The Attorney General of Texas
December 29, 1978
JOHN L. HILL
Attorney General
Honorable John Wilson Ooinion No. H- 1317
Chairman
House Committee on Health & Welfare Re: Whether an administrative
State Capitol rule of the Texa LSDepartment of
Austin, Texas 78711 Human Resources prohibiting
departmental personnel from
being licensed as real estate
brokers or salesmen is a valid
employment rule.
Dear Representative Wilson:
You have requested an opinion as to whether the Department of Human
Resources csn enforce a regulation which prohibits department employees
from acquiring real estate licenses. The purpose of this policy is to avoid
potential conflicts of interest involving clients of the department. See
V.T.C.S., art. 6252-9b, § 8. The issue presented is whether the rule%
overbroad in its total prohibition of an outside real estate occupation because
there is a possibility of a conflict of interest. The department informs us it
would be difficult to police real estate transactions with the department’s
clients without a total ban which is relatively easily enforced by checking the
records of the Texas Real Estate Commission. You advise that eligibility for
client benefits under department guidelines depends upon other income
resources available to the client, and clients are often advised by the
department that real property held by them must be converted to cash if they
are to remain eligible for benefits. The rule in question was adopted to
prevent department employees having access to client files from improperly
using the information, and, further, to avoid any appearance of impropriety
should a department employee innocently deal with department clients in
pursuing a real estate business.
One’s right to work and earn an income, whether characterized as a
liberty or a property interest, is a valuable right which should not be curtailed
without substantial state interest. See Bishop v. Wood, 426 U.S. 341 (1976);
Board of Regents v. Roth, 408 U.S. 5640972); Perry v. Sindermann, 408 U.S.
593 (l972); Schware v. Board of Bar Examiners, 353 U.S. 232 (1957). In that
we believe the deoartment rule to be overbroad. it is unauthorized bv the rule
making authority of the Department of Human Resources. V.T.C.S., arts.
695c, SS 3, 33; 6953-1, g 10. Cf. Cleveland Board of Education v. LaFleur, 414
U.S. 632 (1974) (pregnancy 1eaTrules overbroad).
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Honorable John Wilson - Page2 (8-13X7)
We believe the line of authority which has upheld regulations which prohibit firemen
and policemen from holding second jobs is clearly distinguishable. These employees are
often on call at all hours, Their physical and mental condition which is vital to the
performance of their duties should not be overtaxed by holding outside employment. See
Lombardino v. Firemen’s and Policemen’s Civil Service Comm’n, 310 S.W.2d 651 (Tex. ciii:
ADD. - San Antonio 1958, writ ref’d n.r.e.) (citv detective dismissed for enaaeirie in
o&de occuoation of debt-collection): Trelfa vi Vfilaee of Centre Island. 389 N.F.g.22 22
(S. Ct. Appl Div. 1976) (prohibition of outside employment by police valid); Cox v.
McNamara, 493 P.2d 54 (Ore. Ct. App. 1972) (prohibition upheld as to police), cert. den.,
469 U.S. g82 (1972); Annot.. 88 A.L.R.2d 1235 (1963); but see City of Crowley Firemen.
City of Crowley, 2&OSo.2d 897 (La. 1973) (ordinance Erohtbttmu outstde emolovment
- . was
arbitrary and violated constitutional right of due process). -
Although few courts have addressed the issue, we believe that the prohibition which
is the basis of your inquiry is arbitrary unless there is a clear public purpose as has been
articulated in the cases concerning firemen and policemen. In Natilson v. Hodson, 47
N.E.2d 442 (N.Y. Ct. App. 1943) a social investigator for the Department of Welfare was
discharged for violating the rule against outside employment by doing accounting work for
a fee after his normal work day. There was no allegation that the outside work interfered
with the employee’s performance with the department and the court ordered him
reinstated. Similarly, in Putkowski v. Carey, 52 N.Y.S.2d 42 (Sup. Ct. 19441, the court held
that a rule which forbade an employee of the Department of Sanitation from working a
second job at a plant making war materials exceeded the power of the department.
To the extent that the rule of the Texas Department of Human Resources precludes
any employee’s possession of a real estate license where no conflict of interest is involved
and the employee’s performance is in no way impaired, the rule lacks statutory authority
and is invalid. Cf. Attorney General Opinion H-R62 (1978). Of course, more precisely
drawn regulatio=hich relate narrowly to the interest of the department could be validly
drawn. -See Attorney General Opinion H-1223 (1978); Letter Advisory No. 62 (1973).
SUMMARY
The Department of Human Resources may not prohibit all
employees from being licensed as a real estate broker or
agent ,where no conflict of interest is involved and the
employee’s performance is in no way impaired.
Attorney General of Texas
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Honorable John Wilson - Page3 (R-1317)
APPROVED:
bLw
u
DAVID M. KENDALL, First Assistant
Opinion Committee ’
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