FACULTY AND STAFF OUTSIDE ACTIVITIES
November 5, 1999
Patricia L. Friend
The Johns Hopkins University
Baltimore, Maryland
I.
Introduction
Issues of conflict of interest and conflict of commitment have challenged colleges and
universities for more than three decades. A regular topic at NACUA annual conferences and
workshops, these issues have occupied a great deal of our time and effort as we have grappled
with accurately defining the problem and identifying effective and workable solutions to the
problem in the context of the rapid changes brought about by increasingly complex relationships
among sponsors of research, businesses that market the products of research, our faculty and our
institutions. New opportunities to develop the results of research into commercially viable
products have presented researchers and institutions with new economic incentives, but also have
confronted them with conditions that are at odds with the principles of free and open inquiry and
dissemination of results that lie at the heart of academic research.
In 1989, the federal government proposed a deceptively simple solution to these issues-require disclosure of potentially conflicting interests by every individual within an institution
whose responsibilities included any decision making authority over sponsored research, and
prohibit absolutely any financial interest by an individual working for an institution with an
entity having an interest in the research. The strong negative reaction to this proposal reflected
the general understanding that such an absolutist approach was neither necessary nor workable,
and the proposed regulations were quickly withdrawn.
Recognizing that these relationships are not intrinsically bad and that they can, in fact, be
beneficial to both the institutions and its faculty, colleges and universities nevertheless
recognized that it was necessary to prevent the relationships from intruding on scientific
objectivity and interfering with the disclosure of scientific discovery. They developed their own
policies and procedures that addressed, among other things, ownership of intellectual property,
dissemination of research results, and potential conflicts of interest and conflicts of commitment.
In addressing the issues of conflict of interest and conflict of commitment, colleges and
universities accepted that they benefitted from their faculty members’ involvement in
professional activities outside the institution. They recognized that the best way to safeguard
institutional principles is through full disclosure of potentially conflicting activities and taking
steps to prevent a compromise of objectivity, whether perceived or actual. Thus, such activities
and relationships would not be banned outright unless other, less drastic measures were
ineffective. In 1995, the Department of Health and Human Services and the National Science
Foundation, adopted regulations applicable to sponsored research taking essentially this
approach. Institutions must have policies that require disclosure of potentially conflicting
interests by investigators and that establish institutional steps to remediate any conflicts found to
exist.
With the experience of several years of these policies being in force, is it possible to tell
that they have been effective in addressing the issues they were designed to address? Are there
issues that are not addressed under these policies that should be addressed? This outline looks at
the experience of Johns Hopkins University in the implementation of its School of Medicine’s
policy on Conflict of Interest and Conflict of Commitment. The outline then focuses on two
areas specific issues of concern to colleges and universities, namely, accounting for faculty
members obligations to the institution in balance with outside activities (the day a week rule) and
faculty activities adverse to the institution.
II.
The Johns Hopkins University School of Medicine Policy on Conflict of Commitment
and Conflict of Interest
A.
Overview of the Policy
The School of Medicine adopted the precursor of its current Policy on Conflict of
Commitment and Conflict of Interest in 1989. A copy of the current policy, updated in 1994, is
attached to this outline. The policy states that the primary professional obligation of its full time
faculty is to the School of Medicine, but recognizes that the School benefits from outside
professional activities of the faculty. Faculty are cautioned to avoid commitments that
compromise scholarly independence and are obligated to disclose potential conflicts of interest in
writing before accepting a commitment. Reports are made to department directors; if the activity
is approved by the department director, the report is submitted to the administrator of the
Committee on Conflict of Interest who reviews it for compliance with University and School
policy. Certain matters are referred to the Committee on Conflict of Interest.
B.
Requirement for a written report
The policy identifies nine circumstances in which a written report is required. These
include:
1.
When the aggregate time for all outside activities exceeds 26 days per
year;
2.
When the outside activity requires a written agreement;
3.
As directed by the department director in special circumstances, such as in
connection with promotions;
4.
When the activity calls for the use of the University’s name and logos;
5.
When the activity calls for the use of University facilities and resources;
6.
When the activity provides for ownership or licensing of intellectual or
tangible property to someone other than the University;
7.
When the activity restricts the reporting of the activity or information
developed by the faculty member;
8.
When the relationship of the faculty member to an outside party might
appear to influence the conduct of University business or research;
9.
When the activity provides remuneration for clinical practice in addition to
the faculty member’s University salary.
C.
