Conflict of Interests Policy

Conflict of Interests Policy
Effective Date: June 22, 2018
Revision Date: First Version
Responsible Office: Compliance & Equity

I. Scope 

This policy applies to William & Mary, including the Virginia Institute of Marine Science (the university).  It applies to all types of university staff, including operational, professional, executive, hourly, and student employees.  Certain laws and policies relating to faculty are described in this policy for informational purposes, but this policy does not establish new policy applicable to faculty. 

II. Purpose and Policy Statement 

Integrity is a core value of William & Mary.  We are committed to lawful and ethical behavior, and to being fair, honest, and trustworthy in our university activities.  All William & Mary employees and other community members are responsible for avoiding conflicts of interest and the appearance of such conflicts, under the Code of Ethics.

This policy reflects William & Mary's commitment to integrity, and helps ensure compliance with the Code of Ethics and with 

  • The Conflict of Interests Act (the State and Local Government Conflict of Interests Act, Code of Virginia 2.2-3100 et. seq.), which prohibits various financial conflicts of interest and requires certain employees to file statements of economic interest disclosures and to complete training
  • Virginia Executive Order Number 2 (2014 - updated as of February 2015), Personnel Directive Prohibiting the Receipt of Certain Gifts; Establishment of Executive Branch Ethics Commission.
  • Federal regulations addressing conflicts of interest arising in the context of sponsored research activities.
  • Rules governing procurement of goods, services, and construction (“procurement rules”).

This policy helps ensure that each employee is aware of the situations in which conflicts of interests may arise, and his or her obligations to prevent, avoid, and disclose conflicts of interest.  It prohibits certain types of conflicts and requires disclosure and/or management of other situations.  

III. Legal Compliance Notice

This policy includes and summarizes for employees various provisions of the Virginia Conflict of Interests Act and Executive Order Number 2 (2014), as well as other university policies.  This policy does not restate the full language of the laws.  The Conflict of Interest Act in its entirety applies to university employees according to its terms, and all employees are responsible for complying fully with the Act and all other applicable law.  Employees should be aware that failure to abide by the terms of the Conflict of Interests Act and other applicable laws may make them subject to legal penalties, including criminal prosecution, in addition to disciplinary or other employment action by the university.

These laws are complex, and the employee may need the assistance of his/her personal attorney. Employees may seek advisory opinions from the Virginia Attorney General on the Conflict of Interests Act, which serve as a bar to prosecution under the Conflict of Interests Act.  The Virginia Conflict of Interest and Ethics Advisory Council may also provide guidance regarding certain matters.  See Section VI of this policy for information regarding interpretation and enforcement. 

IV. Definitions
Conflict of Interest Committee

Conflict of Interest Committee is the William & Mary group organized to review and help ensure that conflicts of interests are managed, if appropriate (see Appendix A).  The group generally consists of the Chief Compliance Officer, the Chief Human Resources Officer, and the Chief Financial Officer and is advised by University Counsel. Other university officials may be included in the group on an ad-hoc basis as needed to address specific situations. 

Gift

Gift is defined in Virginia Executive Order Number 2 (2014) as anything of value to the extent that a consideration of equal or greater value is not received by the donor.  The Executive Order includes fourteen exceptions, including gifts on the basis of personal friendship (provided that the gift was not provided because of the employee’s official position); see Section V(A)(3).

Immediate Family

Immediate Family of an employee is defined by the Conflict of Interests Act as including (i) the employee’s spouse and (ii) any other person who resides in the same household as the employee and who is a dependent of the employee.  Virginia Executive Order No. 2 (2014) expands the definition of Immediate Family for purposes of Gift acceptance rules to also include (iii) any person who has a child in common with the employee and with whom the employee has a legally enforceable financial relationship, (iv) anyone who cohabits with the employee or has cohabited with the employee in the past 12 months (a “cohabitant”), and (v) any children of the employee or children of a cohabitant.

