchase of public office. These and similar state laws are binding upon public officials without any need to enact a local ordinance.
Libel and Slander
Another check on unethical or improper behavior of local officials and employees is the tort (or civil wrong) of defamation, which includes both oral (slander) and written (libel) defamation. A “defamatory" statement tends to lower a person in the esteem of any substantial and respectable group, even if that group is quite a small minority. Touma v. St. Mary’s Bank, 142 N.H. 762, 766 (1998). It occurs when a person fails to exercise reasonable care in publishing (in print or by speaking) a false and defamatory statement of fact about someone to a third party without any valid privilege. Pierson v. Hubbard, 147 N.H. 760, 763 (2002). A statement of opinion is generally not actionable as defamation unless it is reasonably understood that the opinion is based upon defamatory facts. Duchesnaye v. Munro Enterprises, Inc., 125 N.H. 244, 249 (1984).
Defamatory statements might be privileged in certain situations. For example, statements made in the legislative process (such as during town meeting) or during judicial proceedings are absolutely privileged. Other statements during quasi-judicial proceedings (such as planning board hearings) might be protected by a qualified privilege if they are published on a lawful occasion, in good faith, for a justifiable purpose, and with the belief, founded upon reasonable grounds, that the statement is true. Voelbel v. Bridgewater, 144 N.H. 599, 600 (1999); Pickering v. Frink, 123 N.H. 326, 329 (1983).
However, there is no specific privilege for municipal officials conducting town business, so they generally are not protected from liability for making any defamatory statements about other people during committee meetings. It is possible, therefore, for an official or employee to be sued by someone claiming that the official or employee has defamed them.
RSA Chapter 91-A, New Hampshire’s Right to Know Law
Frequently, charges of “unethical behavior" involve the allegedly improper handling of sensitive information. Many of these issues are already governed by RSA Chapter 91-A, which exists “to ensure both the greatest possible public access to the actions, discussions and records of all public bodies, and their accountability to the people." RSA 91-A:1. Municipal boards, commissions and other “public bodies" are subject to this law, as are almost all records pertaining to municipal business.
With limited exceptions, meetings of all public bodies must be open to the public, with proper notice at least 24 hours before the meeting and publicly-available minutes within five business days afterward. RSA 91-A:2, II. A public body may only meet in a nonpublic session for the narrow list of reasons provided in RSA 91-A:3, II, and even minutes of a nonpublic session will become publicly available unless they are properly sealed. RSA 91-A:2-a clarifies the legal limits of communications among members of a public body outside a public meeting, whether in person, by electronic communication or by any other method. It is now much clearer that e-mail, instant messaging and other forms of communication that occur outside of the public eye (or ear) legally cannot be used to circumvent the spirit and purpose of the law. RSA 91-A:2-a.
Governmental records are similarly regulated under this statute. All governmental records must be made available to the public upon request for inspection and copying during regular business hours. RSA 91-A:4. The only categories of records that do not have to be disclosed are those listed in RSA 91-A:5. The New Hampshire Supreme Court construes these exceptions “restrictively," presuming that records should be disclosed to further the purpose of the law. Goode v. N.H. Office of Legislative Budget Assistant, 145 N.H. 451 (2000).
It is particularly important for all local officials and employees to understand the requirements and limitations of this law because there are serious consequences when it is violated. When someone’s access to public meetings or public records is wrongfully denied, the municipality may be required to pay that person’s attorney’s fees and costs. When a specific official or employee acts in bad faith in refusing to allow access, the court may require the individual official or employee to pay those attorney’s fees and costs. In addition, a court may invalidate any action taken by a public body in a meeting that violates the open meeting requirements of the law. Finally, if any municipal official discloses confidential information that he or she knows or should know is protected from disclosure under RSA 91-A, that official may be removed from office by a court for violating his or her oath of office.
In towns with a charter and in cities, the elected body (selectmen, town council, city council or mayor and aldermen) is also governed by a statute prohibiting interference with the actions of the chief executive officer:
“The elected body shall act in all matters as a body, and shall not seek individually to influence the official acts of the chief administrative officer, or any other official, or to direct or request, except in writing, the appointment of any person to, or his removal from, office; or to interfere in any way with the performance by such officers of their duties. Any member [who does so], as determined through procedures established in the charter, shall forfeit his office." RSA 49-C:19 (city charters); RSA 49-D:4 (town charters).
In other words, no single member of a governing body in a municipality with a charter has the authority to direct or interfere with the official activities of the chief executive officer of the municipality or other officials. Furthermore, it should be noted that even in towns without a charter, the selectmen are only authorized to act as a board by majority vote. RSA 41:8. Although there is no statute authorizing removal of a selectman for improper interference, the old saying that “one selectman cannot do anything" is still valid. Only the board may act.
Christine Fillmore and David Connell are attorneys with the New Hampshire Local Government Center’s Legal Services and Government Affairs Department.