SJC Increases Penalties for Public Employee Off-Duty Misconduct

A public employee who engages in private misconduct can lose his or her pension, even if the misconduct is unrelated to any official action, so long as the conduct involves criminal dishonesty. In the much-anticipated decision of State Board of Retirement v. Bulger released Monday, March 6, 2006, the Supreme Judicial Court held that Jack Bulger, brother to Former Senator and U-Mass President Billy and fugitive Whitey, must lose his pension as a result of pleading guilty to charges of perjury and obstruction of justice based on statements made to Federal agents investigating his fugitive brother.
Bulger was a public employee for 37 years, the last 20 as a Clerk-Magistrate of Boston Juvenile Court. Based on statements Jack made during the FBI investigation into the whereabouts of Whitey, the FBI charged him with perjury and obstruction of justice. He ultimately pleaded guilty to four counts.

The SJC case deals solely with the issue of whether, in spite of the guilty pleas, Bulger still may receive benefits under the state retirement system. In a unanimous decision authored by Justice Martha Sosman, the Court answered "NO."

Massachusetts General Laws Chapter 32, §15(4) deprives a public pension to any public employee who receives a "final conviction of a criminal offense involving violation of the laws applicable to his office or position, be entitled to receive a retirement allowance…."

Court cases have frequently held that a convict loses his or her pension if the underlying criminal offense relates to official duties of the public job. In other words, a municipal official who is convicted of skimming funds from the employer obviously loses a pension. See, e.g., Gaffney v. Contributory Retirement Appeal Bd, 423 Mass. 1 (1996). The Bulger case is somewhat unique for the forfeiture arises from indisputably off-duty conduct.

The decision re-affirms the SJC’s view that a) honesty or integrity is fundamental to most public employee jobs, at least those jobs involving courts or law enforcement; and b) dishonesty and interference with law enforcement likely requires loss of the job as well as the pension.

The Bulger case may be troubling in light of another recent SJC case involving public employee misconduct. In City Of Boston v. Boston Police Patrolmen’s Ass’n, 443 Mass. 813 (2005), a unanimous SJC held that a police officer who was found to have repeatedly lied and abused his authority cannot be reinstated to the police department. This irreversible termination must be the result, even where the Union shows that the City has a clear record of suspending, not terminating, officers who engaged in worse conduct, and said officer has a clean disciplinary record.

While this particular Boston officer was never convicted by a jury of perjury or any other crime beyond a reasonable doubt, the SJC’s decision nevertheless relied on the arbitrator’s findings to conclude that he committed perjury. It found perjury to be a capital crime. "One of the most important police functions is to create and maintain a feeling of security in communities. To that end, it is extremely important for the police to gain and preserve public trust, maintain public confidence, and avoid an abuse of power by law enforcement officials." City Of Boston v. BPPA, 443 Mass. 813, 819 (2005)

The specific provision of pension forfeiture law discussed in Bulger, Chapter 32, §15(4), clearly requires that an actual conviction of perjury or obstruction of justice occur before an employee’s pension is forfeited. Other forfeiture provisions establish a much lower threshold. An employee may lose his or her pension if found to have "misappropriated funds." The Courts have permitted expansive interpretations of this definition. For instance, in Doherty v. Retirement Board of Medford, 425 Mass. 130 (1997), a police officer was acquitted of federal criminal charges of stealing a police entrance examination for his son. Nonetheless, the retirement board relied on criminal trial testimony to find that he stole the exam. The Board found that by this action, which involved no financial graft, the employee "misappropriated funds." The appropriated funds consisted of "the salary and other payments received by [officer] from the [employer] by virtue of his fraudulently obtained employment as a police officer."

Going forward, we here at Sandulli Grace will argue that off-duty lying or interference, to disqualify an employee from pension, should be limited to a) employees who take an oath for their job; and b) the lie interferes with compliance with laws or government investigations. By contrast, a lie underlying sick leave use, we believe, should not result in either irreversible termination or pension forfeiture. As the law continues to develop, we will continue to keep you informed.

The Bulger case stands as a stark reminder of the severe civil, criminal and financial consequences that face public employees who are found, rightly or wrongly, to have engaged in criminal misconduct, especially perjury or obstruction of justice, whether on or off-duty.