Personal Interest

Personal Interest is defined in the Conflict of Interests Act as a financial benefit or liability accruing to an officer or employee or to a member of his Immediate Family (using the Conflict of Interest Act definition of Immediate Family), where “such interest shall exist by reason of (i) ownership in a business if the ownership interest exceeds three percent of the total equity of the business; (ii) annual income that exceeds, or may reasonably be anticipated to exceed, $5,000 from ownership in real or personal property or a business; (iii) salary, other compensation, fringe benefits, or benefits from the use of property, or any combination thereof, paid or provided by a business or governmental agency that exceeds, or may reasonably be anticipated to exceed, $5,000 annually; (iv) ownership of real or personal property if the interest exceeds $5,000 in value and excluding ownership in a business, income, or salary, other compensation, fringe benefits or benefits from the use of property; (v) personal liability incurred or assumed on behalf of a business if the liability exceeds three percent of the asset value of the business; or (vi) an option for ownership of a business or real or personal property if the ownership interest will consist of clause (i) or (iv) above.”

V. Policy


A conflict of interests generally occurs when an employee has an interest that prevents the employee from acting impartially or limits their ability to act solely in the university’s interest.  The conflicting interest may be self-interest of the employee, or may be a competing duty or obligation to a third party. 

All employees are required to comply with this policy, including by disclosing actual or potential conflicts if required.   

Violation of this policy is actionable misconduct and may have external legal consequences.  A suspected, reported, or known violation will be addressed in accordance with applicable investigative and disciplinary procedures; see Section VI.  The Conflict of Interest Committee is a resource for employees with questions or concerns regarding conflicts of interest.

The policy sets forth below the kinds of conflict situations that may arise and specifies steps to avoid, remedy or manage the conflict. The list is illustrative but not all-inclusive:         

A. Gifts, Extra Compensation, or Other Benefits

This section A summarizes Conflict of Interest Act prohibitions, except as otherwise noted.  Employees with questions or inquiries regarding these Gift limitations are encouraged to contact University Counsel.  

For purposes of this policy, gifts and benefits made to or conferred upon the university for the benefit of the professional activities of a particular employee are considered to be a financial interest of the employee.[1]

1. Prohibitions Applicable to All University Employees.
Under state law, university employees may not accept:

  • or solicit anything of value for performing their jobs[2], except the compensation paid by the university in accordance with the Policy on Compensation;[3]
  • directly, or indirectly, any Gift valued at over $100, from any one source, singularly or in the aggregate over the course of any given calendar year (provided that Gifts of less than $25 each do not count towards the $100 total);[4]
  • any money, Gift, service, loan, or professional opportunity, etc. that reasonably tends to or is designed to influence employees in the performance of their university jobs;[5]
  • any business or professional opportunity when they know there is a reasonable likelihood that the opportunity is being afforded the employee to influence the employee in the performance of their W&M work;[6]
  • or offer anything of value for helping a third person obtain a job or a contract with a Virginia governmental or advisory agency, including any Virginia institution of higher education; or [7]
  • a Gift or benefit from someone who has interests in the employee’s university work, where the timing, frequency, or nature of the Gift or benefit would give rise to questions of impartiality or the appearance of using the employee’s office or position for private gain; [8]
  • directly or indirectly, any Gift from any lobbyist or any principal, employee, or agent of any principal. [9]

In addition, under Executive Order Number 2 (2014), no Immediate Family Member of any employee shall:

  • Solicit anything of value or accept, directly or indirectly, any gift from any lobbyist or any principal, employee, or agent of a principal (as "lobbyist" and "principal" are defined in Virginia's lobbying law ).
  • Accept, directly, or indirectly, any Gift valued at over $100, from any one source, singularly or in the aggregate over the course of any given calendar year (provided that Gifts of less than $25 each do not count towards the $100 total).

