Policy Number: 20

Conflict of Interest, Conflict of Commitment and Outside Activities

Subject:

Ethical obligations of university employees and participation in external activities 

Scope:

This policy applies to all employees of the university. Requirements for prior approval of outside activities and disclosure of outside activities and financial interests, may apply differently to benefits-eligible employees, non-benefits eligible employees and research employees. Portions of this policy also apply to students, interns, residents, clinical fellows and post-doctoral research fellows.  Individuals should refer to the definitions below and follow the requirements applicable to their status throughout the policy.  This policy does not address Research Conflicts of Interest. Refer to HOOP Policy 94 Research Conflicts of Interest.

Date Reviewed: December 2013

Responsible Office: Office of Institutional Compliance

Responsible Executive: Assistant Vice President and Chief Compliance Officer

I.     POLICY AND GENERAL STATEMENT

The primary responsibility of employees of the University of Texas Health Science Center at Houston (“university”) is the accomplishment of the duties and responsibilities assigned to their positions at the university. External consulting, outside employment or other activities that interfere with those duties and responsibilities are not acceptable. At the same time, the university recognizes the benefits of employees’ participation in outside activities that clearly enhance the mission of the university and/or provide important elements of employee development related to their university responsibilities.  This may include consultative or advisory activities with governmental agencies, other institutions, or private industry that are not in conflict with the proper discharge of their duties and responsibilities in the public interest. In keeping with the university's mission of education, research, and clinical practice, the university believes these outside activities have the potential to improve the performance of an employee through continuing contact with issues/problems in the non-academic fields that promote the university’s mission.

This policy is intended to protect the credibility and reputation of the university, the UT System, and members of the faculty and staff by providing a transparent system of approval, disclosure, and documentation of employee activities outside the university that might otherwise raise concerns about conflicts of interest or conflicts of commitment.

Accordingly, 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.  In addition, activities on behalf of outside entities or individuals must not interfere with a university employee’s fulfillment of his/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).

II.     DEFINITIONS

Benefits-Eligible: Those employees who are eligible for paid benefits offered by the university as defined in HOOP 17, Appointment Status.

Clinicians: Faculty members and trainees at all levels (i.e., students, interns, residents, fellows, post-doctoral trainees) in any patient care discipline, including specialties of medicine, dentistry, nursing, and allied health sciences.

Compensation: Any form of benefit including, but not limited to, salary, retainer, honoraria, intellectual property rights or royalties, equity and in-kind, promised, deferred, or contingent interests. Compensation also includes sponsored or reimbursed travel.

Conflict of commitment: A situation 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 his or her university responsibilities, or when the employee uses State property or other resources without authority in connection with the employee’s outside employment, board service, or other activity. For example, a faculty member who cancels university teaching or clinic responsibilities in order to perform work for an outside entity creates the appearance of a conflict of commitment.

Conflict of interest: An outside activity or financial interest of a university employee (or one of the employee’s family members) that could directly or significantly affect the employee’s performance of his or her university responsibilities. The proper discharge of an employee’s university responsibilities could be directly or significantly affected if the outside employment, service, activity, or interest:

Covered employees: Covered employees include: (a) employees who have been determined to be exempt from the Fair Labor Standards Act (FLSA) and are, therefore, not entitled to overtime pay and (b) employees who are not exempt from the FLSA but 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.

Family member: A spouse, a dependent child or 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.

Industry: Any for-profit entity or representative of such entity that develops, produces, markets, sells, or distributes any goods, services, or equipment for use by the university or participates in a contractual relationship with the university.

Outside activities: Work or other activity with non-university entities or individuals that are not part of one's university responsibilities.  This may include work or other activity with governmental agencies, industry, or other educational institutions. Outside activities do not include performance of university duties, regardless of location. For example, work on a university grant at a subcontractor's site or attending meetings of U.T. System committees do not constitute outside activities.  

