February 20, 2010
Dear Charter Commission Members:
The charter commission members have raised several questions about certain Charter
provisions:
Conflicts of interest-related questions about Article 5, Section 21
Article 5, Section 21 of the charter provides for depositories for city funds. The question
of how to reduce the potential for conflicts of interest arising from this provision was asked.
I have attached a short, but I hope comprehensive, examination I did on the Conflicts of Interest
Law in 2008. It may help answer many conflicts of interest questions that arise, including this
one.
Many cities have such provisions in their charters. The city’s money needs to be deposited
someplace, and the city council is the body obviously best suited to determine the depositories,
subject to the rules the state comptroller makes relative to the security supporting such deposits.
Until the Conflicts of Interest Law was changed a number of years ago to distinguish
between direct and indirect conflicts of interests, that law made it extremely difficult for bank
officers to serve on city councils. Presently, the Conflicts of Interest Law defines “direct interest”
as “any contract with the official personally or with any business in which the official is the sole
proprietor, a partner or the person having the controlling interest.” However, unless a city council
member is the owner or majority stockholder of a depository bank, at most he has an indirect
interest in the depository contract with the city. Indirect interests can be disarmed by the bank
officer’s acknowledgment of the interest. Any municipal officer who has either a direct or an
indirect conflict of interest can abstain from voting on the matter in which he has the interest.
These are imperfect solutions to city officials handling the city’s money in an imperfect world.
I have tried to make the point orally to the charter commission that if a conflicts of interest
provision is too restrictive, it prohibits a large body of public-minded people who are
knowledgeable about finances and other municipal problems and who might otherwise serve as
municipal officials ineligible for that service. The General Assembly recognized that problem
when it changed the Conflicts of Interest Law to distinguish between direct and indirect financial
interests.
Questions have also been raised about the conflicts of interest provisions in Article 5,
Section 32.
February 20, 2010
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I am not sure why this provision turned out the way it did when the city’s charter was
amended several years ago. Frankly, MTAS probably should have caught the problems with this
provision at that time. However, I did not even know until I researched the issue for the present
charter commission that a municipality could not make conflicts of interest charter provisions
more strict than the state conflicts of interest statute.
But as your City Attorney and I have both pointed out several times, the City Charter
reflected the general law modified manager-commission charter when it adopted Home Rule.
This provision was (and is) found in Section 6-35-412 of that general law charter, with two
modifications:
o The first modification provides that “Unpaid members of boards, commissions, and
committees and members of the equalization board, shall not be considered officers for
the purpose of this section.”
o The second modification provides simply, “See TCA 6-54-107 and TCA 12-4-101.”
With respect to the first modification, the members of some boards, commissions and
committees of the city probably are officers of the city, while the members of other boards,
commissions and committees are probably not officers of the city. It is doubtful that any of them
in either category are employees of the city.
In any event, I suspect that there are few, if any, members of such boards, commissions and
committees who have contracts with the city. But if it is assumed that some do, and that some may
have contracts with the city in the future, I have previously pointed out to the charter commission
that the conflicts of interest provisions of a municipal charter cannot be stricter than the general
law conflicts of interest laws. The reason is that the right to enter into contracts is a Tennessee
constitutional right that can be limited only by general law. Section 6-35-412 of the general law
modified manager-council charter reflected Tennessee’s Conflicts of Interest Law found at
Tennessee Code Annotated, 12-4-101when that charter was adopted by the General Assembly in
1957. But that statute was changed several years ago to distinguish between direct and indirect
conflicts of interest because it swept so wide that many persons were excluded from holding
municipal office.
I seriously doubt that Section 6-35-412 of the general law modified manager-council
charter was operative for “any financial interest” past the time the Tennessee Conflicts of Interest
Law made a distinction between direct and indirect conflicts of interest. For that reason a
successful conviction for “misconduct in office,” which is a criminal offense under Tennessee
Code Annotated, ' 39-16-402, would be extremely unlikely. That provision needs to be changed
to bring it into compliance with Tennessee Code Annotated, ' 12-4-101 et seq.
Likewise, because at that point Article V, Section 22 of the City Charter came into conflict
February 20, 2010
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with Tennessee’s Conflicts of Interest Law, I seriously doubt that any person charged with a
violation of that provision who is not in violation of Tennessee Code Annotated, ' 12-4-101, could
be found guilty of “misconduct in office” for the purposes of Tennessee’s Ouster Law or for the
purpose of the official in question paying back profits made under the contract at issue.
With respect to the second modification, it seems clear that the language “See TCA
6-54-107 and TCA 12-4-101,” was an attempt to make it clear that the violation of Article V,
Section 22, was tied to a violation of one of those conflicts of interest statutes, however, poorly that
effort was made. I pointed out the distinction between those two conflicts of interest statutes in
my letter to the charter commission on the question of whether a conflicts of interest provision in
the charter could be more stringent than in the conflicts of interest law, the main one of which is
Tennessee Code Annotated, ' 12-4-101 et seq.
It was suggested that the charter needs an affirmative action provision.