2. Additional Prohibitions on Employees Required to Complete Statements of Economic Interest. In addition to the prohibitions in Section 1 above, any employee who is required to file a statement of economic interest (see Section C, below) is prohibited from accepting, soliciting, or receiving any single gift with a value of more than $100 or any combination of gifts with an aggregate value of more than $100 within any single calendar year from a lobbyist, lobbyist’s principal, or a person or entity who is, or who is seeking to become, a party to a contract with William & Mary, except to the extent permitted by Section 2.2-3103.1 of the Code of Virginia.  

3. Exceptions:   Executive Order Number 2 (2014) defines gifts to exclude 14 items, including items that are donated to charity (without taking a charitable contribution), offers of certain tickets, admission or passes, financial aid normally awarded, and certain prizes or awards. 

B. Use of University Resources and Confidential Information; Use of University Name

1. University Resources. Employees may not use any university-funded or -supported resources for non-university purposes. University-funded or -supported resources include university facilities, administrative offices, work product, results, materials, property, records, or information developed with university funding or other university support. 

Exceptions: Employees may make occasional personal use of university resources that does not (1) interfere with job performance or (2) waste university resources, in compliance with the Acceptable Use Policy and, if applicable, the Policy on External Paid Employment.  An example of a permissible personal use of university resources would be using your office and university-provided computer on the weekend to work on a novel.  An example of an impermissible use would be using your office printer/copier to make 200 copies of a poster for a candidate for local government whom you are supporting or your child’s 200 page school project. 

Employees with questions about use of university resources should seek advice from their supervisor or unit head.  The Conflict of Interest Committee may also be able to provide information.

2. Confidential Information.  Employees may not use confidential information obtained because of their positions at William & Mary for the employees’ own economic benefit, nor shall they authorize access to such information. University faculty and staff should be wary of consulting arrangements through which they may risk sharing confidential or proprietary information. Employees must comply with the Data Classification and Protection Policy and the Acceptable Use Policy.

3. University Name.  Employees shall not use the university’s name in a manner that may imply that the university is associated in some way with the employees’ external activity or personal interest. Mere identification of the university as one’s employer is permitted, provided that such identification is not used in a manner that implies sponsorship or endorsement by the university

C. Statements of Economic Interest and State Training

Under State Law and Executive Order certain university employees are required to complete and file with the State statements of economic interest.  In these statements, employees are required to disclose certain financial interests, including financial interests of members of their Immediate Family (see definition of Personal Interest).  Completed statements of economic interest disclosures are available upon request to the public and subject to review by the university. 

Employees are advised that if a particular financial or other interest is prohibited by the Conflict of Interests Act or other applicable policy or law, disclosing that interest does not cure the violation. An employee who has a conflict of interest (under any provision of this Policy) must report the situation to the Conflict of Interest Committee for review and take any other action required by law or policy.  

Employees required to file statements of economic interest are also required to complete training provided by the State

Further information about these filing and training requirements is provided online through the Office of Finance & Administration (filing statements) and the Office of Compliance & Equity.

D. Transactions on Behalf of the University, Including Procurement, Hiring and Contracting

Employees generally may not participate in awarding, negotiating, reviewing or approving a financial transaction (including but not limited to purchases, contracts, and subcontracts ) involving the university and an entity in which the employees or members of their Immediate Family have a Personal Interest. This prohibition applies to contracts for goods and services, including (for example) entering into a contract for services by hiring a contractor.  In some situations, an employee may participate in such a transaction if he or she discloses the interest and obtains certain approvals (See Appendix B). [10] See Sections (E) and (F), below, for additional restrictions on hiring.

Employees who have responsibility for procurement transactions may not solicit, demand, accept, or agree to accept from a bidder, offeror, contractor or subcontractor any payment, loan, subscription, advance, deposit of money, services or anything of more than nominal or minimal value present or promised, unless consideration of substantially equal or greater value is exchanged.[11] There are also restrictions on such employees accepting an employment offer from a bidder, offeror, or vendor.[12] 

Employees must also have been delegated signatory authority under the Contracting and Signature Authority Policy.  Additional information related to procurement procedures is available from the Office of Procurement.

