Reading Room Document

The Merit Pay System and Conflicts of Interest Principles

In this memo, the OLC explored “whether statutes or regulations governing conflicts of interest would be violated if a department supervisor covered by the merit pay system prepared an initial review, subject to reviews by a superior official, of the performance of employees who also are covered by merit pay, and whose merit pay salary adjustment will come from the same merit pay 'pool' as the supervisor’s adjustments.” In answering this question, the OLC considered 18 U.S.C. § 208 and the applicable standards of conduct in Executive Order No. 11222. It advised structuring the merit pay system to avoid this scenario given the risk of litigation and the possibiltiy that an adverse ruling could disrupt the Justice Department’s pay scheme.

October 6, 1981