Policy 3.325 Office of General Counsel
Conflict of Interest, Conflict of Commitment, and Outside Employment and Activities
Date Adopted/Most Recent Revision
05/12/2017
Next Scheduled Review: 05-2019

  1. Policy Statement
    It is the policy of Midwestern State University ("MSU" or "University") to provide a system of disclosure, approval, and documentation of its employees' employment and activities outside of the University which might otherwise raise concerns about conflicts of interest or conflicts of commitment. This policy serves to ensure compliance with state ethics laws and University policies and is intended to provide the framework for policies and procedures to clearly delineate permissible outside employment and activities, including board service.
  2. Reason for Policy
    The University recognizes the common practice of faculty and staff holding more than one employment or position due to needs, interests, or development. Employment and/or participation in activities outside the University is permitted as long as it does not interfere with the employee's University duties and responsibilities and create a conflict of interest or conflict of commitment. This policy provides the institutional framework ensuring that the primary responsibility to protect the credibility and reputation of the University and its faculty and staff when those employees are engaged in outside employment and activities.
  3. Application of Policy
    This policy applies to all University employees.
  4. Definitions

    Business Entity - any entity recognized by law through which business for profit is conducted, including a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, or trust.

    Compensation - any form of benefit including but not limited to salary, retainer, honoraria, intellectual property rights or royalties, or promised, deferred, or contingent interest.

    Conflict of Interest - a significant outside interest of a MSU employee or one of the employee's immediate family members that could directly or significantly affect the employee's performance of their University responsibilities. The proper discharge of an employee's university responsibilities could be directly or significantly affected if the employment, service, activity or interest: (a) might tend to influence the way the employee performs his or her University responsibilities, or the employee knows or should know the interest is or has been offered with the intent to influence the employee's conduct or decisions; (b) could reasonably be expected to impair the employee's judgment in performing his or her University responsibilities; or (c) might require or induce the employee to disclose confidential or proprietary information acquired through the performance of University responsibilities.

    Conflict of Commitment - a state in which the time or effort that a MSU employee devotes to an outside activity directly or significantly interferes with the employee's fulfillment of their University responsibilities or when the employee uses state property without authority in connection with the employee's outside employment, board service, or other activity.

    Immediate Family Members - include a spouse; a dependent child, a stepchild or other dependent, for purposes of determining federal income tax liability during the period covered by the disclosure statement; and a related or non-related unmarried adult who resides in the same household as the individual and with whom the individual is financially interdependent as evidenced, for example, by the maintenance of a joint bank account, mortgage, or investments.

    Management Plan - a written agreement that may impose conditions and prescribe actions necessary, including reduction or elimination, to manage conflicts of interest, conflicts of commitment, or outside employment or activities.

    Nature and Extent - a description of the activity, the time commitment, and anticipated length of time the commitment is expected to continue.

    Outside Activity - any uncompensated activity, consulting, or service (e.g., board service) performed by the employee outside of the employee's employment relationship with MSU for the direct or indirect benefit of the employee or the organization served.

    Outside Board Service - service on a board, council, or other governing or advisory body of a business, civic, professional, social, or religious organization whether for profit or nonprofit.

    Outside Employment - any compensated employment, consulting, or service (e.g., board service) performed by the employee outside of the employee's employment relationship with MSU for the direct or indirect benefit of the employee or the organization served.

    Professional and Administrative Staff - employees who have been determined to be exempt from the Fair Labor Standards Act (FLSA) and are, therefore, not entitled to overtime pay. It also includes employees who are not exempt from the FLSA if they are authorized to execute contracts on behalf of the University or who because of their job duties at the University have authority to exercise discretion with regard to the award of contracts or other financial transactions. This definition includes staff assigned to professional and administrative positions and staff assigned to classified positions.

    Substantial Interest in a Business Entity - a controlling interest; ownership of more than 10 percent of the voting interest; ownership of more than $5,000 of the fair market value; a direct or indirect participating interest by shares, stock, or otherwise, regardless of whether voting rights are included, in more than 10 percent of the profits, proceeds, or capital gains; or service as an officer. It does not include investments in mutual funds or retirement accounts, so long as the individual does not directly control the investment decisions made in those vehicles.