26 day per year reporting threshold
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With regard to the reporting threshold of 26 days per year, the policy makes clear that it
is
not a limit. The maximum amount of time any one faculty member can devote to outside
activities is determined with the department director. Intermittent activities, such as lectureships,
conferences and scientific and professional meetings are not included unless they fall into
another category. Ongoing relationships, consultations, research, teaching, laboratory testing,
memberships on boards are reported.
D.
Numbers of disclosures
The Office of the Committee on Conflict of Interest received about 250 disclosures
during the last fiscal year. The majority of these (190) involved written agreements for
consulting activities and membership on scientific advisory boards. Included within these are a
certain number of proposed equity and other financial interests with outside organizations and
proposals for those organizations to sponsor ongoing research, which were referred to the
Committee for review. The balance (60) comprised nondisclosure agreements and other
activities.
Disclosures come from several sources, including recognition by the faculty member of
the need to disclose; disclosure on forms submitted to the institutional review board and to the
Office of Research Administration; agreements negotiated with the Office of Technology
Licensing; and disclosures in the annual salary letters that responds to a specific question about
outside activities. The School of Medicine does not have an annual disclosure reporting form, as
such. The experience with broad reporting requirements, such as those on the annual salary
letter, is that the activities reported are for the most part attendance at conferences, presentations
and the like--even membership on community association boards. Disclosures that are made
through other channels, such as the IRB, research administration, and technology licensing, are
generally thought to capture most of the relationships that require review.
E.
Staff review
When a disclosure reaches the Office of the Committee on Conflict of interest, the
administrator sends a formal disclosure reporting form to the faculty member involved. Most
disclosures involve only review by the administrator of the Committee on Conflict of Interest, as
the activities do not trigger review by the Committee. The administrator reviews the proposed
agreements for compliance with University and School policies and returns them to the faculty
member with required changes noted, if any. The review for compliance includes the intellectual
property policy, a determination of the appropriateness of the activity, the use of the University
name, among others. If the review discloses a significant time commitment or large
compensation to the faculty member, the administrator directs the attention of the department
director to those points. The department director has the authority approve the arrangement or
suggest modifications to the faculty member.
F.
Committee review
The policy requires review by the Committee on Conflict of Interest in the case of
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proposals for sponsored research when the faculty member will receive a royalty on the sale of
products based on the research or an equity interest in the organization sponsoring the research
or to which the research is licensed. The Committee also considers proposals for a faculty
member to have a management or directorship in an outside organization, proposals for research
by a faculty member whose supervisor has an equity interest in the sponsor, and proposals for
research sponsored by an entity that offers a royalty or equity interest to nonfaculty employees or
students. The Committee, which meets one time per month, considers from four to 15
disclosures per month. Most cases are considered and decided at the same meeting, although
some more complex cases, particularly those involving equity and royalty interests, may require
additional consideration.
The Committee is advisory to the Dean of the Medical Faculty. The Committee can
recommend that an activity be turned down or conditioned. Outright rejections are rare,
occurring one or two times per year. Every case results in a recommendation of disclosure of the
interest in presentations, publications and consent forms, and the administrator provides standard
disclosure language for the faculty member to use.
Frequently, the Committee retains responsibility to review the timing of the exercise of
stock options or sale of stock, often requiring that these be delayed until after the research is
completed and reported. The Committee occasionally requires shares of stock to be placed in
escrow until after research is completed and reported. In cases in which research is ongoing, the
Committee reviews the timing of any announcements related to the research and attempts to set
an appropriate trading window that is independent of research activities. In some cases the
Committee has directed a change in the faculty member’s role with respect to the research,
requiring the inclusion of a co-principal investigator or oversight of the research by an individual
or committee.
G.
Trends
The caseload of the Committee on Conflict of Interest, not surprisingly, has increased
since the Committee’s inception in 1992. There are ongoing efforts to make faculty members
aware of the policy and the need to disclose outside relationships. There is an increasing number
of relationships requiring disclosure and review by the Committee. In addition, the Committee is
seeing and expects to see in the future requests to exercise transactions with stock that previously
were limited by the Committee while research was ongoing.
III.
Day per week rule
A.
Overview
Many institutions, recognizing that they benefit when their faculty m
embers are involved in professional activities outside those they perform for their institutions,
permit their faculty to devote a portion of their time to outside activities so long as the amount of
time they spend on those activities does not interfere with their principal professional
obligations. Many colleges and universities have quantified this time they permit faculty to
spend on outside activities to roughly one day per week. Faculty, however, do not ordinarily
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pick a day, say Wednesday, and say, “This is my day a week, and I have no responsibilities to
the University this day.” Thus, it is commonly understood that “one day per week” is a standard
equating to roughly 20% of professional effort.