Outside board: A board, council, or other governing or advisory body of a business, civic, professional, social, or religious organization, whether for-profit or non-profit.

Non-benefits eligible: Those employees who are not eligible for paid benefits offered by the university as defined in HOOP 17, Appointment Status.

Research employees: University employees, regardless of job title or status, who participate in research as Principal Investigators, Co-Investigators, or other roles and have been designated on any research project as a “Covered Individual,” i.e., responsible for the design, conduct, or reporting of research as defined in HOOP Policy 94, Research Conflicts of Interest.

Substantial interest in a business entity: For purposes of this policy, (1) a controlling interest; (2) ownership of more than 10 percent of the voting interest; (3) ownership of more than $5,000 of the fair market value; (4) 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 (5) 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.

III.     PROCEDURE

A.        Approval of Outside Activities

              1.         Activities Requiring Prior Approval

                    a.         General Provisions

Employees must obtain prior approval before engaging in outside activities and obtain re-approval on an annual basis. Approval is granted by the employee’s dean/administrative equivalent or designee. Requests must be submitted to the employee’s dean/administrative equivalent or designee prior to initiation of the activity and must use the university’s standard approval format provided and maintained by the Office of Institutional Compliance (“OIC”).  The Request for Approval of Participation in Outside Employment Activities template may be used for this purpose.  Additional guidance for faculty is provided in the Conflict of Interest and Outside Activities Decision Matrix for Faculty Activities.

Benefits-eligible covered employees must obtain prior approval before engaging in the following:

• all outside employment or other compensated activities;

• service on outside boards regardless of whether compensation is received, except as noted in Section III.A.2; and

• any uncompensated activity that would reasonably appear to create a conflict of interest or conflict of commitment.

Non-benefits eligible covered employees must obtain prior approval before engaging in any outside activity only if the activity would reasonably appear to create a conflict of interest or a conflict of commitment with their university responsibilities.

If the outside employment is with another Texas state agency or institution of higher education, refer to Section III.I.4.

The employee’s supervisor or any approving authority has the right to limit an employee’s outside activities if they conflict with the employee’s ability to perform the obligations of his or her university responsibilities. Approval may also be rescinded upon receipt of information indicating that the activity is not consistent with this policy or any applicable law or university or UT System policy. The employee for whom the activity has been rescinded shall be given notice of the information by the approving authority and an opportunity to respond.

                    b.         Retrospective or Prospective Approval

In rare instances, outside activity may be approved retrospectively when the individual is called upon to assist 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 individual describes to the approving authority as fully as reasonably possible 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.

                    c.         Confidential Outside Activity

If an individual wishes to engage in an activity for which some or all of the relevant information is confidential (i.e., classified government work or other information made confidential by law), the approving authority may nonetheless approve the activity (disclosure may still be required) upon satisfaction that there is a compelling reason to treat the information confidentially and the activity is otherwise fully compliant with this policy and all other applicable laws and university and UT System policies.

              2.         Outside Activities That Do Not Require Prior Approval

                    a.         Activities That Contribute to the Mission of the University

Certain outside activities that clearly contribute to the mission of the university and/or provide important elements of employee development related to their university responsibilities need not be approved prior to engagement in the activity. Such activities may need to be disclosed in accordance with this policy. Examples of such categories of activities would include:

• 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, 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.

Such activities may be subject to the 30 working days time limitation on faculty outside activities.  See Section III.C.2 and the Conflict of Interest and Outside Activities Decision Matrix for Faculty Activities for further guidance. 

                    b.         Certain Personal Activities

Participation on the board of a municipality; local religious congregation; neighborhood association; public, private or parochial school; political organization; youth sports or recreation league; affinity group such as the local orchid society or model train collectors club; and other similar outside boards on which the service is primarily personal rather than professional in nature and does not require time away from university responsibilities, does not require advance approval and disclosure if it does not create a real or perceived conflict of interest or conflict of commitment.  This exception does not include service on the board of a religious organization that provides services that the university provides, such as a religious hospital or academic institution, which does require prior approval and must be disclosed. 

