Can a Tennessee school board member also work for the school board, contract with it, or work for a vendor of the board?

Plain-English summary

Representative Harry Brooks asked a three-part question about Tennessee school board members and conflicts of interest: can a board member also be employed by the same board; can a board member personally hold a service contract with the board; and can a board member work for a company that contracts with the board?

AG Robert E. Cooper, Jr. broke the answers apart:

1. Board employment is barred. Tenn. Code Ann. § 49-2-203(a)(1)(D) says no board member is eligible to also hold a paid position under the board. A new board member must resign any board employment before taking office.
2. Personal service contracts are barred (with one narrow "sole supplier" exception). Under Tenn. Code Ann. § 12-4-101(a)(1), a board member is "directly interested" in any contract with him personally or with a business he controls, and cannot supervise such a contract. The member should not vote on a pre-existing contract and the contract cannot be renewed.
3. Working for a vendor is allowed, with disclosure. Tenn. Code Ann. § 12-4-101(b) classifies the member's stake in such contracts as "indirect," which requires public disclosure but does not bar service.

The opinion added a fourth limit that went beyond the standard conflict statute: Tenn. Code Ann. § 2-10-124(a) makes it a Class A misdemeanor for any elected county or municipal official to receive compensation for "consulting services" relating to the same county or city the official serves. Because school board members are usually elected county or municipal officials (Tenn. Code Ann. § 49-2-201), they are caught by this statute. A school board member whose outside job involves advising or assisting people in dealing with the same county or city, especially around contracts or legislative/administrative action, would violate the consulting-fee ban.

Currency note

This opinion was issued in 2010. 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.

Common questions

Q: I'm an elected school board member and I'm also a teacher in the same district. What do I do?
A: As of 2010, you could not hold both at once. Tenn. Code Ann. § 49-2-203(a)(1)(D) made you ineligible to remain in any "salary or compensation" position with the board after becoming a board member. The required step was to resign the employment before assuming board duties.

Q: What is "directly interested"?
A: Per Tenn. Code Ann. § 12-4-101(a)(1), a contract with you personally or with a business in which you are the sole proprietor, a partner, or have the controlling interest. "Controlling interest" includes ownership or control of the largest single block of outstanding shares. If you check those boxes, the member-board contract is direct, and the member cannot supervise it.

Q: What's the "sole supplier" exception?
A: A narrow carve-out in § 12-4-101(b). If the member is the only supplier of the goods or services in the city or county, the contract is treated as indirect (subject to disclosure) rather than direct (forbidden). This is rare; most goods and services have multiple available providers.

Q: I just work as a salaried employee for a company that has a contract with the board. Am I disqualified?
A: No. The opinion classifies that as "indirect interest." You can serve on the board, but you must publicly acknowledge the indirect interest in any board contract with your employer. You're not required to recuse from voting, but disclosure is mandatory. (Watch the consulting-fee statute, however; see below.)

Q: What's the consulting-fee statute?
A: Tenn. Code Ann. § 2-10-124(a). It bars elected county or municipal officials (and members-elect) from knowingly receiving "compensation for consulting services" from anyone other than the city or county they represent. Consulting services include advising or assisting in (a) influencing legislative or administrative action relative to that municipality or county, or (b) maintaining, applying for, soliciting, or entering into a contract with that municipality or county. Violation is a Class A misdemeanor.

Q: Who counts as an "elected county or municipal official"?
A: Members of city or county legislative bodies, members-elect, and "other elected county or municipal official." School board members elected at large in a county or city fit comfortably in the third category. The statute does not define "other elected county or municipal official" further; the AG read it broadly to include school board members.

Q: Is the "practice of law" excluded?
A: Yes. The statute excludes representation of clients by a licensed attorney in contested cases, administrative proceedings, or rule-making procedures. So an attorney board member can still represent clients in those forums, even if those clients deal with the same county.

Q: When must a board member recuse?
A: From any vote on a contract in which they are directly interested but which existed before they joined the board (the contract cannot be renewed at all). For indirect interests, no recusal required, but disclosure is.

