Handbook of Operating Procedures 5-2011

Conflict of Interest, Conflict of Commitment, and Outside Activities

University of Texas SealEffective January 06, 2014
Executive Sponsor: Executive Vice President and ProvostPolicy Owner: Executive Vice President and Provost and Vice President for Legal Affairs
I. Policy Statement 

It is the policy of The University of Texas at Austin (“University”) to provide a transparent system of disclosure, approval, and documentation of its employees’ 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 The University of Texas System (“UT System”) Board of Regents’ Rules and Regulations and is intended to provide the framework for rules and procedures to clearly delineate permissible outside activities. To the extent this policy conflicts with any other policy in the University's Handbook of Operating Procedures ("HOP") this policy controls.

II. Reason for Policy 

To provide the institutional framework to protect the credibility and reputation of the University and its faculty and staff when those employees are engaged in outside activities.

III. Scope & Audience 

This policy applies to all University employees.

IV. Definitions (specific to this policy) 
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. It also includes sponsored travel or reimbursement.

 

(Note: Sponsored or reimbursed travel is included for consistency with Public Health Service regulations and UTS 175 governing conflicts of interest in research (42 CFR Sec. 50.603, definition of “significant financial interest,” at (2)). It does not apply to travel that is reimbursed or sponsored by a federal, state, or local government agency, an institution of higher education, an academic teaching hospital, a medical center, or a research institute that is affiliated with an institution of higher education.)

Conflict of Commitment:

A state in which the time or effort that a University employee devotes to an outside activity directly or significantly interferes with the employee’s fulfillment of University responsibilities or when the employee uses state property without authority in connection with the employee’s outside employment, board service, or other activity (See Sec. 8, Regents' Rule 30104). Exceeding the amount of total time permitted by UT System or University policy for outside activities creates the appearance of a conflict of commitment.

Conflict of Interest:

A significant outside interest of a University employee or one of the employee’s immediate family members that could directly or significantly affect the employee’s performance of the employee’s institutional responsibilities. The proper discharge of an employee’s University responsibilities could be directly or significantly affected if the employment, service, activity or interest: (1) 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; (2) could reasonably be expected to impair the employee’s judgment in performing his or her University responsibilities; or (3) might require or induce the employee to disclose confidential or proprietary information acquired through the performance of University responsibilities.

Immediate Family Members:

Includes –

 

  • 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 management plan is 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 activities.

Nature and Extent:

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

Outside Board:

The 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 activity performed by an employee, other than fulfilling employment obligations at UT System or a UT System institution, for which remuneration is received, including distance teaching.

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.

Range of Compensation:

Includes a range of outside compensation as follows -

 

  1. $0 - $4,999;

 

  1. $5,000 - $9,999;

 

  1. $10,000 - $19,999;

 

  1. amounts between $20,000 - $100,000 by increments of $20,000; or

 

  1. amounts above $100,000 by increments of $50,000.

 

  1. if compensated in the form of stock options, the number of shares represented by those options, the value of the stock if the options are exercised and percentage of ownership in the company that would result from exercising those options.
Substantial Interest in a Business Entity:

For purposes of this policy, means:

 

  1. a controlling interest;

 

  1. ownership of more than 10 percent of the voting interest;

 

  1. ownership of more than $5,000 of the fair market value;

 

  1. 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

 

  1. 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.

University Time:

For faculty, this time is defined by the number of hours per week necessary for the performance of job duties, which include teaching, research, service, and patient care. In general, it is assumed this is a forty hour week Monday through Friday. For some staff this time is defined by a work day with set hours, and for other staff this time is defined as a work day with set hours plus on call service as needed.

V. Website (for policy) 
http://www.policies.utexas.edu/policies/hop/5-2011
VI. Contacts 
Contact Details Web
Office of the Vice President for Legal AffairsPhone:512-471-1241Website:
Office of the Executive Vice President and ProvostPhone:512-471-4363Website:
VII. Responsibilities & Procedures 
  1. Primary Responsibility

The primary responsibility of employees of the University is the accomplishment of the duties and responsibilities assigned to one’s position of appointment.

 

  1. Outside Activities
  1. Regents’ Rule 30104 permits University employees to engage in outside work or activities, as long as the work or activity complies with requirements of the Rule and does not violate state laws or UT System or University rules or policies governing the conduct of employees, including ethics standards and provisions prohibiting conflicts of interest, conflicts of commitment, and use of state resources.
  1. 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. The following activities are 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 UT System and institution 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.