Additional guidance for faculty on activities that do not require prior approval is provided in the Conflict of Interest and Outside Activities Decision Matrix for Faculty Activities.

B.        Required Disclosure of Outside Activities and Financial Interests

              1.         General Rule

All covered employees and research employees are required to disclose outside activities and financial interests through the annual financial disclosure process. The information disclosed will vary based upon whether an employee is a benefits-eligible covered employee, non-benefits eligible covered employee or a research employee. Additional disclosure may be required by individual schools or units at the university. The annual disclosure shall be in the form provided through the OIC.  In addition, any change to an annual disclosure (e.g., a new outside activity or a newly acquired financial interest) must be disclosed within 30 days of the new activity or interest.

In addition to the requirements of this policy, the President of the university shall fully comply with UTS 123 concerning service on outside boards and shall provide justification for how the outside board service benefits his or her duties and responsibilities.  

                    a.         Benefits-Eligible Covered Employees and Research Employees

Benefits-eligible covered employees and all research employees are required to disclose the following categories of outside activities and financial interests. Further clarification regarding disclosure requirements, including those activities and interests that may be excluded from disclosure, is provided within the financial disclosure form provided by the OIC and the Conflict of Interest and Outside Activities Decision Matrix for Faculty Activities.

• All outside employment or other compensated activities, including compensation earned;

• Any outside (on-site or distance) teaching that is related to the same discipline as the employee’s area of university teaching;

• All service on outside boards, regardless of compensation, except as noted in Section III.A.2;

• Any other activity, regardless of compensation, that would reasonably appear to create a conflict of interest or a conflict of commitment;

• Substantial interests in outside entities with which the employee has the potential to interact in their university responsibilities or which otherwise reasonably appear to create a conflict;

• Income from intellectual property rights held and any agreements to share in royalties related to those rights, if income is received from any entity other than the university;

• All gifts that exceed $250 in value to the employee or his/her family member that would reasonably appear to create a conflict of interest;

• Reimbursed or sponsored travel (i.e. provided by outside entities with which the employee has the potential to interact in their university responsibilities or which otherwise reasonably appear to create a conflict); and

• Outside activities and financial interests of family members if they would reasonably appear to create a conflict of interest (i.e. the activity or interest is with an entity with which the employee has the potential to interact in their university responsibilities).

                    b.         Non-Benefits Eligible Covered Employees

Non-benefits eligible covered employees, other than research employees, are required to disclose outside activities and financial interests only if the activity or interest would reasonably appear to create a conflict of interest. Employees in this category are not required to disclose for family members.

C.        Use of University Time for Outside Activities

              1.         General Provisions

In general, outside activities (e.g., outside employment, outside board service for which an employee is compensated, and any service to a religious organization) must be performed on the employee’s own time.  If the service occurs during normal office hours, the employee must use vacation time, compensatory time, or other appropriate leave while providing the service.  The service should be without cost to the university and, except as noted in Section III.A.2, must be disclosed and approved prior to engaging in such service.

              2.         Faculty Outside Activities Approved During University Time

With supervisory approval, full-time faculty members may devote up to 30 working days in any fiscal year to activities that clearly contribute to the mission of the university and/or provide important elements of faculty development related to their university responsibilities, as long as these activities are not in conflict with the proper discharge of their duties and responsibilities in the public interest. Examples include acting in an editorial capacity for a professional journal, attending and presenting talks at scholarly colloquia and conferences, and serving as a committee member, officer, or board member of a professional or scholarly society.  This 30 working day time threshold does not apply to or affect service on a federal, state, or local government agency committee, panel, or commission (e.g., NIH review panel), professional collaborations (related to the faculty member’s university responsibilities) with other institutions of higher education or with an academic teaching hospital, medical center, or research institute affiliated with an institution of higher education, reviewing manuscripts and research projects, developing scholarly communications or required attendance for service in the United States armed forces. (See HOOP Policy 41 Military Leave.) Further guidance is provided in the Conflict of Interest and Outside Activities Decision Matrix for Faculty Activities. Additional days of outside consultative or advisory activities may be granted with prior, appropriate supervisory approval and prior approval of the respective school’s dean or designee.  Approval of the President or the President’s designee and a management plan are required if the outside activity exceeds on average one day per week during the fiscal year.  Information on the appropriate documentation of time and attendance is outlined in HOOP Policy 24 Time and Attendance Reporting.