Background and statutory framework

Tennessee uses a two-tier conflict-of-interest framework for elected officials. Tenn. Code Ann. § 12-4-101 is the base layer: it bars direct interests in contracts officials supervise, and requires disclosure of indirect interests. The framework is statewide, applying to municipal corporations, counties, the state, development districts, utility districts, human resource agencies, and other political subdivisions, and the term "interest" means a pecuniary interest (Op. Tenn. Att'y Gen. 09-175 (Nov. 6, 2009)).

The school board context layers on Tenn. Code Ann. § 49-2-203(a)(1)(D), which barreled past the financial test and made any paid board employment categorically incompatible with board service. Three earlier opinions (Op. U90-124 (Aug. 29, 1990); Op. 87-136 (Aug. 6, 1987); Op. 08-180 (Dec. 1, 2008)) had walked through the resignation requirement.

The third statutory thread, § 2-10-124(a), is younger and more aggressive: it makes consulting-fee receipt by elected local officials a criminal offense. The "consulting services" definition in § 2-10-122(2) is broad enough to capture much of what board members might be paid to do on the side, advising clients on dealing with the same local government, or trying to influence legislative or administrative action affecting that local government. Because the statute targets compensation specifically, ordinary employment that does not involve advising/assisting on county or city dealings remains permissible.

The recusal rule (no vote on directly-interested pre-existing contracts; vote allowed on indirectly-interested contracts after disclosure) tracks the statute's own structure: "directly interested" contracts cannot be supervised, full stop, while indirectly-interested contracts merely require acknowledgement.

Citations and references

Statutes (as of 2010):

• Tenn. Code Ann. § 49-2-203
• Tenn. Code Ann. § 49-2-201 (school board election)
• Tenn. Code Ann. § 12-4-101 (general conflict of interest)
• Tenn. Code Ann. § 2-10-122 (consulting definitions)
• Tenn. Code Ann. § 2-10-124 (consulting compensation prohibition)
• Tenn. Code Ann. § 3-6-301 (lobbying definitions)

Prior opinions referenced:

• Op. Tenn. Att'y Gen. U90-124 (Aug. 29, 1990)
• Op. Tenn. Att'y Gen. 87-136 (Aug. 6, 1987)
• Op. Tenn. Att'y Gen. 08-180 (Dec. 1, 2008)
• Op. Tenn. Att'y Gen. 99-209 (Oct. 20, 1999)
• Op. Tenn. Att'y Gen. U93-86 (Aug. 9, 1993)
• Op. Tenn. Att'y Gen. 09-175 (Nov. 6, 2009)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2010/op10-046.pdf

Original opinion text

April 12, 2010

Opinion No. 10-46

School Board Member Conflicts of Interest

QUESTIONS

1. May a citizen serve on a school board if:
   a. the citizen is employed by the school board;
   b. the citizen has a service contract with the school board; or
   c. the citizen is employed by a business that has a service contract with the school board.

2. If the answer to Question 1 is yes, at what point is there a conflict of interest in which the citizen school board member must recuse himself from voting?

OPINIONS

1.a. Under Tenn. Code Ann. § 49-2-203(a)(1)(D), a school board member may not continue as an employee of the board after becoming a board member.

b. Under Tenn. Code Ann. § 12-4-101(a), assuming the school board member is not a "sole supplier" of the services within the city or county, the member may not supervise a contract in which he or she is directly interested. An individual would be directly interested in a contract between the school board and that individual. The member should refrain from voting or otherwise acting on a pre-existing contract between that member and the board, and the contract should not be renewed.

c. Under Tenn. Code Ann. § 12-4-101(a), assuming the school board member is not a "sole supplier" of the services within the city or county, a school board member would be directly interested in a contract between the school board member and a business in which the member has a controlling interest. "Controlling interest" includes the individual with the ownership or control of the largest number of outstanding shares owned by any single individual or corporation. If the member owns such an interest in the business, then the member should refrain from voting or otherwise acting on a pre-existing contract between that business and the board, and the contract should not be renewed. Where an individual merely works for a business that contracts with the school board, that individual may be indirectly interested in the contract. The individual is not forbidden from being a school board member, but must disclose the indirect interest.