 

  1. Outside employment during those months in which a member of the faculty appointed on a 9-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 VII.D.2, below, and may be maintained in an electronic database in accord with Section VII.J, below.

 

  1. 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).

 

  1. Disclosure and Approval
  1. Approval Requirements
  1. Approval requirements shall apply, at a minimum, to:
  1. all full-time members of the faculty employed on a 12-month or 9-month basis;
     
  2. part-time members of the faculty only if the activity reasonably appears to create a conflict of interest;
     
  3. full-time professional and administrative employees (as defined above)
  1. part-time professional and administrative employees only if the activity reasonably appears to create a conflict of interest.
  1. Graduate student academic employees including, but not limited to, teaching assistants, instructional assistants and research assistants are not covered under Section VII.D of the policy.
  1. Approval is required prior to engaging in the following activities, except as noted at (d), below, for:
  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.
  1. Pre-Approved Activities. The following activities are “pre-approved,” such that approval need not be obtained prior to engagement in the activity.
  • 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 UT System and institution policies and guidelines; and
  • Serving as a committee member, an officer, or board member of a professional or scholarly society. 

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.

 

  1. Each full-time faculty, full-time professional and administrative staff, are required to disclose annually, or more frequently as may be required per Section VII.G below:

(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;
  1. 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;
  1. 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;
  1. the range of total annual compensation received for any compensated activity, or total annual compensation from a single entity, if it is greater than $5,000 and the activity reasonably appears to create a conflict of interest or a conflict of commitment;
  1. a description of the nature and extent of outside board service, regardless of compensation, (see Section VII.E.4 below, for details, including exclusions);
  1. a description, including the range of compensation or interest, 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;
  1. 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;
  1. 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; and
  1. outside activity disclosed under HOP 7-1210 - "Promoting Objectivity in Research by Managing, Reducing or Eliminating Financial Conflicts of Interest" need not be re-disclosed.

 

  1. Part-Time Employees

Part-time members of the faculty and part-time members of the professional and administrative staff are required to disclose the nature and extent (but not compensation range) of any outside activity and any substantial interest in a business entity (as defined above) that reasonably appears to create a conflict of interest. Part-time employees are not required by this policy to disclose for family members.

 

  1. Guidelines for Reviewing and Approving Requests to Engage in Outside Activity
  1. Approval Authorities

The president appoints the following individuals as approval authorities under this policy:

 

  1. For members of the faculty: the department chair (or the dean for non-departmentalized schools/colleges);
  1. For department chairs: the dean
  1. For deans: the provost
  1. For executive officers: the president
  1. For the president: the executive vice chancellor for academic affairs
  1. For professional and administrative staff: their supervisor
  1. For other employees: their supervisor

 

  1. 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, but may be permitted to engage in an average of no more than 8 hours of all approved outside activity during University time (as defined above) each week, so long as the activity does not reasonably appear to create a conflict of interest, does not interfere with the faculty member’s University duties and responsibilities, and clearly contributes to the mission of the University or provides important elements of faculty professional development related to their University duties and responsibilities.

 

  1. Categories of Outside Faculty Activity 
  1. Some activity is so integral to the mission of the University that it is encouraged and may be performed on University time (as defined above) and may be considered pre-approved, so long as the activity does not reasonably appear to create a conflict of interest and the amount of time committed does not interfere with the faculty member’s University duties and responsibilities. This may include activities such as the following:
  • 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, grant or contract proposals.
  • Attending and presenting talks at scholarly colloquia and conferences.
  • Developing scholarly communications in books, journal articles, reviews, movies, television productions, and similar works, even when such activities result in financial gain, consistent with intellectual property and other applicable UT System and University policies and guidelines.
  • Serving as a committee member, an officer, or board member of a professional or scholarly organization.
  1. A category of outside faculty activity that, when disclosed and approved, is permitted, can be encouraged, and may be performed during the university time permitted above includes:

Engaging in professional activity such as providing expert testimony, providing consulting services, professional/clinical practice, and serving on a board of directors, but only when such activity clearly contributes to the mission of the University or provides important elements of faculty professional development related to the faculty member’s University duties and responsibilities, and the activity does not reasonably appear to create a conflict of interest and does not interfere with the faculty member’s University duties and responsibilities.
 

  1. Faculty members may also engage in activity that does not necessarily contribute to the mission of the University or provide elements of faculty professional development related to their University duties and responsibilities, so long as it does not reasonably appear to create a conflict of interest or a conflict of commitment with the faculty member’s University duties and responsibilities. Any such activity must take place only on non-University time, without use of University resources, and must be disclosed and approved as required by this policy.

