Can a sitting member of the Arkansas Motor Vehicle Commission also be hired as the Commission's Executive Director?

Plain-English summary

Joy Blankenship, then-Chairperson of the Arkansas Motor Vehicle Commission, asked four questions about whether a current or former MVC chairman could be hired as the Commission's Executive Director. The AG separated the questions into "current member" and "former member" tracks.

Current member. The common-law doctrine of incompatibility blocks a sitting MVC member, including the Chairman, from serving simultaneously as the Commission's Executive Director. The MVC appoints the Executive Director, sets that person's salary, and prescribes the duties (Ark. Code Ann. § 23-112-203(a)(1)). A commissioner who is also the Director would be supervising himself; he would be on both sides of his own employment relationship. That is the textbook scenario the doctrine forbids. The dealer status is irrelevant: even a non-dealer commissioner cannot also be Director.

If a current commissioner did accept the Director job, the law would treat his acceptance as automatic resignation from the commissionership. Under Arkansas case law, an officeholder who takes an incompatible second position vacates the first.

Former member. A former commissioner who is also a licensed dealer can be hired as Executive Director. The dealer status, by itself, does not disqualify. The MVC's enabling act actually requires four of the nine commissioners to be licensees or qualified to be licensees (§ 23-112-201(b)(2)(A)), so dealer-affiliated members are part of the design.

Hiring participation while a candidate. A commissioner under consideration for the Director job must recuse from the hiring decision. The common-law rule against personal interests conflicting with public duty (and Ark. Code Ann. § 21-8-304) require it. The commissioner's interest in being chosen would compromise his duty to pick the best available candidate.

Honoring contingent offers. The AG declined to answer this question, noting that AG opinions are limited to questions of state-law interpretation and do not reach contractual or employment-decision questions.

Currency note

This opinion was issued in 2017. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The Arkansas Motor Vehicle Commission regulates motor vehicle dealers, manufacturers, distributors, and related parties. It consists of nine members appointed by the Governor for seven-year terms with Senate confirmation (§ 23-112-201(a)). Four members must be (or be qualified as) licensees under the Act (§ 23-112-201(b)(2)(A)). The Commission selects its Chairman by majority vote (§ 23-112-201(e)).

Section 23-112-203(a)(1) gives the MVC the power to hire its Executive Director:

The Arkansas Motor Vehicle Commission shall appoint a qualified person to serve as executive director thereof, to serve at the pleasure of the commission, and shall fix his or her salary and shall define and prescribe the duties.

That single sentence creates the structural mismatch the AG identified. The MVC is the Director's employer; the Director serves at the MVC's pleasure. A commissioner sitting in both seats would be voting on his own salary, his own performance, and his own continued employment.

The AG's reasoning

The incompatibility test. The AG quoted Tappan v. Helena Fed. Saving & Loan Assn., 193 Ark. 1023 (1937): incompatibility exists when "one is subordinate to the other, and subject in some degree to the supervisory power of its incumbent, or where the incumbent of one office has the power to remove the incumbent of the other or to audit the accounts of the other." Thompson v. Roberts, 333 Ark. 544 (1998), expanded that test:

Incompatibility arises ... from the nature of the duties of the offices, when there is an inconsistency in the functions of the two, where the functions of the two are inherently inconsistent or repugnant, as where the antagonism would result in the attempt by one person to discharge the duties of both offices, or where the nature and duties of the two offices are such as to render it improper from considerations of public policy for one person to retain both.

The MVC commissioner / Executive Director combination fails on every prong. The Director is subordinate to the MVC; the MVC has the power to remove the Director and set the Director's compensation. Thompson itself extended the doctrine beyond office-and-office to the holding of an office plus a public employment. So even though "Executive Director" is staff rather than an office in the constitutional sense, the doctrine still applies.

The forfeiture consequence. Citing Byrd v. State, 240 Ark. 743 (1966), the AG noted that when offices are incompatible, "the officeholder retains the last office accepted." A commissioner who became Director would automatically lose the commissionership.

