                                                            November 24, 1978

78-61 MEMORANDUM FOR THE GENERAL COUNSEL,
      FEDERAL MEDIATION AND CONCILIATION
      SERVICE
      Department of Labor—Boards of Inquiry—Payments
      to Federal Employees From Non-Government Sources
      (18 U.S.C. § 209)—Proposed Supplementation of
      Compensation

   This responds to your request for our opinion whether a proposal to
supplement the salary paid to arbitrators who are members of Boards of Inquiry
appointed under 29 U.S.C. § 183 would be permissible under the Federal
conflict-of-interest laws. You inquire further whether a particular system of
supplementation involving unequal contributions by the various parties to a
dispute would raise additional legal problems. We have concluded that a
supplementation arrangement would not result in violation of the applicable
conflict provision, 18 U.S.C. § 209. We believe, however, that your decision
regarding the handling of unequal contributions may be influenced by the
requirement that distribution of additional funds be accomplished by the parties
themselves or some entity other than the Federal Mediation and Conciliation
Service (FMCS). We also recommend that you consider revising pertinent
FMCS regulations before any such supplementation proposal is implemented.
   Pursuant to 29 U.S.C. § 183, Boards of Inquiry are appointed by the FMCS
to conciliate certain disputes in the health care industry. Members of these
boards are selected from a roster of private arbitrators maintained by the FMCS
and the boards are required by law to issue their reports within 15 days of
their establishment. In unusual cases an individual arbitrator may serve on more
than one board in a given year. You indicate that in many instances service for a
full 15 days in connection with a single inquiry is not required. However, in
no event has an arbitrator served on as many as eight Boards of Inquiry in a
single year.
   Compensation of members of Boards of Inquiry is set by statute at the GS-18
rate. The proposal in question is that this compensation, which amounts to $183
per day, be supplemented by voluntary contributions of the parties to the

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dispute to approximate more closely the prevailing rate for arbitral services—$200 to
$400 per day.
   Section 209(a) prohibits the receipt of salary or contribution to or supplemen­
tation of salary as compensation for services rendered as an officer or employee
of the executive branch of the United States or of any independent agency.
However, 18 U.S.C. § 209(c) specifically exempts “ special government
employees” from the prohibition. Section 202(a) of title 18 defines “ special
government employees” as those who are appointed to perform temporary
duties either on a full-time or intermittent basis, for a period not to exceed 130
days during any period of 365 consecutive days. The period of 130 days is,
moreover, to be ascertained by reference to the anticipated period of employ­
ment, not the duration of actual service. So long as the existing practice is
continued, whereby Board members are appointed for terms of not more than
 15 days and, whenever reappointed, would serve in total no more than 130
days in any period of 365 consecutive days, they would qualify as special
Government employees, and supplementation of their compensation would not
be prohibited by § 209.
   Two additional questions are raised, however. First, we are uncertain
whether you plan to provide for distribution of the supplemental funds through
the FMCS itself, or directly through the parties. Absent statutory authorization
to accept gifts, the Service could not itself participate in such an arrangement.
We are not aware of any such authority. This limitation may well bear on the
procedures to be adopted where only one party agrees to provide supplemental
funds or where the parties agree to pay varying amounts. Although you might
devise a pooling arrangement, the creation of such a mechanism may prove
more difficult in the circumstances of this case. Apart from this consideration,
we are aware of no other legal impediment to an arrangement involving unequal
contributions by the parties.
   Finally, consideration should be given to the more explicit requirements
imposed by the FMCS’s Standards of Conduct set out in 29 CFR Part 1400.
Section 1400.735-30 applies certain of those rules to special Government
employees. One of the applicable rules, § 1400.735-11, provides that except as
otherwise specifically permitted “ an employee shall not . . . accept . . . any
gift, . . . or any other thing of monetary value, from a person who . . . (2)
[c]onducts operations or activities that are affected by Federal Mediation and
Conciliation Service functions.” The acceptance of a compensation supple­
ment is not in the nature of a gift, and may well fall within the intended
coverage of § 1400.735-12, which governs employment and is specifically
rendered inapplicable to special Government employees. We are, however,
uncertain whether you have adopted such an interpretation of this provision
rather than a more literal reading that might bar acceptance of any such
consideration. You may therefore wish to consider whether the list of



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exceptions found in subsection (b) of § 1400.735-11 should be expanded
specifically to include approval of the proposed compensation supplements.
                                             L e o n U lm a n
                                   Deputy Assistant Attorney General
                                                 Office of Legal Counsel




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