May 16, 2024 - by MSBA Staff

Navigating the Ethical Boundaries of Secondary Employment in the Legal Profession

Side hustles, or second jobs, are more prevalent now than ever before, with many people seeking multiple sources of revenue. While generally people are free to supplement their incomes as they choose, those working in the legal profession are bound by certain ethical obligations that may prevent them from taking on certain secondary employment. Recently, the Maryland Judicial Ethics Committee analyzed whether a District Court Commissioner could engage in secondary employment as a real estate agent, ultimately determining they could not. The opinion delivered by the Ethics Committee serves as a reminder that members of the judiciary have an obligation to remain impartial and independent, in and outside of their primary roles.

The Commissioner’s Background

The party seeking guidance from the Committee was a District Court Commissioner who wanted to know if they could hold a second job as a real estate agent. The Commissioner shared that they worked for a company owned by a family member, and that their clients came solely from referrals from friends and family.

They explained that, as a real estate agent, they did not determine if a person could buy a home, or the cost of the home; rather, the purchaser must be qualified under the federal financial guidelines to purchase. The Commissioner also noted that any commission they earned as a real estate agent was paid directly to the real estate company, after which the company would distribute payment to each team member involved in the sale, which they deemed “standard practice.”

Further, the Commissioner stated that if a party to a judicial proceeding was a person they interacted with as a real estate agent, they would recuse themselves from the proceeding, noting that the structure of the Commissioner’s office allowed for any easy reassignment of cases, if necessary.

Finally, the Commissioner pointed out that there was a strict separation between their judicial duties and real estate activities, and they complied with the Real Estate Code of Ethics.

The Committee’s Findings

The Maryland Code of Conduct for Judicial Appointees, as delineated in Title 18, Chapter 200 of the Maryland Rules, establishes the ethical standards for judicial appointees, which includes District Court Commissioners. Multiple Rules applied to the Commissioner's question.

Rule 18-201.2 dictates judicial appointees have an obligation to conduct themselves in a manner that fosters trust in the judiciary's independence, integrity, and impartiality. This includes avoiding contact that could imply impropriety.

Similarly, Rule 18-201.3 prohibits judicial appointees from leveraging their position's authority or reputation to further their personal or financial interests, whether for themselves or others, while Rule 18-202.1 emphasizes that the duties associated with a judicial appointee's position must take precedence over any personal or extraneous activities.

Rule 18-202.4 emphasizes the importance of impartiality, mandating that judicial appointees must not allow familial, social, political, financial, or other personal interests to unduly influence their official conduct or judgment. Rule 18-203.1 clarifies that judicial appointees can engage in extra-official activities, provided that such activities do not interfere with their official duties, lead to frequent disqualification, or compromise their independence, integrity, or impartiality.

Lastly, Rule 18-203.11 defines the parameters of a judicial appointees' permissible involvement in financial, business, or remunerative activities, and Rule 18-203.12 clarifies judicial appointees can accept reasonable compensation for extra-official activities, provided that such compensation does not undermine the appointee's independence, integrity, or impartiality.

After applying the above-noted rules to the facts of the case, the Committee expressed concerns regarding a Commissioner holding secondary employment as a real estate agent, as it could lead to conflicts of interest and compromise the impartiality of the judiciary. The Committee explained that while real estate commissions are initially paid to the real estate company, agents ultimately benefit from sales commissions. This arrangement could violate the Code, as it involved the Commissioner directly interacting with clients. Additionally, while compensation is assumed to be within standard ranges, the fluid nature of actual compensation could raise suspicions of impropriety.

The Committee also noted that the Commissioner could potentially encounter conflicts of interest by interacting with clients who had prior dealings with them as a Commissioner. Similarly, there's a risk of encountering individuals who previously appeared before the Requestor in their judicial capacity. Due to the nature of these interactions between the parties involved, they may require disqualification. As such, the Committee concluded that the Judicial Code of Conduct prohibited judicial appointees from holding second jobs as real estate agents, in order to maintain the independence and integrity of the judiciary.

You can read the entire opinion here.