Questions or conflicts situations relating to procurement should be taken to the Director of Procurement.

E. Conflicts Arising from Family Relationships

For the purpose of this Section E, “relatives” and “family” should be construed broadly to include any relation by blood or marriage who generally would be considered a family relation.  This would include Immediate Family members as well as children, siblings (half or full), first cousins, aunts and uncles, in-laws of spouses or children, nieces and nephews, and grandchildren and grandparents. 

1. Employment of Relatives. To avoid the appearance of nepotism, applicants for staff positions will be requested to disclose any family relationship with a current William & Mary employee. Human Resources will review the disclosure and take appropriate steps to ensure that the university employee has no involvement in the hiring process.  If it is not practicable to avoid all involvement or if there is an appearance of nepotism (for example if the current university employee is within the same unit or if the current university employee is an executive), Human Resources will bring the matter to the Conflict of Interest Committee for assistance in review and management.  

If an Immediate Family member is a finalist for the position, University Counsel must review the situation to determine whether Board of Visitors approval or other management steps are required.[13]

2. Other Conflicts Arising from Family Relationships. Family relationships between two employees or between an employee and a student may create a conflict of interests if the employee is in a position of authority with respect to the other employee or student, or if the employee has authority over a particular transaction or process involving the other employee or the student.  For example, an investigator would have a conflict of interest conducting an investigation of his wife, and a department head would have a conflict of interest reviewing a performance evaluation regarding his son.  

The employee in the position of authority who has a conflicting interest of this nature (or who anticipates such a conflicting interest arising), must disclose the situation to his or her supervisor.  The supervisor, in consultation with Human Resources or other appropriate office(s), is responsible for ensuring that appropriate steps are taken to manage the conflict.  For example, the supervisor  may assign a co-worker to conduct the particular transaction.  The Conflict of Interest Committee may also provide advice and assist in reviewing conflict management plans. 

See also Section F.

F. Consensual Amorous Relationships

Employees may not give unfair, special treatment to another employee or to a student. Romantic or sexual relationships may create a conflict of interest or the appearance of such a conflict. 

1. Prohibited Relationships. The university prohibits sexual or romantic relationships between

  • faculty and undergraduate students,
  • faculty and certain graduate students,
  • employees (faculty or staff) and those employees that they supervise. 

For more information including the process for reporting prohibited relationships and for requesting an exemption, see the Policy on Consensual Amorous Relationships (Faculty Handbook).

2.  Relationships Requiring Management Steps.   Sexual or romantic relationships between an employee and second employee may create a conflict of interests if the second employee is in a position of authority with respect to the first employee or a particular transaction or process involving the first employee.  For example,

  • an auditor would have a conflict of interest auditing his spouse or the office in which his spouse works.
  • an HR administrator would have a conflict of interest reviewing the compensation of an IT employee whom she is dating.
  • an Accounts Payable technician would have a conflict of interest reviewing a reimbursement request made by her sister, who works in Facilities Management.
The employee in the position of authority, who has a conflicting interest of this nature or who anticipates such a conflicting interest arising, should disclose the situation to his or her supervisor.  The supervisor will consult with the Conflict of Interest Committee.  A management plan will be developed as needed.
G. Hiring Students or Employees for Personal Services, and Other Contractual Relationships

Financial or contractual relationships between employees and students, or between employees and their supervisors, may also create a conflict of interest.  Examples of situations that could create a conflict of interest are:

  • An employee hiring a student interning in his or her office to serve as a caretaker for his children or other members of his family.
  • An employee doing yard work for his supervisor.
An employee who has a conflicting interest of this nature or who anticipates such a conflicting interest arising should disclose the situation to his or her supervisor.  The supervisor should consult with management to determine appropriate steps to manage the conflict.  The Conflict of Interest Committee may also be consulted.
H. Promotional Activities at Work

Solicitation in the workplace, during working hours, is not permitted, unless it is part of your university employment. This includes:

  • Collecting contributions or pledges or donations for any purpose or interest, other than those sanctioned by the university (CVC, fund raising for university programs)
  • Selling or promoting goods or services
  • Collecting signatures on petitions
  • Conducting membership drives.
See also Policy on Use of Campus Facilities.
I. Conflict of Commitment

This conflict arises when an employee’s external professional activity (whether paid or not) or external employment is so time or energy demanding that it would interfere with the employee’s ability to meet his or her responsibilities to the university.

