Executives Moving From The Private to the Public Sector: In Some Ways a Different World
When a senior executive level employee switches jobs between the private and public sectors, what are some of the changes to the norms of employment?
One key difference is the public nature of employment in the public sector – chiefly because public funds are involved. Salaries and severance payments are public in the public sectors (for example, the controversy du jour about increases in Minnesota state department head salaries) as are contracts and summary performance evaluations. The State Open Meeting Law governs performance evaluations and investigations. The State auditor can have access to public employee accounts and expenditures. Under many circumstances, the factual bases for a disciplinary action or resignation that occurs while a disciplinary matter is pending are public data. The public nature of public employment can sometimes come as unwelcome news to an executive used to the private world of the private sector.
Other public sector differences are caps on severance payments for public employees. Highly-compensated employees (earning more than approximately $72,000 a year) are limited to six month’s compensation in severance, all others are limited to one-year severance. There are exceptions for sick leave and continued insurance payments. It is safe to say that public sector higher level executives need to have lower severance pay expectations than in the private sector.
But there are also protections in the public sector not found in private employment chiefly due to the application of constitutional rights. An example would be rights associated with a disciplinary investigation. A public sector executive has Loudermill due process rights to know and respond to the reasons for a proposed disciplinary action. He or she has the Tennessen right to know the potential use of all data that can come out of a disciplinary investigation. There is the Garrity right to be assured that a compelled statement cannot be used in a criminal proceeding. Paid administrative leaves are more common as the slower public employment investigation process works out. There are also provisions in the Data Practices Act protecting non-public private personnel data from disclosure and allowing for rebuttal data. In short, for any public sector executive in difficult straits there may well be better internal protection than given a private sector executive.
Takeaway: If you are a senior executive employee in the private sector considering a move to the public sector, it would be a good idea to sit down with legal counsel and get a firm idea of what norms will change in the employment relationship.