Montana State University
Office of Legal Counsel > What is Nepotism?

Office of Legal Counsel

Montana State University
211 Montana Hall
Bozeman, MT 59717

Tel: (406) 994-4570
Fax: (406) 994-1893

Legal Counsel:

Leslie C. Taylor
lesliet@montana.edu

What is Nepotism?

Date: April 4, 2006
To: Dave Dooley, Provost
From: Leslie C. Taylor, Legal Counsel
Re: Nepotism

You asked me to summarize my research regarding nepotism. "Nepotism" is defined by state statute as "the bestowal of political patronage by reason of relationship rather than merit." Section 2-2-301, MCA. Under Montana law, it is unlawful "for a person or any member of any board, bureau, or commission or employee at the head of any department of this state or any political subdivision of this state to appoint to any position of trust or emolument any person related or connected by consanguinity within the fourth degree or by affinity within the second degree." Section 2-2-302, MCA. It is also unlawful to "enter into any agreement or any promise . . . to appoint [a relative] to any position of trust or emolument." Section 2-2-303, MCA. Copies of the statutes are attached as Attachment A.

The nepotism statutes, which date back to 1933, have been interpreted by a series of Attorney General Opinions. The purpose of the statutes is to prevent favoritism and conflicts of interest by public agencies in hiring and to make hiring decisions based upon merit rather than relationship. 43 A.G. Op. 23 (1989). "Like any statute that speaks broadly and admits few exceptions, these provisions may occasionally penalize a worthy applicant . . . ." 43 A.G. Op. 23 (1989.

Thus, the Attorney General ruled that the mayor's appointment of his son-in-law to the position of Chief of Police violates the nepotism statutes, even if the son-in-law was the most qualified candidate for the position. 37 A.G. Op. 49 (1977).

However, there was no violation of nepotism laws when the daughter of state liquor store vendor was an employee in her father's liquor store. The nepotism statute "prohibits a person from 'appointing' a relative within the prohibitory degree, to any position of trust or emolument". 27 A.G. Op. 21 (1957). Since the Liquor Control Board has the exclusive right to hire and fire employees of the store, the Attorney General found that the employment of the vendor's daughter in the same liquor store as her father was permissible under the nepotism statutes.

The statutes prohibit the "appointment" of a relative to any position of trust or emolument. "Emolument" is defined as "any perquisite, advantage, profit, or gain arising from the possession of office. " Black's Law Dictionary, Fifth Edition (1979). Therefore, it is my opinion that the nepotism statute is violated if the related employee has the authority to hire, fire, or decide issues of salary, promotion, leaves of absence or any other job-related benefits for a relative within the prohibited degree of affinity.

MSU has a nepotism policy which states:

No employee of Montana State University may participate in decisions which would involve a direct benefit or detriment (appointment, hiring, retention, promotion, salary, leave of absence) to a relative [as defined by the policy]. If a relative applies for a position which is supervised by a relative, the immediate senior to such a supervisor or other designated authority will be responsible for instituting any special procedures required to assure consideration based solely on merit.

See MSU Personnel Policy & Procedures, Section 430.

There may also be perceived conflicts of interest with hiring relatives using federal grant funds. The concern arises both from a classic financial conflict of interest concern and the potential concern for lack of objectivity in the research outcomes. OMB Circular A-110 states in pertinent part:

No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient.

NIH conflict of interest policy for grantees states:

Prudent stewardship of public funds that support research programs requires that appropriate steps be taken to ensure high quality results. Therefore, recipient organizations must establish safeguards to prevent employees, consultants, or members of governing bodies from using their positions for purposes that are, or give the appearance of being, motivated by a desire for private financial gain for themselves or others such as those with whom they have family, business, or other ties. Therefore, each institution receiving PHS funds must have written policy guidelines on conflict of interest and avoidance thereof. These guidelines should reflect state and local laws and must cover financial interests, gifts, gratuities and favors, nepotism, and other areas such as political participation and bribery. These rules must also indicate how outside activities, relationships, and financial interests are reviewed by the responsible and objective institution official(s)

One should also keep in mind that while MSU is bound by the existing nepotism laws, a qualified applicant should not be denied an opportunity for a position on campus merely because he or she is related to another employee on campus. State anti-discrimination laws prohibit discrimination on the basis of marital status. Federal Executive Order #11246, as amended, requires federal contractors to ensure that their personnel policies and practices do not discriminate against employees or applicants on the basis of race, color, religion, sex or national origin. Among those practices identified which may have the effect of discriminating against individuals on the basis of sex are anti-nepotism policies.

For these reasons, it has been my opinion that if a person related to an employee is hired under a competitive search by a hiring authority or committee which is free from the influence of the relative who is currently an employee, there is no violation of the nepotism laws. The object is to hire solely on the basis of merit and a competitive search process should identify and document that only the most qualified applicants were considered.

It is further my opinion that supervision of a relative would not be a violation of the nepotism statutes, unless the supervising relative has authority to hire, fire or otherwise grant benefits to the relative employee.

I hope this provides you with the necessary information to adequately address this matter. Please feel free to contact me if you have any questions.