  5. Procedures and Responsibilities
    1. Primary Responsibility
      The primary responsibility of University employees is the accomplishment of the duties and responsibilities assigned to one's position of appointment.
    2. Outside Employment and/or Activities
      1. University employees may engage in outside employment or activities, as long as the employment or activity does not violate state laws or MSU policies or procedures governing the conduct of employees, including ethics standards and provisions prohibiting conflicts of interest, conflicts of commitment, and use of state resources.
      2. Certain outside activity clearly enhances the mission of the University and/or provides important elements of faculty or staff development related to their University responsibilities (see for example, MSU Policy 3.120: Faculty Tenure and Promotion Policy). The following activities are examples of activities encouraged:
        • Serving on a federal, state, or local government agency committee, panel, or commission;
        • Acting in an editorial capacity for a professional journal;
        • Reviewing journal manuscripts, book manuscripts, or grant or contract proposals;
        • Attending and presenting talks at scholarly colloquia and conferences;
        • Developing scholarly communications in the form of books or journal articles, reviews, movies, television productions, and similar works, even when such activities result in financial gain, consistent with intellectual property and other applicable MSU policies and guidelines; and
        • Serving as a committee member, an officer, or board member of a professional or scholarly society.
        The nature and extent of all of the above activities are to be described as part of a faculty or staff member's periodic performance evaluation.
      3. Outside employment during those months in which a member of the faculty appointed on a 9-month, 11-month, or 12-month basis is not appointed is considered pre-approved, requiring no further approval, unless the outside employment reasonably appears to create a conflict of interest, in which case prior approval is required. Such activity is required to be disclosed in accord with section V.D.2, below.
    3. Conflicts of Interest and Conflicts of Commitment Prohibited
      University employees may not have a direct or indirect interest, including financial and other interests, or engage in a business transaction or professional activity, or incur any obligation of any nature that is in substantial conflict with the proper discharge of the employee's duties for the University.

      Activities on behalf of outside entities or individuals must not interfere with an employee's fulfillment of his or her duties and responsibilities to the University. Such conflicts of commitment may arise regardless of the location of these activities (on or off campus), the type of outside entity (individual, for-profit, not-for-profit, or government), or the level of compensation (compensated or non-compensated).
    4. Disclosure and Approval
      1. Approval Requirements
        1. Approval requirements shall apply to:
          1. all full-time employees; and
          2. part-time professional and administrative staff (but not part-time faculty) only if the activity reasonably appears to create a conflict of interest.
        2. Graduate student academic employees including, but not limited to, teaching assistants, instructional assistants and research assistants are not covered under section V.D of the policy.
        3. Except as noted at (d), below, approval is required prior to engaging in the following outside employment or activities that reasonably appear to create a conflict of interest or combine to total an average of twenty (20) hours or more per work week (for faculty the average is calculated per work week over the course of the semester):
          1. all outside employment or other compensated activities;
          2. all service on outside boards (see below, for details, including exclusions); and
          3. any uncompensated activity that reasonably appears to create a conflict of interest or conflict of commitment.
        4. Pre-Approved Activities. The following activities are “pre-approved,” such that approval need not be obtained prior to engagement in the activity. The following activities are examples of activities encouraged:
          1. Serving on a federal, state, or local government agency committee, panel, or commission;
          2. Acting in an editorial capacity for a professional journal;
          3. Reviewing journal manuscripts, book manuscripts, or grant or contract proposals;
          4. Attending and presenting talks at scholarly colloquia and conferences;
          5. Developing scholarly communications in the form of books or journal articles, reviews, movies, television productions, and similar works, even when such activities result in financial gain, consistent with intellectual property and other applicable MSU policies and guidelines; and
          6. Serving as a committee member, an officer, or board member of a professional or scholarly society.
          7. For faculty, the evaluation categories and criteria in section IV of MSU Policy 3.120: Faculty Tenure and Promotion, except that any compensated outside employment and/or activities in connection with such categories and criteria must be disclosed and approved in accordance with the provisions of section V.D of this policy (3.325).
          Because the University requires the disclosure of a description of the nature and extent of some or all such activities as part of a faculty or staff member's periodic performance evaluation, such activities, except for compensated outside employment and/or activities described in section V.D.1.d.vii, above, need not be disclosed in the form described in section V.D.2, below.
      2. Each full-time faculty, full-time professional and administrative staff, are required to disclose any applicable information listed in subsections (a) through (g) below, on an annual basis, or more frequently as may be required per section V.G below, on a form approved by the Office of the General Counsel and routed to the Human Resources Department and a copy provided to the employee and to the employee's department supervisor; full-time regular staff (not professional and administrative staff) must report such information only once, however, any changes should be resubmitted for review and approval:

        (Note: When in doubt in determining whether an activity or interest should be disclosed, the individual should resolve the doubt in favor of disclosure.)
        1. a description of the nature and extent of all outside employment or other compensated activity;
          (Note: Texas Government Code §667.007 requires a person to inform the person's employing state agency or institution of higher education before accepting additional employment with another agency or institution.)
        2. a description of the nature and extent of any outside activity, regardless of compensation, that reasonably appears to create a conflict of interest or a conflict of commitment;
        3. a description of the nature and extent of any outside (onsite or distance) teaching that is in, or related to, the same discipline as one's area of University teaching responsibilities;
        4. a description of the nature and extent of outside board service, regardless of compensation, (see section V.E.4, below, for details, including exclusions);
        5. a description of any substantial interest in a business entity that reasonably appears to create a conflict of interest, which should be provided no later than 30 days after acquiring the interest;
        6. a description of gifts over $250 to the individual or his or her immediate family members, but only if they reasonably appear to create a conflict of interest, which should be provided no later than 30 days after acquiring the gift. Do not include gifts received from: one's parent, child, sibling, grandparent, or grandchild; one's spouse or the spouse of anyone mentioned above; or the parent, child, sibling, grandparent, or grandchild of one's spouse; and
        7. a description of the nature and extent of any activity of immediate family members that reasonably appears to create a conflict of interest and a description of any substantial interest of immediate family members in a business entity (as defined above) that reasonably appears to create a conflict of interest, which should be provided no later than 30 days after acquiring the interest.
      3. Part-Time Employees
        In accordance with section V.D.2, above, part-time members of the professional and administrative staff are required to disclose the nature and extent of any outside employment and/or activity and any substantial interest in a business entity (as defined above) that reasonably appears to create a conflict of interest; such part-time employees are not required by this policy to disclose for family members; part-time members of the faculty must disclose only the information required by section V.D.2.a, above.
    5. Guidelines for Reviewing and Approving Requests to Engage in Outside Employment and/or Activities
      1. Approval Authorities
        The President appoints the following individuals as approval authorities under this policy:
        1. for members of the faculty: the department chair and the dean;
        2. for department chairs: the dean and the Provost;
        3. for deans: the Provost and the President;
        4. for executive officers: the President and the Chairperson of the Board of Regents' Audit, Compliance, and Management Review Committee;
        5. for the President: the Chairperson of the Board of Regents or his or her designee;
        6. for professional and administrative staff: their supervisor and the supervising vice president; and
        7. for other employees: their supervisor.
      2. Faculty Time
        Members of the faculty have flexibility in using their time to prepare for teaching and engage in research and other scholarly activity. Other responsibilities, such as presenting lectures, being available to meet with students, and participating in University committees, have more rigid time demands. During the academic term in which a faculty member holds a full-time appointment, the faculty member must attend to all their duties and responsibilities and meet the minimum academic workload requirements.
      3. Accounting for Outside Board Service
        1. Uncompensated Outside Board Service of Direct Benefit to MSU, Other Than Scholarly Boards Pre-Approved in section V.D.1.d, Above:
          MSU recognizes the benefit to be derived by the University from outside board service. The service:
          1. must be service on a nonreligious board;
          2. must be uncompensated (other than for reimbursement of usual and customary expenses);
          3. requires prior approval; and
          4. requires disclosure.
        2. Compensated Board Service or Service to a Religious Organization
          Service on an outside board for which the employee is compensated and any service to a religious organization whether or not compensated must be on the individual's own time.
          1. If the service occurs during normal office hours, the individual must use vacation time, compensatory time, or other appropriate leave or approved arrangements while providing the service;
          2. The service must be without cost to MSU.
          3. Service to a local religious congregation that is primarily personal does not require prior approval and does not need to be disclosed, regardless of compensation. Service on the board of a religious organization that provides services that the University provides, such as religious hospital or academic institution, requires prior approval and must be disclosed.
          4. Compensated service on a nonreligious board requires prior approval and must be disclosed, except as noted in the subsection immediately below.
        3. Board Service or Activity that is Personal
          Participation (regardless of compensation) on outside boards or activity in which the service is primarily personal rather than professional in nature and is done on one's own time is permitted without the requirement of approval or disclosure if it does not create a conflict of interest or conflict of commitment or the appearance of a conflict of interest or conflict of commitment. Examples include boards of the following nature - a municipality; local religious congregation; neighborhood association; public, private or parochial school; political organization; social advocacy organization; youth sports or recreation league; affinity group such as the local orchid society or model train collectors club; and other similar outside boards.
      4. Management Plans
        Management plans must be in place for all faculty and professional and administrative staff (but not part-time faculty) for outside employment and activities that may create a conflict of interest or conflict of commitment before activity begins. Management plans must be developed by the employee in conjunction with the employee's director, department chair or head, dean or vice president as appropriate and approved by the Office of the General Counsel.
    6. Appeals
      Employees whose request for approval of outside employment or activity is denied may request the denying authority reconsider and provide an explanation of the decision in writing. If the employee remains unsatisfied with the decision, he or she may proceed up one level of approval authority. And for faculty, a split decision by the department chair and the dean is automatically referred to the provost for resolution. If the employee is still unsatisfied he or she may access standard grievance procedures to the extent they are applicable.
    7. Appeals