Hiring while a candidate. Drawing from 67 C.J.S. Officers § 347 and Van Hovenberg v. Holman, 201 Ark. 370 (1940), the AG laid out the recusal rule: "Officers are not permitted to place themselves in a position in which personal interest may come into conflict with the duty which they owe to the public.... When conflicts of interest arise between an officeholder's private interests and public duties, it is proper that the officeholder recuse himself from the matter in which the conflict arises." Section 21-8-304 separately bars public officials from using their position "to secure special privileges or exemptions" for themselves.

The AG flagged but did not resolve a related question: whether a sitting commissioner is even eligible to be appointed Director, given that some jurisdictions have a common-law rule against a body appointing one of its own members to a position over which the body has appointment power. Arkansas has no controlling decision.

Why former dealer members are different. A former commissioner is no longer in the supervisor/supervised relationship with himself. The Act's eligibility provision actually contemplates dealer involvement at the commissioner level, so dealer status alone cannot be a disqualifier for the staff role.

Common questions

What does "incompatibility" mean in plain English?
Two roles are incompatible when one person doing both creates a structural conflict that no recusal can fix. The classic example: a person cannot simultaneously be the auditor and the audited, or the supervisor and the employee.

Could the MVC just have the commissioner step aside from his own salary vote?
No. The doctrine is not about whether you can recuse from individual decisions. It is about the structural impossibility of one person sitting on both sides of the entire relationship. Recusal would not repair that.

If a commissioner accepted the Director job, would he need to formally resign first?
Practically yes, and the law treats acceptance of the second job as forfeiture of the first regardless. The cleaner path is to resign the commissionership and then be hired.

Can a current commissioner apply, sit out the hiring vote, and just wait?
The opinion did not foreclose that arrangement, though it flagged the unresolved common-law question of whether a body can hire one of its own at all. The candidate-commissioner would have to recuse from every hiring discussion and decision while remaining a candidate.

Why didn't the AG answer the contingent-offer question?
Section 25-16-706 limits AG opinions to "questions of state-law interpretation." Whether a particular employment offer must be honored when contingencies are unmet is a contract question, not a statutory-interpretation question.

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2017-069
September 22, 2017

Joy Blankenship, Chairperson
Arkansas Motor Vehicle Commission
101 East Capitol, Suite 204
Little Rock, AR 72201-3826

Dear Ms. Blankenship:

You have asked, on behalf of the Arkansas Motor Vehicle Commission ("MVC" or "Commission"), for my opinion on the following questions:

1) Does a conflict of interest or the violation of any laws, regulations, ethics, or state policies exist in hiring a present or former MVC Chairman as the (salaried) Executive Director of the Commission, if the Chairman is also a licensed dealer who is regulated by the Commission?

2) Does functioning as the Chairman of the MVC while under consideration for the Executive Director's position constitute "undue influence" of the Commission in making a hiring decision?

3) Can the individual still serve as the Chair of the MVC while being considered for this or any other executive position?

4) Is the MVC required to honor an offer of contingent employment if all contingencies are not met by the applicant?

RESPONSE

In response to your first question, the common law doctrine of incompatibility prohibits altogether the dual service of a current member of the MVC as the MVC's Executive Director, regardless of whether the member is the Chairman and regardless of whether he is a licensed dealer. As for a former MVC member, the fact that the former member is a licensed dealer will not, in my opinion, prevent such individual from being hired as Executive Director. In response to your second and third questions, neither the Chairman nor any other member of the MVC may be involved in hiring the Executive Director while also being considered for that position. I cannot opine on your fourth question. Official opinions of this office are limited to questions of state-law interpretation.

DISCUSSION

Question 1: Does a conflict of interest or the violation of any laws, regulations, ethics, or state policies exist in hiring a present or former MVC Chairman as the (salaried) Executive Director of the Commission, if the Chairman is also a licensed dealer who is regulated by the Commission?

