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Eye on Ethics

Arm's Length Transactions — Conflicts of Interest in Social Work
By Frederic G. Reamer, PhD
November/December 2018

In the legal and financial worlds, practitioners pay close attention to the concept of arm's length transactions. Put simply, to avoid a conflict of interest, parties involved in legal and financial transactions must be sure to keep each other at least an arm's length away. The concept is especially relevant when transactions involve people who know each other. The transaction is kept separate (at arm's length) from their personal relationship. To avoid impropriety or even the appearance of impropriety and a conflict of interest, an arm's length transaction can be used to keep the relationship businesslike, so the personal relationship is not affected.

The concept of arm's length transactions is important in social work because practitioners often become involved in transactions with people with whom they have an existing relationship. This is especially likely when social workers live and work in small and rural communities. These encounters can lead to complex boundary issues that require skilled handling. The following are several examples.

• A clinical social worker provided counseling to a married couple who were struggling to parent their adolescent daughter. During the course of treatment, the wife was hospitalized and the husband was laid off from his job as a landscaper. The family was in dire financial straits. The social worker felt badly for the family and referred the husband to several friends and neighbors who, she thought, might want landscaping assistance. The social worker also hired the husband to work on the grounds of her home. About six months later, the couple filed a licensing board complaint against the social worker alleging that she failed to provide them with competent counseling. During the legal proceedings the licensing board learned that the social worker had hired the client to work at her home. The board sanctioned the social worker for violating professional boundaries and engaging in a conflict of interest.

• A social worker who was executive director of an addictions treatment program received a large federal grant to provide state-of-the-art treatment to people diagnosed with co-occurring disorders. The grant required the social worker to submit quarterly accounting of the grant funds and expenditures. The social worker retained his sister, a certified public accountant, to prepare the reports. After the first year, the federal agency conducted a formal audit and cited the agency for several accounting irregularities. The federal auditor discovered that the social worker had used grant funds to hire and pay a close relative. The social worker and agency were sanctioned and lost the grant.

• A clinical social worker provided counseling to a 26-year-old man with a disability who used a wheelchair, and often had difficulty leaving his home. The client sought counseling to help him cope with strained family relationships. The client, who struggled with clinical depression, reported that he had been physically abused by two family members and was alienated from them. During the clinical relationship the client inherited a large sum of money when his parents died in an automobile accident. At about the same time, the social worker had established a foundation to provide clinical services to abused children. The social worker told the client about the new foundation and the client donated $25,000. About a year later the client filed a licensing board complaint that alleged that the social worker exploited him. The licensing board suspended the social worker's license after finding that he took advantage of his professional relationship with his client.

Historically, social workers have focused on conflicts of interest that can arise in their face-to-face relationships with clients. Now, however, given the prevalence of online social media and social networking sites, social workers should be especially mindful of newer forms of conflicts of interest that may require arm's length relationships. In the digital age, social workers may be approached for professional services by someone with whom they have had a longstanding Facebook relationship. Or, social workers may receive an online request to be a Facebook friend from a current or former client. In these instances, social workers must be alert to potential conflicts of interest.

Recently, I chaired a task force jointly sponsored by the NASW, Association of Social Work Boards, Council on Social Work Education, and Clinical Social Work Association that wrote the 2017 Standards for Technology in Social Work Practice. According to these standards, social workers should "reasonably ensure that they maintain clear professional boundaries (for example, social workers should be mindful of boundary confusion that may result if they disclose personal information about themselves or others in an online setting to which clients have access)."

Conflicts of Interest and Undue Influence
A consistent and prominent theme in such cases is conflict of interest. A conflict of interest occurs when a person is in a position to derive personal benefit from actions or decisions made in their official capacity. The benefit can be in various forms, such as money, employment, and sexual favors.

Some cases also involve what attorneys call undue influence. Undue influence occurs when social workers use their authority improperly to pressure, persuade, or sway a client to engage in an activity that may not be in the client's best interest. Examples include persuading a frail client to include the social worker in her will, influencing a minor in a way that is contrary to her parents' wishes, and convincing a client, during treatment, to include the social worker in a lucrative investment or business partnership.

For many years ethical guidelines in social work have prohibited practitioners from engaging in conflicts of interest and exerting undue influence. According to the NASW Code of Ethics, "Social workers should be alert to and avoid conflicts of interest that interfere with the exercise of professional discretion and impartial judgment. Social workers should inform clients when a real or potential conflict of interest arises and take reasonable steps to resolve the issue in a manner that makes the clients' interests primary and protects clients' interests to the greatest extent possible. In some cases, protecting clients' interests may require termination of the professional relationship with proper referral of the client. Social workers should not take unfair advantage of any professional relationship or exploit others to further their personal, religious, political, or business interests" (standard 1.06[a] and [b]).

Social workers should take several steps to avoid conflicts of interest and exerting undue influence. First, social workers should set clear boundaries in their relationships with clients and in their professional roles, recognizing that in some settings stricter boundaries are more appropriate than in other settings.

Second, social workers should be alert to potential conflicts of interest, including the appearance of a conflict interest. On occasion, social workers who do their best to steer clear of conflicts of interest find themselves accused of what appears to outside observers to be a conflict. For example, hiring a client to do landscaping work and paying the client a very fair wage, in order to provide the client with much-needed income, would certainly appear to be a conflict of interest even though the social worker did not intend any exploitation for self-serving purposes. Becoming a Facebook friend with a former client can also pose problems, especially considering that the client may want to return for additional professional services.

Third, social workers should pay close attention to ethical standards concerning professional boundaries, conflicts of interest, and undue influence. Consulting guidelines in the Code of Ethics and other practice standards is an important risk-management step. Finally, when necessary, social workers should consult thoughtful, principled, and trusted colleagues and supervisors who are very familiar with the social worker's duties, clientele served, and relevant ethical standards.

There are times in our professional relationships when having an arm's length relationship is necessary. And, there are other times when it's not. It behooves social workers to know the difference.

— Frederic G. Reamer, PhD, is a professor in the graduate program of the School of Social Work at Rhode Island College. He is the author of many books and articles, and his research has addressed mental health, health care, criminal justice, and professional ethics.