      In rare instances, outside activities may be approved retrospectively when the employee is called upon in an emergency or urgent situation where it would be impossible or unreasonable to obtain advance approval. In such cases, the activity must be fully disclosed and approval sought from the appropriate authority as soon as reasonably possible.

      Some activity may also be prospectively approved, for up to one year, when an employee fully describes to the approving authority the general nature and extent of anticipated, but not confirmed, outside opportunities.

      In any event, whether previously approved or not, employees should ensure they notify their chair, dean, or supervisor in advance when they will be missing specific responsibilities.

    8. Confidential Outside Activity
      If an employee wishes to engage in an activity for which some or all of the relevant information is confidential, the approving authority may approve the activity without requiring full written disclosure if the approver is satisfied there is a compelling reason to treat the information confidentially and the activity is fully compliant with applicable laws and University policies.
    9. Rescinding Approvals
      An approving authority may rescind an approved outside employment and/or activity upon receipt of information indicating the activity is not consistent with this policy or any applicable law or University policy. The individual for whom the activity may be rescinded shall be given notice in writing and have an opportunity to respond.
    10. Noncompliance
      Noncompliance with this policy may subject one to discipline in accord with applicable University procedures, up to and including termination of employment.
    11. Use of University Property
      University property may only be used for state purposes appropriate to the University's mission. Use of University property for any outside employment and/or activity is prohibited except in cases where such use is clearly justified and must be explicitly approved in writing (e-mail acceptable) by the President through normal administrative channels.
    12. Education and Training
      1. Employees with responsibility for approving and managing outside employment and/activities and interests covered by this policy must take training offered by the University.
      2. The University will annually distribute this policy to all employees.
    13. Salary Supplement
      In compliance with State of Texas Government Code Section 659.0201, when the University accepts a gift, grant, donation, or other consideration from a person and the donor designates it to be used as a salary supplement for an employee of the University, the University will analyze the gift, grant, or donation for potential conflicts of interest. If a conflict of interest exists, the University will utilize its current processes and procedures to eliminate or manage the conflict.
  6. Related Statutes, Rules, Policies, Forms and Websites
    Related Statutes:
    • Texas Education Code, Chapter 51, Provisions Generally Applicable to Higher Education, Sec. 51.9337(b), as amended by Senate Bill 20.
    • Texas Government Code, Title 5, Subtitle B, chapter 572, Personal Financial Disclosure Standards of Conduct, and Conflict of Interest.
    • Texas Government Code, Title 10, Subtitle E, chapter 2203, Use of State Property.
    • Texas Government Code, title 10, Subtitle F, chapter 2261, State Contracting Standards and Oversight.
    Related Policies:
    3.134 Outside Employment of Faculty
    3.314 Ethics Policy for Employees
    3.346 Standards of Conduct for State Employees
    3.343 Dual Employment with the State
    3.120 Faculty Tenure and Promotion

    Related Forms:
    Disclosure/Request for Approval of Outside Employment or Activity (NEW)
  7. Responsible Office(s)
    Contact: Office of the General Counsel
    Phone: (940) 397-6225
    Email: barry.macha@mwsu.edu
  8. History
    Date Adopted: 05/12/2017