1. Paid External Employment. External paid employment is defined as any outside activity (e.g., consulting, teaching, research which is beyond the normal scope of employment, training, or service) that is undertaken for compensation by faculty, executive, professional or other exempt employees with full-time appointments.

The first obligation of employees is to fulfill their duties to the university. External paid employment must not interfere with this obligation. In order to ensure than external paid employment does not dilute an employee’s capacity to fulfill university obligations or commitments, or create any conflicts of interest, all exempt staff must request prior written approval in order to engage in external paid employment.  Exempt employees are those staff who are paid on a salaried basis and are not subject to the minimum wage and overtime provisions of the Fair Labor Standards Act.  Professional employees are typically exempt employees.  For further information, see the Classification Policy

Exempt staff must receive final approval in writing by the Vice Provost for Research (See Appendix C). Prior to seeking this approval, unit supervisors, or departmental and higher administrators must certify that all terms and conditions for paid external activities have been met. See the Policy on External Paid Employment

2. Unpaid External Activities.  The university generally encourages professional affiliations and activities traditionally undertaken by university employees, such as service to professional associations, presentation of lectures or papers, participation in seminars and conferences, and membership on advisory boards of non-profit organizations, or that are associated with not-for-profit activities, provided they do not conflict or interfere with the timely and effective performance of the employee’s responsibilities to the university. Employees must seek approval to use significant university resources in support of these types of activities except as provided in Section B of this policy.  Employees should discuss significant external professional activities with their supervisors, to avoid overcommitment.

J. Conflicts Arising in Research Activities

1. The university’s Policy on Financial Conflict of Interest applies to any faculty or employee who is an investigator on organized research supported by the university, or externally funded research grant or contract involving William & Mary, and to any employee who propose to involve undergraduate or graduate students in his or her proposed outside employment. Under the policy, the faculty or staff member must review the policy and, in some situations, complete a disclosure form and receive advance approval for the activity. 

2. Additional approvals and oversight apply to those individuals involved in certain types of federal funded research. In 1995 the U.S. Public Health Service (PHS) including the National Institutes of Health (NIH) and the National Science Foundation (NSF) enacted Code of Federal Regulations 42 CFR 50 for promoting objectivity in research. The goals of these regulations are to manage, reduce or eliminate financial conflicts of interest when faculty, students and other university employees are involved in federally-funded research. To assist in accomplishing these goals, universities are required to develop policies to comply with this regulation and to inform Investigators of such policy and to require prior to submission of applications to PHS by Investigators that procedures required by the policy are completed.

For purposes of the university Financial Conflict of Interest Policy, research grants and research contracts are treated as one and the same, with the university as the entity administering the research and individual employees of the university responsible for the design of the design, conduct, and/or reporting of the research. Prior to submitting grant applications, investigators should contact the Office of Sponsored Program for assistance in complying with the university Policy on Financial Conflict of Interest and, if required, completing the Financial Conflict of Interest Procedure.

VI. Interpretation and Guidance; Conflict of Interest Committee; Enforcement
A. Interpretation and Guidance. 

Any individual having any question about whether a particular activity or transaction is permitted or prohibited, or whether a conflict of interests exists, should seek clarification from the Conflict of Interest Committee or one of the following offices:

  1. University Counsel (particularly on questions related to the State and Local Government Conflict of Interests Act),
  2. Sponsored Programs (particularly on federal grant rules),
  3. Procurement (for questions relating to potential purchases or contracts for goods or services).
B. Conflict of Interest Committee

The Conflict of Interest Committee serves to provide guidance and information, refer employees to appropriate campus or state resources such as the Virginia Conflict of Interest and Ethics Advisory Council, and review specific situations as described in Section V of this Policy.