Questions arise as to how that 20% is applied and what activities are included within it.
There are no comprehensive studies faculty outside activities and the amount of time faculty
spend on those activities in contrast to the amount of time they spend on their university
responsibilities. Rather, most of our institutions have relied on the fact that many faculty
members do not take advantage of the day per week allowed them, and that those who do use it
appear to be quite good judges of the balance between their principal professional obligations
and their outside activities. Generally, their consultancy activities, along with their presentations
and attendance at scientific and professional meetings, take place in blocks of time that are easily
quantifiable and/or can coordinate with the time needed to meet obligations to the university.
Occasionally, faculty members have taken the day per week literally and have attempted
to carve out a strict divide between the two, usually with reference to the standard 40 hour work
week. There are legal implications that need to be considered when this happens.
B.
Fair Labor Standards Act issues
Faculty members generally are treated as professionals exempt from the minimum wage
and overtime requirements of the Fair Labor Standards Act, 29 U.S.C. § 213 (a). This means
that they are paid a salary to perform their responsibilities, namely to teach their courses,
conduct their research, care for patients and perform various service activities for their college or
university regardless of the number of hours worked. Exempt employees are responsible for the
results of their work, primarily, and secondarily, for their time. Generally, discussion of the time
worked by exempt employees, particularly in terms of numbers of hours worked, invites scrutiny
of the exempt employees’ responsibilities and whether they are exempt. In light of the strict
interpretation that is given to exemptions from FLSA, any effort to quantify the time spent by
faculty members on their university responsibilities must be undertaken with a clear
understanding that the inquiry will not affect the actual compensation paid to the faculty
members. When a faculty member attempts to establish for him or herself a forty hour work
week, and then to segregate his or her eight hours for the day per week, this focus on precise
numbers of hours worked is, inconsistent with his or her status as an exempt employee, not to
mention inconsistent with the faculty members actual responsibilities.
C.
Time reporting for sponsored research
Faculty members whose compensation is paid under federal research grants are
responsible for accounting for their time on those grants relative to their time on other activities.
One of the methods for tracking time under OMB Circular A-21 is the personnel activity report.
Faculty members whose full time salaries are supported from their federal research grants must
certify the percentage of time they spend on those projects, as well as time spent on
administrative responsibilities and on instruction and departmental research. Grant budgets may
not be charged for faculty members’ outside activities, nor are such activities properly included
as departmental administration expenses, which are included in the indirect cost pool. For those
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faculty members who do have significant outside activities, it is important that the university
carefully evaluate their activity reports for compliance with government accounting
requirements.
D.
Hidden issues
Often the effort by the faculty member to establish a strict forty hour work week and to
account for his or her time in this manner is an indication that the faculty member’s principal
professional activities are not those performed for the university, but rather the outside activities.
Thus, the faculty member is giving only 32 hours to the institution, albeit during the workweek,
but has outside activities far in excess of eight hours, and probably the 32 hours he or she is
devoting to university responsibilities. When questioned about these activities, moreover, the
faculty member is likely to demur, claiming the university has no right to inquire into what he or
she is doing during off hours. Thus, it is important to have a policy that requires reporting of
outside activities that can be used to enforce disclosure.
E.
What is included
Some policies include all activities that fall outside the direct responsibilities of teaching,
research, clinical care and service required of faculty members. Thus, included within the day
per week would be presentations and attendance at scientific and professional meetings and
participation on the board of editors of journals, which are generally unpaid, as well as
consulting and board memberships of outside organizations that are paid. Other policies set a
lower reporting threshold, such as the Johns Hopkins School of Medicine policy, but exclude
presentations and attendance at meetings of professional and scientific organizations.
IV.
Activities of faculty members that are adverse to the institution
Some activities of faculty members place them at odds with the interests of their
employer institutions. The classic example is the faculty member who serves as an expert
witness on behalf of a party in litigation with the employer. What are the limits institutions can
set on these kinds of activities and what steps can institutions take to limit the damage?
A.
Issue of freedom of expression
To foster the freest and most open inquiry within their walls, colleges and universities
have accorded their faculties broad freedom to speak and write on all topics without interference
from the institution. While faculties in both public and private institutions enjoy academic
freedom, in public institutions, these rights have the additional protection of the First
Amendment. Cases decided on First Amendment grounds are illustrative of the breadth of the
free speech rights of faculty and illustrate vividly the point that activities that to a lawyer would
clearly be a conflict of interest, are matters of freedom of expression to a member of the faculty.