There has never been agreement among the proponents and opponents of affirmative
action whether that term involves goals or quotas. It can even be argued that today affirmative
action programs violate Title VII, they themselves inevitably being discriminatory. Based on the
recognition that such programs are themselves discriminatory, some of the basic rules that have
flowed from the application of affirmative action programs is that such programs must be remedial
(the corollary of which is that prior discrimination must be shown to justify such programs), they
must contain some means for determining when the imbalance at issue has been redressed, and
when the affirmative action plan “sunsets,” and the plan must not place an unreasonable burden on
innocent non-minorities and men. The U.S. Supreme Court has demonstrated increasing
disenchantment with affirmative action programs because notwithstanding the fact that they are
supposed to end at some time, they never do. For those reasons, it seems to me that affirmative
action provisions in charters are neither logical nor appropriate.
It was suggested that the charter needs to prohibit sexual preference discrimination.
Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against
an individual “with respect to his compensation, terms, conditions or privileges of employment,
because of such individual’s race, color, religion, sex, or national origin.” The Tennessee’s
Human Rights Act found at Tennessee Code Annotated, '4-21-101 et seq. substantively tracks
Title VII. It provides in Tennessee Code Annotated, ' 4-21-401(a), that:
It is a discriminatory practice for an employer to (1) Fail or refuse to
hire or discharge any person or otherwise to discriminate against an
individual with respect to compensation, terms, condition, or
privileges of employment because of such individual’s race, creed,
color, religion, sex, age or national origin....
February 20, 2010
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Generally, the Tennessee courts have held that Tennessee Human Right Act cases are
resolved under the same substantive law that Title VII cases are resolved.
The Personnel Ordinance 27-85 (assuming that is the current one) is consistent with Title
7; it provides that:
The City shall not discriminate because of race, color, gender,
religion, age, national origin, veteran statutes or because of physical
handicap which will not interfere with the performance of duties....
[Section 7.3]
Sexual harassment is also prohibited by the personnel policy. [Section 7.4]
In the U.S. Sixth Circuit Court of Appeals, the law of which applies to Tennessee, Title VII
prohibits gender discrimination, but not sexual preference discrimination. [See Vickers v.
Fairfield Medical Center, 453 F.2d 757 (6th Cir 2006).] That is also the rule in almost all the U.S.
Circuit Courts of Appeal. However, in many of the U.S. Circuits, claims of hostile work
environment and/or sexual harassment claims can be pursued by homosexual plaintiffs.
However, in the U.S. Sixth Circuit such claims are limited.
In Vickers, above, Vickers was perceived to be a homosexual. He alleged that the sexual
stereotyping of him as a homosexual in the workplace created a hostile work environment. The
court rejected that argument, reasoning that Vicker’s complaint of harassment was not related to
his gender:
Rather, the harassment of which Vickers complains is more
properly viewed as harassment based on Vickers’ perceived
homosexuality, rather than based on gender nonconformity .....
Ultimately, recognition of Vickers’ claim would have the effect of
de facto amending Title VII to encompass sexual orientation as a
prohibited basis for discrimination. In all likelihood, any
discrimination based on sexual orientation would be actionable
under a sex stereotyping theory if allowed to stand, as all,
homosexuals, by definition, fail to conform to traditional gender
norms in their sexual practices. Indeed, this may be Vickers’
intent; he argues in his brief that the unique nature of homosexuality
entitles it to protection under Title VII sex discrimination law.
February 20, 2010
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Further, at oral argument, Vickers argued that the act of
identification with a particular group, in itself is sufficiently gender
non-conforming such that an employee so identifies would, by this
very identification, engage in conduct that would enable him to
assert successful sex stereotyping claim. [At 764]
Neither did the law that allows same sex harassment claims help Vickers. In order to
make such a claim, the plaintiff had to show that:
Where the harasser making sexual advances is acting out of sexual
desire; (2) Where the harasser is motivated by general hostility to
the presence of men in the workplace; and (3) Where
the plaintiff offers Adirect comparative evidence about how the
alleged harasser treated members of both sexes in a mixed-sex
workplace....[At 764]
Vickers’ failed on that complaint because:
Nothing in Vickers’ complaint indicates that his harassers acted out
of sexual desire. Similarly, the complaint does not support an
inference that there was general hostility toward men in the
workplace. Finally, Vickers included no information regarding
how women were treated in comparison to men at FMC. In fact,
defendants-appellees maintain that Vickers worked in an all-male
workforce, an assertion that Vickers has apparently not disputed.
[At 764]
While I am not closely acquainted with the application of your City’s hiring and other
employment policies, I suspect that no inquiry is made as to employment candidates’ sexual
orientation, and I have never heard of any lawsuits filed against the city based on treatment any
employee has received based on his or her sexual orientation. If that is true, how the Sixth Circuit
handles sexual orientation cases hardly seems to be an issue in the City, and even if it is, the issue
could be addressed with an ordinance rather than a charter amendment
Sincerely,
Sidney D. Hemsley
February 20, 2010
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Senior Law Consultant
SDH/