In addition, Tennessee law prohibits "any member of a municipal or county legislative body, member-elect of a municipal or county legislative body, or other elected county or municipal official" from knowingly receiving compensation for consulting services from any entity other than the city or county that the official represents. Tenn. Code Ann. § 2-10-124(a). School board members are generally elected. Tenn. Code Ann. § 49-2-201. If the school board involved in this question is a county or city school board, then it appears that all the members of that board would be subject to this statute. The term "consulting services" includes, among other activities, "services to advise or assist a person or entity in maintaining, applying for, soliciting or entering into a contract with the municipality or county represented by that official." Tenn. Code Ann. § 2-10-122(2). A school board member who works for a company that does business with the school board would violate this statute if his or her employment duties include "consulting services" as defined in Tenn. Code Ann. § 2-10-122(2) relative to the particular county or city the school board member represents.

2. A member should recuse himself or herself from voting on any contract in which the member is directly interested but which existed before he or she became a member. A member is not required to recuse himself or herself from voting on any contract in which the member is indirectly interested, but must disclose the interest.

ANALYSIS

1.a. School Board Member as School Board Employee

This opinion addresses under what circumstances a citizen may be prevented from serving on a school board because of a conflict of interest. The request does not specify the particular school board in question. This opinion, therefore, will not address private acts or local option acts.

The first question is whether a citizen who is employed by a school board may serve as a member of that board. Tenn. Code Ann. § 49-2-203(a)(1)(D) provides:

No member of any local board of education shall be eligible for election as a teacher or any other position under the board carrying with it any salary or compensation.

This Office has concluded that, under this statute, a school board member may not continue as an employee of the board after becoming a board member. Op. Tenn. Att'y Gen. U90-124 (August 29, 1990). The member must resign as an employee prior to assuming his or her responsibilities as a board member. Op. Tenn. Att'y Gen. 08-180 (December 1, 2008); Op. Tenn. Att'y Gen. 87-136 (August 6, 1987).

b. School Board Member Contracting Personally with School Board

The next question is whether a citizen who has a service contract with a school board may serve as a member of that board. Tenn. Code Ann. § 12-4-101(a)(1), the general conflict of interest statute, provides in relevant part:

It is unlawful for any officer, committee member, director, or other person whose duty it is to vote for, let out, overlook, or in any manner to superintend any work or any contract in which any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute shall or may be interested, to be directly interested in any such contract. "Directly interested" means any contract with the official personally or with any business in which the official is the sole proprietor, a partner, or the person having the controlling interest. "Controlling interest" includes the individual with the ownership or control of the largest number of outstanding shares owned by any single individual or corporation. The provisions of this subdivision (a)(1) shall not be construed to prohibit any officer, committeeperson, director, or any person, other than a member of a local governing body of a county or municipality, from voting on the budget, appropriation resolution, or tax rate resolution, or amendments thereto, unless the vote is on a specific amendment to the budget or a specific appropriation or resolution in which such person is directly interested.

(Emphasis added).

This Office has indicated in the past that the interest referred to in Tenn. Code Ann. § 12-4-101 is a pecuniary interest. Op. Tenn. Att'y Gen. 09-175 (November 6, 2009). Under (a)(1) of this statute, a school board member may not supervise a contract in which he or she is directly interested. The only exception is where the member is the sole supplier of goods or services in a municipality or county. Tenn. Code Ann. § 12-4-101(b). In that case, the individual is indirectly interested in the contract and must disclose his or her interest as discussed below. Assuming the member is not the sole supplier of goods or services in the city or county, a school board member would be directly interested in a contract between the school board and that individual. The member should refrain from voting or otherwise acting on a pre-existing contract between that member and the board, and the contract should not be renewed. Op. Tenn. Att'y Gen. 99-209 (October 20, 1999).

c. Contract between School Board and Business where the School Board Member is Employed

The next question is whether an individual who is employed by a business that contracts with the school board may be a school board member. Under Tenn. Code Ann. § 12-4-101(a), assuming the school board member is not a "sole supplier" of the services within the city or county, a school board member would be directly interested in a contract between the school board and a business in which the member has a controlling interest. "Controlling interest" includes the individual with the ownership or control of the largest number of outstanding shares owned by any single individual or corporation. If the member owns such an interest in the business, then the member should refrain from voting or otherwise acting on a pre-existing contract between that business and the board, and the contract should not be renewed.