D.        Institutional Conflicts of Interest Committee

The OIC shall maintain an Institutional Conflicts of Interest Committee (ICOIC), established by the Executive Compliance Committee.  The ICOIC will review financial disclosures and proposed management of identified conflicts of interest and conflicts of commitment.

Existing relationships that were approved and/or allowed under the prior policy, but which are not in full compliance with the principles herein, will be reviewed and considered by the ICOIC on a case-by-case basis.

E.        Management of Conflicts

An Institutional Conflict of Interest Management Plan (“Plan”) must be in place for any covered employee who participates in an outside activity or holds a financial interest that may create a real or perceived conflict of interest or a conflict of commitment. The Plan must be in place before the outside activity begins or at the time the financial interest is disclosed. Plans will be initiated by the OIC; however, the employee’s supervisor will recommend the most appropriate management strategies and will be responsible for oversight of the employee’s compliance with the Plan. Each Plan will include expected standards of conduct and must be in the form of a written agreement. Each plan must also document the employee’s receipt of the Plan and understanding of the requirements of this policy and the required actions and other terms of the Plan, including time frames for required actions. The Plan must be approved by the employee’s supervisor and additional approving authorities as applicable.  The Senior Executive Vice President/Chief Operating and Financial Officer must approve all Plans.

In addition, for financial conflicts of interest in research, the Executive Vice President for Academic and Research Affairs must approve a separate Research Conflict of Interest Management Plan (“Research Plan”) prior to the employee’s participation in the related research at the university.

In cases where sponsored research agreements or licensing agreements for intellectual property are made by the university with an entity in which a covered employee owns an interest or serves as an employee, officer, or member of the board of directors of the entity, the Plan (including any associated Research Plan) must also be approved by the President, The University of Texas System Office of General Counsel, and the Executive Vice Chancellor for Health Affairs.

Additionally, when the university accepts a gift, grant, donation, or other consideration from a person that the person designates to be used as a salary supplement for an employee of the institution, the receiving entity shall analyze the gift, grant or donation for potential conflicts of interest.  If a conflict of interest exists, the university shall utilize its current processes and procedures to eliminate or manage the conflict.

F.         Appeals

Employees whose request for approval of an outside activity is denied, or who disagree with the terms and conditions of an approved Plan, may request in writing that the decision-making authority reconsider the decision. The decision-making authority must provide a written summary of his or her review to the employee.  If the employee remains unsatisfied with the decision, he or she may access the applicable university grievance procedures.

G.        Electronic Database

              1.         Internal UT System Electronic Database

Disclosure of outside activity, documentation of requests for approval, and subsequent approvals shall be maintained for all benefits-eligible covered employees in an electronic database that will include the following elements:

(a)        a 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;

(b)        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;

(c)        a description of the nature and extent of outside board service, except as noted at Section III.A.2;

(d)       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;

(e)        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

For non-benefits eligible covered employees, the database will contain 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.

              2.         Public Display of Information

The following information shall be available on a publically accessible and searchable database on the university’s website:

(i) For all managed conflicts of interest or conflicts of commitment, the nature and extent of the activity, and the range of compensation if over $5,000, unless deemed confidential as determined by the approving authority;

(ii) All information disclosed by the President pursuant to section III.B above; and

(iii) Instructions for gaining access to a copy of any conflict management plan.

