Relevant provisions of the Virginia Conflict of Interest Act
The Virginia State and Local Government Conflict of Interests Act, §2.2-3100, et seq. of the Code of Virginia, generally prohibits contracts between employees and their agencies; i.e., between faculty members and the university, where the employee has a personal interest in a contract. A “personal interest” of an employee, including his or her immediate family members, includes having more than a three percent equity interest in a business or the reasonable anticipation of more than $10,000 annual income or other compensation and benefits from a business. In addition, any conduct indicating undue influence by an employee in the performance of duties is prohibited regardless of the percentage of interest or amount of income.
The Commonwealth has recognized that the scholarly pursuits of university employees both enhance the economic well-being of the Commonwealth and provide tangible benefits to the good people of Virginia. Accordingly, there are several exceptions to prohibited conflicts.
The prohibition does not apply to certain enumerated types of contracts. §§ 2.2-3106.C. and 2.2-3110. Among these are some specifically applicable to institutions of higher education.
One is self-executing:
- Textbooks. No conflict arises from a contract with publisher or wholesaler of textbooks or other educational materials for students where the employee is the author or otherwise created the textbook or materials. (Note: Guidelines concerning the cost and availability of faculty textbooks are addressed in §23-4.3:1.C.). §2.2-3106.C.5.
Several others require findings, disclosures, and/or approvals:
- Dual employment. No conflict arises from the dual employment of an immediate family member where (1) the employee and family member are engaged in teaching, research, or administrative support positions; (2) the Board of Visitors finds that dual employment is in the best interests of the university; and (3) after such finding, the Board ensures that the employee or family member does not have sole authority to supervise, evaluate, or make personnel decisions regarding the other. §2.2-3106.C.2.
- Acquisition of scholarly works. No conflict arises from the employee’s contract with the university to acquire his or her collections or scholarly works, including manuscripts, musical scores, poetry, paintings, books, writings, or papers, where the president approves the acquisition as being in the best interests of the university’s public mission of service, research, or education. §2.2-3106.C.6.
- Research and development. Subject to approval of the Board of Visitors, no conflict arises from a contract for research and development or commercialization of intellectual property between the university and a business in which an employee has a personal interest (see above) where (1) the personal interest has been disclosed to and approved by the president before the parties enter into the contract, (2) the employee promptly and annually files a statement of economic interests pursuant to §2.2-3117, (3) the university has a formal policy regarding such contracts, and 4) the university annually discloses such contracts to the Secretary of the Commonwealth. §2.2-3106.C.8.
- Medical goods and services. Subject to approval of the Board of Visitors, no conflict arises from a contract for medical education or research-related goods and services, including the acquisition of drugs, therapies, and medical technologies, where (1) the personal interest has been disclosed to the university before the contract is entered into, (2) the employee promptly and annually files a statement of economic interests pursuant to §2.2-3117, (3) the employee does not participate in the university’s decision to contract, (4) the president finds and certifies in writing that such goods and services are needed for quality patient care and necessary for fulfillment of the university’s mission, and 5) the university annually discloses such contracts to the Secretary of the Commonwealth. (Note: This section is clearly directed at providing goods and services to medical schools, but potentially touches research activities of this university) §2.2-3106.C.9.
- General contracts. No conflict arises from a contract between the university and a business in which an employee has an equity interest in excess of three percent provided that (1) the employee’s interest is disclosed to the president, (2) the employee certifies that he or she has not participated and will not participate in contract negotiations for either party, (3) the president makes a public, written finding that the contract is in the best interests of the university, (4) the employee does not have the authority to procure or let the contract for the university or disqualifies himself or herself as a matter of public record, and (5) the employee does not participate on behalf of the university in negotiating or approving the contract. (Note: The primary impact of this section is in conflicts arising from the equity interests of immediate family members.) §2.2-3110.A.5.
A related exception applicable to employees of all governmental agencies (including the university) provides that no conflict arises from a contract between the university and a business from which the employee has more than $10,000 in annual income if the employee (or member of his or her immediate family) (1) does not participate in the business’s contracting process for the contract or have authority to do so and (2) does not have authority to participate in the university’s contracting process for the contract or publicly disqualifies himself or herself and does not participate in negotiating or approving the contract. §2.2-3110.A.4.