*For those of you who had a remote and more than three channels plus PBS during your childhood, Let’s Make a Deal was a game show on CBS that first aired in 1963. A young Karen Haase faced off against Steve Williams in the show’s pilot, which has been sadly lost to the annals of television history.
Bobby put away his flip flops, Karen has both space heaters on in her office, and Steve has purchased and eaten six bags of Halloween candy. That's right, negotiation season is here again. Earlier this year, we wrote to stress the importance of being prepared with a comparability study in your back pocket and a careful review of your current agreement to drive your discussions at the table. (If you’re not feeling prepared after re-reading that post, don’t worry - it’s not too late!) Now, a decision from the Nebraska Supreme Court provides a timely reminder that being prepared for negotiations includes thinking through compliance with the Nebraska Political Accountability and Disclosure Act. Fortunately, as we’ll discuss below, the Nebraska Accountability and Disclosure Commission, which enforces the NPADA, has provided boards with clear guidance for compliance during negotiations.
Moore v. Nebraska Acct. & Disclosure Comm., 310 Neb. 302 (2021)
Last week, the Nebraska Supreme Court agreed that the chairperson for the board of trustees for a village in Nebraska could be fined $500 because he failed to comply with the NPADA with respect to a series of payments he received from the village.
The NPADA does not prohibit a contract with a board member if the contract is an agenda item approved at a board meeting, and the interested officer declares the nature and extent of his/her interest in the contract prior to its consideration, does not vote on issues related to the contract, and does not act for the governing body as to the inspection or oversight of the contract’s performance.
In the Moore case, the evidence demonstrated that the chairperson received regular payments from the village for work he performed. Payments were based on an hourly rate of pay approved by the board, and were made after the chairperson submitted payment requests documenting his hours of work. The board would vote on the payments, but these payments were not included as agenda items, the chairperson did not regularly declare his interest in the payments, and the chairperson did not regularly abstain from voting on the payments. The payments totaled $32,917.18 over three years.
The chairperson argued that the work he performed for the village, and the village’s subsequent payments, were not governed by the requirements of Section 49-14,103.01 because he did not enter into a formal contract with the village. The NADC, the district court, and the Supreme Court all disagreed, holding that the chairperson and the village entered into an implied contract governed by the NPADA. As a result, the Supreme Court held that the chairperson had violated the Act and that he was properly fined for that violation.
Negotiations and the NPADA
While the circumstances in Moore set up a straightforward issue under the NPADA, negotiations with your employees raise much more complex issues. In the past, these issues were further confused by the NADC’s inconsistent advice to boards engaged in negotiations. Fortunately, last October the NADC issued a written Staff Opinion clarifying the application of the NPADA to staff negotiations. Specifically, the NADC clarified that:
Board members whose immediate family members (such as spouses) are governed by the negotiated agreement may vote to approve the agreement, but may not participate in negotiations.
Board members whose immediate family members are classified employees may vote on a percentage or set increase for classified employees, generally, as long as they have not played any role in setting the increase and the increase isn’t specific to the immediate family member.
Board members may not participate in negotiations on behalf of the Board when those negotiations will determine his or her own compensation. So a board member who coaches may not serve on the negotiations committee.
Board members may not vote to approve a bargaining agreement or contract that determines his or her own compensation. So a board member who coaches may not vote on the CBA.
Conclusion
As Moore demonstrates, board members may be fined for violations of the NPADA, and must be mindful of the Act’s requirements when voting on or negotiating contracts or agreements that affect the compensation of themselves or immediate family members. If you have any questions about the application of the NPADA to proposed or pending board action, you should feel free to call Karen, Steve, Bobby, Coady, Tyler, or Jordan, or shoot all of us an e-mail at ksb@ksbschoollaw.com.