C. Enforcement

Violations of this policy should be reported in accordance with the appropriate policy or procedure:[14]

  1. Violations by or complaints against faculty must be addressed in accordance with the Faculty Handbook, which has separate procedures for responding to allegations of research misconduct and other forms of misconduct.
  2. Violations by non-faculty employees or others may be reported under the Whistleblower Policy. If misconduct is substantiated, disciplinary action will be taken in accordance with applicable policies and procedures.[15]
  3. Other potentially applicable reporting/complaint mechanisms are listed on the Compliance website. 
VII. Approval and Amendment

This policy was approved by the President on June 22, 2018.    

VIII. Appendices; Related Policies, Procedures, and Guidance

Appendices:
Appendix A: Conflict of Interest Committee Request Form (pending)
Appendix B: Disclosure of Entity with a Personal or Immediate Family Interest (pending)
Appendix C: External Paid Employment Form

Other Related Policies and Resources:
Code of Ethics
Policy on External Paid Employment
Policy  on Consensual Amorous Relationships
Policy on Financial Conflict of Interest  and Financial Conflict of Interest Procedure (applicable to faculty and staff participating in certain federally-funded research projects).
Virginia Conflict of Interest and Ethics Advisory Council
Faculty Handbook
Whistleblower Policy
The Compliance & Equity Office web-based resource regarding conflicts of interest
Virginia Executive Order Number 2  (2014) (Updated as of February 13, 2015): Personnel Directive Prohibiting the Receipt of Certain Gifts; Establishment of Executive Branch Ethics Commission

 


[1] For example, a laptop computer provided to W&M for the use of a specific employee.

[2] The Conflict of Interests Act prohibits an employee from accepting or soliciting “money or other thing of value for services performed within the scope of his official duties.”  2.2-3103(1).

[3] This provision does not regulate the source of funds used by the university to pay an employee; employee salaries may appropriately be paid for using private funds, so long as the compensation is part of the employee’s university-approved salary (or other compensation) and paid through university payroll or other payment processes.  See Compensation Policy.

[4] Executive Order No. 2, as updated, Part III.  Gifts valuing less than $25 are prohibited if they would reasonably tend to or are designed to influence the employee in his or her job.

[5] 2.2-3103(5).

[6] 2.2-3103(6).

[7] 2.2-3103(2) and (3).

[8] 2.23103(8) and (9).

[9] Executive Order No. 2, as updated, Part III.

[10] 2.2-3106(B).

[11] 2.2-4371.

[12] 2.2-4370.

[13] Under Section 2.2-3106 of the Conflict of Interests Act, no employee of the university may have a Personal Interest in a contract with William & Mary other than his or her own contract of employment, except as permitted under the Act.  Because an employee is deemed to have a Personal Interest in his Immediate Family members’ contracts (and other financial interests), this means that there are restrictions on William & Mary hiring married couples or other Immediate Family members of current employees. The employment of Immediate Family members is permitted, provided that an employee (1) does not exercise any control over the employment or employment activities of the member of his or her Immediate Family and (2) is not in a position to influence those activities.  In the event the employee is in a position to influence the employment or employment activities, the approval of the Board of Visitors may be required and appropriate safeguards must be established to manage the conflict.

[14] See Executive Order No. 2, Part VI (Enforcement).

[15] For classified and operational staff, the Virginia Department of Human Resource Management (DHRM) Policy 2.60, Standards of Conduct, governs disciplinary action. For professional staff, disciplinary action will be taken in accordance with the Policy on Appointments and Termination of Professionals and Professional Faculty.  For executive employees, disciplinary action will be taken in accordance with the Employment Policy for Executives