Related Links

Agenda Item # 22

BOARD MEMORANDUM

RECOMMENDATION:

Adopt a resolution to amend Section 2-76 of the VTA Administrative Code pertaining to post employment restrictions to permit former employees to work for VTA consultants and contractors under certain conditions.

BACKGROUND AND DISCUSSION:

The VTA Code of Ethics (Sections 2-66 through 2-76 of the Administrative Code) currently prohibits former employees who accept employment with a VTA contractor, vendor, or consultant ("contractor") from participating in any VTA project undertaken by the new employer for a period of two years following termination of their employment with VTA. There is no restriction on hiring a former employee as an independent contractor.

The prohibition on employment by consultants and contractors is a fairly standard provision in public employment, and is designed to prevent conflict of interest and to prevent an unfair competitive advantage to companies hiring former VTA employees. However, the prohibition on employment includes situations where former employees may be employed in a capacity that bears no relationship to their previous VTA work, or where former employees did not hold positions of substantial responsibility or unique skill and where therefore the contractor could not gain an unfair competitive advantage by hiring them. This situation has come to light recently in the wake of the numerous layoffs triggered by VTAs financial difficulties. A former VTA employee sought other employment when it became clear that he would be laid-off from his current job and it was unlikely that he would have any ability to "bump" to another position. He found a new position with a VTA contractor in an unrelated field. However, the contractor put him to work and started training him on a VTA project in San Jose. Under the current policy, this former employee is not permitted to work on a VTA project. Therefore, the contractor has transferred the employee to another worksite outside Santa Clara County.

Primarily in an effort to not unfairly penalize laid-off employees, or those whose employment may be in jeopardy due to economic conditions, and to retain employment within Santa Clara County, it is recommended that the existing VTA post employment restrictions for employees be narrowed.

Specifically, it is recommended that the Administrative Code be amended to allow former VTA employees to work for contractors within the two year prohibition window provided the employee does not hold a key position on a VTA project, has not previously participated in any way with developing or managing the contract, and has not held a position of substantial responsibility in the area of service to be performed under the contract. The suggested amendment is attached.

ALTERNATIVES:

At the Committee meeting on July 17^th, the members voted to recommend the amendment to the full board with the following changes: the exceptions stated in subsection b. of section 2-76 should be modified to clarify that VTA (rather than the former employee of prospective contractor-employer) will make the required determinations, and that only holding a position of substantial responsibility (as determined by VTA) will disqualify a former employee from employment with a contractor

FISCAL IMPACT:

None.

Resolution No. ________________ 

AMENDMENTS TO ADMINISTRATIVE CODE

BE IT RESOLVED by the Board of Directors of the Santa Clara Valley Transportation Authority that the Amendments to Section 2-76 of the Santa Clara Valley Transportation Authority Administrative Code pertaining to post employment restrictions and designated Attachment A hereto are hereby adopted.

PASSED AND ADOPTED by the Santa Clara Valley Transportation Authority Board of Directors on August 7, 2003, by the following vote:

AYES: DIRECTORS

NOES: DIRECTORS

ABSENT: DIRECTORS

                                                     ______________________________________

                                                     JANE P. KENNEDY, Chairperson

                                                     Board of Directors

ATTEST:

______________________________

SANDRA WEYMOUTH, Secretary

Board of Directors

APPROVED AS TO FORM:

___________________________________

SUZANNE B. GIFFORD, General Counsel

Sec. 2-76.  Post employment restrictions.

            a.            Post employment restriction for Board Members/Alternates.

            VTA shall not employ or retain under contract for compensation any individual who has served as a Board member/alternate within the previous two years.  No Board member/alternate who leaves his or her office and accepts a position of employment with a current or future VTA contractor/consultant may participate in a project or provide any goods or services to VTA, through the consultant/contractor, for a period of two years.

            b.            Post employment restrictions for employees.

            No employee who leaves his or her VTA position and accepts a position of employment with a current or future VTA contractor (consultant, vendor, developer) may participate in a project or provide any goods or services to VTA through the contractor, for a period of two years, except where VTA determines that the employee (1) does not hold a key position on the project, (2) has not previously participated in any meaningful way in developing or managing the contract, (3) and has not held a position of substantial responsibility in the area of service to be performed under the contract.

The General Manager may, when it is in the overall best interests of VTA, make exceptions in the case of employees who leave due to retirement.

(Added  Ord. No. 95-5 § 14, 12/7/95.)

Click here to return to the Board Agenda Index