In my opinion, the common law "doctrine of incompatibility" prohibits altogether the dual service of a current member of the MVC as the MVC's Executive Director, regardless of whether the member is the Chairman and regardless of whether he is a licensed dealer. The Arkansas Supreme Court has declared that "'[t]he inconsistency, which at common law makes offices incompatible'" exists in situations when "'one is subordinate to the other, and subject in some degree to the supervisory power of its incumbent, or where the incumbent of one office has the power to remove the incumbent of the other or to audit the accounts of the other.'" The Court has elaborated on, and somewhat extended, this relatively straightforward standard as follows:

Incompatibility arises ... from the nature of the duties of the offices, when there is an inconsistency in the functions of the two, where the functions of the two are inherently inconsistent or repugnant, as where the antagonism would result in the attempt by one person to discharge the duties of both offices, or where the nature and duties of the two offices are such as to render it improper from considerations of public policy for one person to retain both.

The positions of MVC member and MVC Executive Director are clearly incompatible. The Executive Director is appointed by and serves at the pleasure of the MVC, which also sets the director's salary and duties:

The Arkansas Motor Vehicle Commission shall appoint a qualified person to serve as executive director thereof, to serve at the pleasure of the commission, and shall fix his or her salary and shall define and prescribe the duties.

I believe it is clear, therefore, that the common law doctrine of incompatibility prohibits any current member of the MVC from serving as Executive Director of the Commission. This conclusion applies, in my opinion, regardless of whether the member is the Chairman and regardless of whether the member is a licensed dealer. The common law prohibits the dual service altogether.

Ordinarily, acceptance of another, incompatible position vacates the former. Thus, a member of the MVC would forfeit his Commission membership upon accepting an appointment as Executive Director.

In response to your question concerning the hiring of a former MVC Chairman who is a licensed dealer, I see no prohibition in that regard. Indeed, the statute governing the composition of the MVC requires that four members of the Commission "shall be licensees or shall be qualified as licensees under the provisions of this chapter at the time of their appointment."

Question 2: Does functioning as the Chairman of the MVC while under consideration for the Executive Director's position constitute "undue influence" of the Commission in making a hiring decision?

Although no Arkansas statute refers to "undue influence," I believe it is clear that the common law on conflicts of interest prohibits the MVC Chairman (or any other member of the Commission) from participating in any way in the process of deciding whom to appoint as Executive Director while the Chair or other member is under consideration for that position. The common law in this regard, stated generally, is that:

Officers are not permitted to place themselves in a position in which personal interest may come into conflict with the duty which they owe to the public.... When conflicts of interest arise between an officeholder's private interests and public duties, it is proper that the officeholder recuse himself from the matter in which the conflict arises.

Additionally, according to Arkansas statute, a public official may not "use his position to secure special privileges or exemptions for himself, his spouse, child, parents, or other persons standing in the first degree of relationship, or for those with whom he has a substantial financial relationship that is not available to others except as may be otherwise provided by law." The Arkansas Ethics Commission may issue advisory opinions on this statute.

Here, in my opinion, it is apparent that the personal, private interest of any MVC member who is under consideration for the Executive Director's position will conflict with that member's public duty to ensure that the best available candidate occupies the position. The member's own interest in being appointed Executive Director may cloud his judgment about which available candidate's appointment would best serve the public interest. I believe he would therefore be required to recuse from selecting and appointing an Executive Director.

Question 3: Can the individual still serve as the Chair of the MVC while being considered for this or any other executive position?

As stated above, the Chairman would plainly be required to recuse from selecting and appointing an Executive Director while being considered for the Executive Director position. He therefore could not "serve" as Chairman, if by that you mean function in that position while under consideration for the Executive Director position. As to whether he can be considered for that position while serving as Chairman but not participating in the appointment process, please see footnote 7, supra.

Question 4: Is the MVC required to honor an offer of contingent employment if all contingencies are not met by the applicant?

This question is not within the scope of my review in the context of providing an Attorney General opinion. Attorney General opinions are limited to questions of state law interpretation. They do not extend to providing advice or counsel regarding particular employment decisions or any other decisions involving the terms of particular agreements.

LESLIE RUTLEDGE
Attorney General