PROCEDURES

PROCEDURES . . . DIVESTITURE

Department of Commerce, Patent and Trademark Office, Arlington, Virginia and Patent Office Professional Association, Case No. 00 FSIP 55, June 12, 2001 (Release No. 440).

The UNION proposed that the parties adopt the following Factfinder's recommendation on § G, as modified in bold:

G.1.: Before issuing any suggestion or directive to divest, the office of the Designated Agency Ethics Officer (DAEO) must contact the employee and verify the employee's technological area of primary responsibility. Any directive to divest will include the description of the employee's technological area of primary responsibility.

G.2.: An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634, Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. The Office shall support the employee's request for a COD [certificate of divestiture] unless there is well-established precedent to the contrary and application of the precedent to the facts is clear cut. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee. The employee may appeal this decision to the Director of the PTO.

G.3.: (i) In the event the Office directs an examiner to divest financial holdings as a result of a conflict created by an Office-initiated action or through an inadvertent mistake on the part of the examiner, the Office shall provide such notice in writing and will allow 30 days for divestiture, but not before a requested COD has been granted or denied. For assets not listed on an exchange, the Office shall allow 90 days for divestment; [Bold in original.]

(ii) The notice shall inform the examiner of the possibility of obtaining a COD (providing for non-recognition of gain in the case of a sale to comply with the conflict of interest requirements) as provided for under 5 C.F.R. Part 2634, Subpart J, and shall provide a form letter to request a COD from the Office of Government Ethics.

The AGENCY proposed that the Panel reject the wording recommended by the Factfinder in §§ G.1 and G.3.(i); and adopt the following wording in §§ G.2. and G.3.(ii), instead of that recommended by the Factfinder:

G.2.: An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634, Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee.

G.3.: (ii) In the event that divestiture is necessary, the bargaining-unit member will be provided written notice specifying all relevant particulars and requirements, including the work matter(s) and the bargaining-unit employee's particular financial interest, available options to remove the conflict and manner(s) by which the bargaining unit may exercise such options.

The PANEL ordered the parties to adopt the following:

G.1.: Before issuing any suggestion or directive to divest, the office of the DAEO must contact the employee and verify the employee's technological area or primary responsibility. Any directive to divest will include the description of the employee's technological area or primary responsibility.

G.2.: An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634, Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. The Office shall support the employee's request for a COD unless there is well-established precedent to the contrary and application of the precedent to the facts is clear cut. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee.

G.3.: In the event the Office directs an examiner to divest financial holdings as a result of a conflict created by an Office-initiated action or through an inadvertent mistake on the part of the examiner, the Office shall provide such notice in writing and will allow 30 days for divestiture, but not before a requested COD has been granted or denied.