B.
The case law
Beginning with the case of Pickering v. Board of Education, 391 U.S. 563 (1968), the
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Supreme Court has narrowly limited public employers’ authority to control the speech of their
employees. The Court has required a balance of the public employee’s right to speak out on
matters of public concern with the interest of the public employer in promoting the efficient
delivery of the services it provides through its employees. In Pickering, the Court concluded that
a public high school teacher who was critical of a school board’s explanation of the expenditure
of building funds was neither in a position to the board requiring loyalty to the board or in a
position that would make it difficult to counter the harmful effects of his words because of
special access to the facts.
Subsequently, in Branti v. Frankel, 445 U.S. 507 (1980), the Supreme Court disapproved
of a decision by a new, Democratic public defender to remove two assistant public defender from
their positions solely because they belonged to the Republican party. The Court found that the
confidential relationship the public defender said he needed with his assistants was really a
confidential relationship between the assistants and the clients of the office. Since both
assistants were performing their responsibilities satisfactorily, they could not be removed solely
because of their political beliefs.
In Connick v. Meyers, 461 U.S. 138 (1983), the Court found the balance in favor of the
public employer. In that case, an assistant district attorney objected to a proposed transfer and
sent a questionnaire to a number of her colleagues that asked questions about the fairness of the
supervisors and morale in the office. The questionnaire also asked about whether the assistants
felt compelled to make contributions to political campaigns supported by the supervisors. The
Court recognized that public offices could not function if every employment decision became a
constitutional matter and that if the questionnaire was not speech on a matter of public concern,
then there was no need to consider the matter further. While the Court believed that the
questions about compelled contributions did touch on matters of public concern, overall the
questionnaire was designed to support the individual employee’s grievance with her supervisors
and did not constitute protected speech.
Subsequently, in Waters v. Churchill, 511 U.S. 661 (1994), the Court recognized the
principle implicit in Connick, that as an employer, the state has a stronger interest in promoting
the efficient and effective achievement of its goals than when it is acting as a sovereign. The
Court held that a state employer could take action with respect to an employee who had spoken
critically about her employer to an individual who was being recruited if the employer conducted
a reasonable inquiry into the facts. The Court found that the speech in that case was not on a
matter of public concern and therefore not protected, or even if it was on a matter of public
concern, it was nonetheless disruptive and not protected.
In most cases in which college and university faculty members will be retained as experts
against their employers, the opinions they offer will touch on matters of public concern. This
was precisely the issue presented in Hoover v. Morales, 164 F.3d 221 (5th Cir. 1998). This case
presented a challenge to two policies of Texas A & M University that were consistent with state
law. The first policy prohibited state employees from acting as consultants or expert witnesses
on behalf of parties in litigation against the state. The second prohibited payment of the salary of
a state employee who acts as a consultant or expert witness on behalf of a party in litigation
against the state. The case against Texas A & M was brought on behalf of several faculty
members who were expert witnesses against the state in its lawsuit against the tobacco industry
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and another faculty member who was appearing on behalf of a community association opposed
to the location of an incinerator. The court first concluded that this was not commercial speech
even if the individuals were being compensated, analogizing the speech to the speech of writers
who get paid for their books. The court had little difficulty in concluding that the speech of the
faculty members addressed matters of public concern. In the balance between the faculty
members interest in speaking out on matters of public concern and the state’s interest in
promoting the effective and efficient delivery of services through its employees, the court easily
concluded that the faculty members’ interest outweighed the state’s “amorphous interest in
protecting its interests.” There was little if any evidence that the expert testimony would in
anyway impact the delivery of educational services by the faculty members. Finally, the court
was troubled by the content discrimination inherent in the policies--the only speech prohibited
was that against the state, but faculty members were free to be consultants or expert witnesses on
behalf of the state.
C.
Conclusions
If a college or university permits a faculty member to engage in outside activities such as
consulting or appearing as an expert witness, any effort by the college or university to prohibit
that faculty member from engaging in those activities in a manner that is adverse to the college
or university is going to invite a challenge on academic freedom and, if a public institution, First
Amendment grounds. It is possible to conceive of a hypothetical case in which the college or
university might legitimately object--a sociology professor who is an expert on employment
discrimination appearing on behalf of an former employee of the department in a discrimination
case where the faculty member participated in the decision to terminate the employee. The
attempt to limit the faculty member from appearing, however, may have other consequences to
the litigation that need to be considered.
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