 

  1. Accounting for Outside Board Service
  1. Uncompensated Outside Board Service of Direct Benefit to UT, Other Than Scholarly Boards Pre-Approved in Section VII.D.d, Above

Regents’ Rule 30104 recognizes the benefit to be derived by UT institutions from outside board service. After thorough consideration of the time commitment, certain service on outside boards may be deemed to be of sufficient benefit to the University that certain service may be performed on University time. The service:

 

  1. must be service on a nonreligious board;
  1. must be uncompensated (other than for reimbursement of usual and customary expenses); 
  1. requires prior approval; and
  1. requires disclosure.

 

  1. 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. 
  1. The service must be without cost to UT System or its institutions.
  1. 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. 
  1. Compensated service on a nonreligious board requires prior approval and must be disclosed, except as noted at (c), below.
  1. 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. 

 

  1. Management Plans

Management plans must be in place for all faculty and professional and administrative staff for outside activities that may create a conflict of interest or conflict of commitment before activity begins. All management plans related to research will be developed by the employee in conjunction with the Office of Research Support and approved by the Office of the Vice President for Research. Management plans unrelated to research 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 Vice President for Legal Affairs.

 

  1. Appeals

Employees whose request for approval of outside 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 appeal up one level of approval authority. For example, if approval is denied by a department chair, a faculty member could appeal to the dean. If the employee is still unsatisfied he or she may access standard grievance procedures to the extent they are applicable. 

 

  1. Prospective and Retrospective Approval

In rare instances, outside activity 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.  

 

  1. 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, University policies, and UT System rules and policies.  

 

  1. Rescinding Approvals

An approving authority may rescind an approved outside activity upon receipt of information indicating the activity is not consistent with this policy or any applicable law, University policy, or UT System rule or policy. The individual for whom the activity may be rescinded shall be given notice in writing and have an opportunity to respond.

 

  1. Electronic Database
  1. Items Included in Internal UT System Electronic Database

Disclosure of outside activity, documentation of requests for approval, and subsequent approvals shall be maintained for all full-time faculty and full-time professional and administrative staff in an electronic database that will include the following elements:

 

  1. description of the nature and extent of all outside employment or other compensated activity and of all outside activity, regardless of compensation level, that reasonably appears to create a conflict of interest or a conflict of commitment;
  1. the range of total annual compensation received for any compensated activity, or total annual compensation from a single entity, if it is greater than $5,000 and the activity reasonably appears to create a conflict of interest or a conflict of commitment;
  1. a description of the nature and extent of outside board service, except as noted in Sections VII.E.4.b.iii and VII.E.4.c;
  1. a description, including the range of compensation or interest of any substantial interest in a business entity  that reasonably appears to create a conflict of interest;
  1. a description of gifts over $250 to the individual, but only if the gift reasonably appears to create a conflict of interest, and it is not a gift from one’s spouse, parent, child, sibling, grandparent, or grandchild; or from the spouse of a parent, child, sibling, grandparent, or grandchild; or from the parent, child, sibling, grandparent, or grandchild of one’s spouse; and
  1. for part-time members of the faculty and part-time members of the professional and administrative staff, a description or the nature and extent of any outside activity and any substantial interest in a  business entity that reasonably appears to create a conflict of interest.

 

  1. Public Display of Information

Only the following information must be available on a publicly accessible and searchable website:

 

  1. the nature and extent of the activity, and the range of compensation if over $5,000, for all managed conflicts of interest or conflicts of commitment, unless deemed confidential following procedures developed in accord with Section VII.H above; and
  1. all information disclosed by the chancellor, UT System executive officers, and presidents pursuant to Section VII.D.2 above, and
  1. instructions for gaining access via the Texas Public Information Act to a copy of any conflict management plan, except for any confidential information protected pursuant to Section VII.H, above.
  1. information regarding family members will not be posted publicly.

 

  1. Noncompliance

Noncompliance with this policy may subject one to discipline in accord with applicable University procedures, up to and including termination of employment.

 

  1. 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 activity must be explicitly approved in writing by the approving authority.

 

  1. Education and Training  
  1. Employees with responsibility for approving and managing outside activities and interests covered by this policy must take training offered by the University.
  1. The University will annually distribute this policy to all employees.

 

  1. 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.

XI. History 

Effective date: January 6, 2014

Next scheduled review: January 2016