Information regarding family members will not be posted publicly.

H.        Clinician Relationships with Industry

This policy also addresses the interactions clinicians have with industry that might occur as part of the duties and responsibilities assigned to their positions or during the course of training programs, to ensure to the fullest extent possible that the integrity of clinical decision making is not compromised by financial or other personal relationships with industry.  Interactions with industry must be regulated and in some cases prohibited to avoid conflicts of interest and perceptions of such conflicts.  Guidance is provided in the Conflict of Interest and Outside Activities Decision Matrix for Clinician Relationships with Industry.  A summary of prohibited activities is provided below.  If a particular activity is not listed, it is expected that clinicians will act appropriately to avoid real and potential conflicts and will seek guidance from their department chair, dean, or the OIC.

I.          Provisions Applicable to All University Employees

              1.        Elective Offices

Employees who wish to engage in political activity that will interfere with the performance of their duties and responsibilities should voluntarily terminate employment. Being a candidate for an elective office, holding an elective public office, or directing the political campaign of a candidate for an elective public office are examples of political activities which may interfere with the performance of an employee’s duties. If the President determines that the employee’s political activities interfere with the performance of his or her duties and responsibilities or determines that the employee’s political activities do not comply with the requirements of this policy, the employee may be subject to appropriate disciplinary action, up to and including termination.

              2.         Use of University Name and Resources

Employees who perform work in a private capacity must make it clear to those who employ them that the work is unofficial and ensure that the name of UT System or the university is not in any way connected with the employee’s name, except when used to identify the employee as the author of work related to the employee’s academic or research area. Employees may not use university stationery or give any university building or department as a business address in connection with any work performed in a private capacity.

Additionally, employees may not accept personal compensation from private persons or corporations for tests, assays, chemical analyses, bacteriological examinations or other such work of a routine character that involves using property owned by the university, UT System, or any other UT System institution unless advance permission is obtained from the President and provision has been made for compensation to the university, UT System, or to the appropriate UT System component institution.

              3.         Use of Professional Opinions for Advertising

Employees who give professional opinions must protect the university and UT System against the use of such opinions for advertising purposes. If the employee does work in a private capacity, the employee must make it clear to those who employ him or her that the work is unofficial and that the name of the university and UT System are not in any way to be connected with the employee’s name, except when used to identify the employee as the author of work related to the employee’s academic or research area.

              4.         Multiple Employments with the State

If outside employment is with another Texas state agency or institution of higher education, the employee and supervisor must follow the procedures outlined in HOOP Policy 21 Multiple Employments with Texas State Agencies.

J.         Non-Compliance

Failure to comply with any portion of this policy, applicable federal regulations, state laws, Rules and Regulations of The University of Texas Board of Regents, UT System policies, university policies, and/or the terms of an approved Plan may result in the total withdrawal of, or limitations to, the university’s approval of the employee’s outside activities. Further, such failure may result in disciplinary action, up to and including termination of employment. Civil and criminal penalties may also apply under certain circumstances.

Employees should report any suspected noncompliance to their immediate supervisors or to the OIC. Employees may also anonymously report suspected violations to the toll-free Compliance Hotline at 1-888-472-9868. In accordance with HOOP Policy 108 Protection from Retaliation, retaliation for a good-faith report of suspected violations will not be tolerated. Detailed information on reporting possible violations may be found in the university’s Standards of Conduct Guide.

K.        Training

This policy and the related matrices will be distributed to all employees annually. On-going education shall be provided to all employees through mandatory compliance training. 

For further explanation and guidance regarding this policy, refer to the Conflicts of Interest Guidelines, Standards of Conduct Guide or contact the OIC. 

IV.     CONTACTS

ContactTelephoneEmail/Web Address
Office of Institutional Compliance 713-500-3294

compliance@uth.tmc.edu

http://www.uthouston.edu/compliance/