Moving to private sector employment after federal service comes with restrictions

By Kari HawkinsSeptember 18, 2017

(Photo Credit: U.S. Army) VIEW ORIGINAL

REDSTONE ARSENAL, Ala. -- Along with the awards and personal items packed up in moving boxes, federal employees who resign or retire often must also take with them an awareness of the ethical rules governing post-government service employment if they decide to unpack those boxes with an employer in the private sector.

With the exception of certain procurement situations and being employed by a foreign government, federal ethics rules don't prohibit former employees from obtaining employment with a particular employer. But their duties may be constrained based on their past government work.

"For the most part, the post government employment restrictions are representational," said Larry Wilde, an attorney with the Army Materiel Command Office of Command Counsel who advises on ethical issues.

"In other words, when the restrictions apply, they generally prohibit communications and appearances by the former employee back to the government, but not the employment itself."

Current federal employees who are seeking a non-federal job while continuing federal employment are considered to have a financial interest in any company with which they are negotiating for employment. To avoid creating a conflict of interest, they may not take any official action that could affect the financial interests of these companies.

After leaving federal employment, this restriction goes away. What remains is a series of statutes that impose restrictions on non-federal employment that are generally based on the former employee's civilian rank and whether their new job duties require them to communicate with federal employees concerning things they worked on while in federal service.

"There are many misconceptions about the post government employment ethics restrictions," Wilde said. "Many people who see me for advice are under the impression that the rules are more restrictive in some areas than they actually are. With a few exceptions, federal ethics restrictions will likely not prevent anyone from taking and performing a post government service job that doesn't involve matters they worked on as federal employee."

For example, it might be assumed that a former contracting officer representative could not be hired by the same company whose contract they oversaw as a federal employee. Even though seeking such employment while still in federal service would represent a prohibited conflict of interest, seeking and being hired after federal service ends would be allowed, Wilde said.

"Although the ethics rules would not prohibit the former COR from working for the company, the rules would bar the employee from representing them, such as through a communication or appearance, before a federal employee regarding the specific contract he or she oversaw," he said.

"The representation restriction applies to particular matters such as individual contracts, claims or grants. It doesn't apply to general subject areas, like logistics or vehicle maintenance."

The length of the representation restriction varies depending on the level of the former employee's involvement with the matter in question.

"Employees who were personally and substantially involved with a particular matter, such as the example of a COR overseeing a contract, are barred from communicating about it with federal employees on behalf of their employer for the lifetime of the matter," Wilde said. "If the employee did not personally work on the matter, but it fell within his or her official responsibility in their final year of federal service, the restriction lasts for two years. The restriction does not apply to former enlisted Soldiers."

A much broader representational restriction applies only to certain senior officials, such general or flag officers, and to most Senior Executive Service civilians, he said. In addition to the communication ban covering the particular matters with which they were involved, these senior officials are also barred for one year from seeking any official action before an officer or employee of the agency in which they served, such as the Army, on behalf of a third party.

"The one year ban for senior officers, often referred to as the one year 'cooling off' period, is very broad because it covers communications about any official matter without regard to whether or not the former official had any involvement with it while in federal service," Wilde said. "The restriction is intended to prevent the appearance that former senior officers can improperly influence government decision makers in their former agency because of their former senior positions."

Other post government service ethics restrictions apply to advising or representing a third party in trade or treaty negotiations, and to retired military members working for foreign governments. There are also some exceptions to the rules.

"A previously obscure restriction that is now receiving a lot of publicity is the Emoluments Clause of the U.S. Constitution," Wilde said.

The Emoluments Clause prohibits current federal employees and retired military personnel and Reservists from receiving pay from foreign governments without Congressional authorization. The penalty for violating the Emoluments Clause for retired military members is the suspension of retired military pay during the period of the violation.

This article has presented only a bare outline of the statutes and regulations concerning post government service employment, Wilde said.

"The rules in this area are complicated and many are criminal in nature," he cautioned. "Their application depends on the unique set of facts presented by each individual. Senior officials, those involved with procurements, and anyone considering post government employment in a subject area they worked on while in federal service should definitely seek written guidance from a certified ethics counselor. In many cases, the employing company will insist on it to keep themselves out of trouble."