RCW 42.52.120(1)(e) prohibits a state officer or employee from accepting outside employment under a contract or grant expressly authorized by the officer's or employee's agency. However, a state agency's provision of funds to an outside entity through a contract or grant does not automatically prohibit a state employee from accepting employment with the recipient of the contract or grant.

2. Does the prohibition in RCW 42.52.120(1)(e) apply if the officer or employee enters into a contract for outside employment with another person who has a contract expressly authorized by the officer's or employee's agency?

2. The answer to Question 2 depends on the nature of the contract between the agency and the person offering outside employment to the officer or employee. A state agency's provision of funds to an outside employer through a contract or grant does not automatically prohibit a state employee from accepting outside employment with the recipient of the contract or grant. However, the outside employment may be prohibited depending on the nature of the contract between the agency and the outside employer and the scope of the work performed for the outside employer.

(1) No state officer or state employee may received any thing of economic value under any contract or grant outside of his or her official duties. The prohibition in this subsection does not apply where the state officer or state employee has complied with RCW 42.52.030(2) or each of the following conditions are met: . . . .
(e) the contract or grant is not one expressly created or authorized by the officer or employee in his or her official capacity or by his or her agency[.]

(Emphasis added.)

Question 1 asks about the application of this provision to a contract between an officer or employee and the agency that employees the officer or employee. For example, the Department of Social and Health Services lets contracts for medicaid personal care (MPC) services for the care of eligible persons. Such contracts may be let to the parents of eligible individuals so that they can provide the care. The question is whether an employee of DSHS can enter into such a contract with the DSHS to provide care to a family member or other person.

In our judgment the answer is no. RCW 42.52.120(1)(e) specifically prohibits entering into a contract expressly created or authorized by the officer's or employee's agency. The prohibition is not dependent on other factors such as whether the DSHS employee is in a position to influence the issuance of the contract. In a large agency such as DSHS the person responsible for authorizing the contract may not even know that the individual receiving the contract is a DSHS employee. However, the application of RCW 42.52.120(1)(e) does not turn on such factors. It prohibits outside employment if the contract is expressly created or authorized by the officer's or employee's agency. The outside employment in Question 1 plainly falls within this prohibition.

Question 2 raises a somewhat different situation. State agencies enter into contracts and make grants to provide services to people. Some state officers and employees get outside employment with the recipients of these contracts and grants. Thus, the officer or employee is one step removed from having a contract or grant directly authorized by the officer's or employee's agency. DSHS provides several examples of this situation.

1. A part-time psychiatric security attendant at the DSHS Special Commitment Center holds outside employment as a full-time prevention case manager at a nonprofit agency. The nonprofit agency contracts with DSHS to provide several group care beds, foster care beds, and crisis residential center beds.

2. A registered nurse who is employed in the DSHS Medical Assistance Administration (MAA) holds outside employment as a staff nurse at a local hospital. The hospital contracts with DSHS to provide services to Medicaid clients. The duties of the nurse with MAA are not related to the administration or supervision of the contract with the hospital. Her duties at the hospital include providing nursing care to Medicaid patients as well as other patients of the hospital; they do not include making a pre-determination of which patients are "private-pay" and which are "public-pay" patients.

3. Several psychiatrists employed full-time at Western State Hospital, an inpatient psychiatric facility operated by DSHS, hold part-time employment with local mental health centers to provide medication prescriptions for the center's clients. The mental health centers are funded by the county-operated Regional Support Networks (RSNs), which in turn are funded through the DSHS Mental Health Division under authority of RCW 71.24.030.

The question in these examples is whether these contracts for outside employment are expressly authorized or created by DSHS. In our judgement the answer is no. DSHS did not actually create or authorize the contracts between the recipients of its contracts and grants and the DSHS employees. Although DSHS does not authorize or create the contracts between the outside employers and the DSHS employees, DSHS does have a contract or provides grant money to the outside employer. Thus, the narrow issue is whether providing money to an outside employer, through either a contract or grant, will trigger RCW 42.52.120(1)(e).

The answer depends on the scope of the work performed for the outside employer. For example, if DSHS entered into a contract with an organization to do a study and the organization hired a DSHS employee to do the study work and paid the DSHS employee with contract funds, it would be fair to say that the contract between the organization and the DSHS employee was expressly authorized or created by DSHS. On the other hand, if DSHS has a contract with an organization to do some research and a DSHS employee is employed by the organization doing a completely different kind of job, it is difficult to see how that contract between the DSHS employee and the organization could have been authorized or created by DSHS

As applied to the DSHS examples, DSHS contracts with agencies to provide services, but this appears to have nothing to do with the DSHS' employee's outside employment with the service providers.
1. In the first example, DSHS contracts with non-profit agencies to provide group care beds, foster care beds, and residential center beds. This appears to have nothing to do with the DSHS employee's outside employment as a prevention case manager.

2. In the second example, DSHS contracts with a hospital to provide services to Medicare clients. The DSHS employee who has outside employment as a staff nurse in the hospital provides care to both Medicaid and non-Medicaid clients. The nurse's contract with the hospital is not dependent upon the Medicaid contract since the hospital provides services to both Medicaid and non-Medicaid patients.

3. In the third example, the relationship between DSHS and the outside employment contract is even more attenuated since DSHS provides grants to regional support networks which in turn fund the mental health centers. The psychiatrists' employment contracts are unrelated to the DSHS grants.

In summary, simply providing funds to an outside employer through a contract or grant does not meet the terms of RCW 42.51.120(1)(e), unless the outside employment is directly related to the performance of the DSHS contract or grant that it amounts to little more than a pass through of the funds from agency to the officer or employee of the agency.