Where an individual merely works for a business that contracts with the school board, that individual may be indirectly interested in the contract. Tenn. Code Ann. § 12-4-101(b) provides:

It is unlawful for any officer, committee member, director, or other person whose duty it is to vote for, let out, overlook, or in any manner to superintend any work or any contract in which any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute shall or may be interested, to be indirectly interested in any such contract unless the officer publicly acknowledges such officer's interest. "Indirectly interested" means any contract in which the officer is interested but not directly so, but includes contracts where the officer is directly interested but is the sole supplier of goods or services in a municipality or county.

The member would have an indirect interest in contracts between the employing company and the school board if the member, as an employee, receives any benefit from the contracts. Op. Tenn. Att'y Gen. U93-86 (August 9, 1993). The individual is not forbidden from being a school board member, but must disclose the indirect interest.

In addition, Tennessee law prohibits "any member of a municipal or county legislative body, member-elect of a municipal or county legislative body, or other elected county or municipal official" from knowingly receiving compensation for consulting services from any entity other than the city or county that the official represents. Tenn. Code Ann. § 2-10-124(a) (emphasis added). The statute does not further define the term "other elected county or municipal official." School board members are generally elected. Tenn. Code Ann. § 49-2-201. If the school board involved in this question is a county or city school board, then it appears that all the members of that board would be subject to this statute. Violation of this statute is a Class A misdemeanor. Tenn. Code Ann. § 2-10-124(c)(2). The term "consulting services" is defined as follows:

"Consulting services" with respect to an elected municipal or county official, including a member-elect of a municipal or county legislative body, means services to advise or assist a person or entity in influencing legislative or administrative action, as that term is defined in § 3-6-301, relative to the municipality or county represented by that official. "Consulting services" with respect to an elected municipal or county official, including a member-elect of a municipal or county legislative body, also means services to advise or assist a person or entity in maintaining, applying for, soliciting or entering into a contract with the municipality or county represented by that official. "Consulting services" does not mean the practice or business of law in connection with representation of clients by a licensed attorney in a contested case action, administrative proceeding or rule making procedure.

Tenn. Code Ann. § 2-10-122(2) (emphasis added). Tenn. Code Ann. § 3-6-301 provides in relevant part:

(13) "Influencing legislative or administrative action" means promoting, supporting, influencing, modifying, opposing or delaying any legislative or administrative action by any means, including, but not limited to, the provision or use of information, statistics, studies, or analyses, but not including the furnishing of information, statistics, studies, or analyses requested by an official of the legislative or executive branch to that official or the giving of testimony by an individual testifying at an official hearing conducted by officials of the legislative or executive branch.

A school board member who works for a company that does business with the school board would violate this statute if his or her employment duties include "consulting services" as defined in Tenn. Code Ann. § 2-10-122(2). The member would also violate the statute if he or she receives compensation for consulting services from any other source besides the county or city represented.

2. Recusal

The next question is, assuming that an individual with any of the above contractual interests may serve as a member of the school board, whether he or she must recuse himself or herself from voting on matters before the board. A member should recuse himself or herself from voting on any contract in which the member is directly interested but which existed before he or she became a member. A member is not required to recuse himself or herself from voting on any contract in which the member is indirectly interested, but must disclose the interest.

ROBERT E. COOPER, JR.
Attorney General and Reporter

MICHAEL E. MOORE
Solicitor General

ANN LOUISE VIX
Senior Counsel

Requested by:
Honorable Harry Brooks
State Representative
212 War Memorial Building
Nashville, TN 37243-0119