With the end of the Biden Administration, the start of the Trump 2.0 Administration, and a change of power in the U.S. House, the steady churn of high-skill professionals moving in and out of government positions has reached an all-time high. Indeed, beyond the typical cadre of newly unemployed political appointees, the incoming Trump Administration has set off an unprecedented stream of career federal employees seeking new roles away from government. At the same time, many experienced private sector executives are entering government for the first time.
Amid the pressure to attract the best talent, prospective employers are understandably focused on identifying the most promising candidates best prepared to bring their experience in government to bear in the private sector. But, what if the very experience in government that makes a candidate so appealing will in fact limit that candidate’s ability to do their job? This unfortunate paradox is all too familiar for many private employers who have brought on new employees only to learn that unforeseen post-government employment restrictions render their new employees unable to perform many of the most crucial aspects of their new jobs. For both the company and the employee, this is an embarrassing and costly fiasco. It is therefore essential that companies who hire government officials understand the potential post-employment restrictions that may apply before the job offer is extended.
To assist individuals and prospective employers in identifying and addressing potential issues before they arise, this advisory provides an overview of the most important post-employment restrictions applicable to federal officials and employees, while highlighting similar provisions adopted by state and local governments throughout the country. We then identify a number of steps private employers can take to ensure their newest hires are ready and able to hit the ground running on their first day in the office.
Executive Branch Restrictions
The primary statutory restrictions applicable to former federal employees are included among the criminal conflicts-of-interest provisions set forth in 18 U.S.C. § 207. Section 207, together with the implementing regulations adopted by the Office of Government Ethics (“OGE”), imposes restrictions of varying scope and duration based on a former employee’s seniority and prior activities. While most of these provisions target direct interactions intended to influence current federal employees, certain former officials are prohibited from engaging even in behind-the-scenes efforts to assist others in making such outreach.
“Switching Sides” Restrictions for All Executive Branch Employees
The most fundamental federal revolving door restriction bars former employees from “switching sides” in a particular matter after they leave government service. This provision applies to all executive branch employees and, depending on the former employee’s role in government, runs either for two years following the employee’s departure from government service or, for certain matters, for the rest of the employee’s life.
The two-year ban applies to any “communication to or appearance before” a federal court or agency, “with the intent to influence,” in connection with a “particular matter” involving specific parties: (1) in which the United States has a direct and substantial interest; and (2) that the employee knows or should know was pending under his or her official responsibility during his or her final year of government service. This cooling-off period applies even if the individual did not personally work on the matter in question. For matters in which the employee “personally and substantially” participated as a government employee, this cooling-off period extends to a lifetime ban.
While the principle underlying this rule is intuitive, this apparent simplicity conceals hidden traps for the unwary. For example, although the statute generally does not prohibit behind-the-scenes activities, even conduct that may seem innocuous—like mentioning that a former colleague sends his or her regards—may raise potential criminal liability if accompanied by an intent to influence agency action.
Similarly, while the definition of the term “particular matter involv[ing] a specific party” may seem obvious, OGE regulations emphasize that the “same particular matter may continue in another form or in part.” While switching sides in litigation is obviously prohibited, what about working on an issue that connects in some tangential way to a contract or permitting proceeding in which the individual participated? In determining whether two ostensibly distinct matters are in fact the same matter taking different forms, OGE advises that “all relevant factors” must be considered, including “the extent to which the matters involve the same basic facts, the same or related parties, related issues, the same confidential information, and the amount of time elapsed.” This added complexity is particularly significant for federal contractors hiring former government employees to assist in multi-phased or other long-running or complex agreements.
Heightened Restrictions for High-Level Officials
In addition to the basic switching-sides restrictions that apply to all executive branch employees, certain high-level agency officials are subject to more stringent restrictions upon the end of their government service. Given that these officials are often the most sought-after agency veterans or political appointees, companies are well advised to review these more restrictive rules carefully before finalizing any hiring decisions.
For so-called “senior” employees—including those paid on the Executive Schedule (or at a rate of $195,231 or more), military officers in pay grade O-7 or above, and certain White House staff—a cooling-off period on communications or appearances intended to influence their former agencies, in connection with a matter on which they seek official action, lasts for one year after they leave government. This period is extended to two years for their “very senior” colleagues, which includes agency heads, staff of the Executive Office of the President paid at Level II of the Executive Schedule, and other senior White House staff, and restricts communications with or appearances before not only their former agencies but also all Executive Schedule employees anywhere in the federal government.
In addition, former senior and very senior officials are barred from representing a foreign government or political party before any federal agency for one year after leaving government. And, importantly, while the other restrictions outlined above prohibit only actual communications and appearances before government officials, this one-year cooling-off period also applies to aiding or advising a covered foreign entity behind the scenes with the intent to influence the U.S. government.
Biden Executive Order (The “Ethics Pledge”)
As discussed at length in a prior advisory, beyond the generally applicable statutory restrictions imposed on all federal employees, President Biden issued an executive order upon taking office that required all political appointees in his administration to sign an ethics pledge that imposed several additional post-employment restrictions. While this order remained in place throughout the Biden years, President Trump rescinded the Biden order soon after his second swearing-in.
It remains to be seen whether President Trump will adopt an executive order on ethics for his appointees, imposing additional restrictions on them beyond what is specified in statutes and regulations. So far, he has not issued such an executive order.
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For ease of reference, a chart summarizing the general post-employment restrictions for former federal executive branch employees is available here. Although this chart provides a high-level summary of the relevant restrictions, the application of these restrictions is highly fact-specific, and employers are well-advised to seek the advice of experienced counsel both before making an offer to a new employee and whenever questions regarding these restrictions arise.
Department of Defense-Specific Restrictions
Like their senior counterparts in other agencies, former Department of Defense officials and employees have long been subject to additional post-employment restrictions beyond the general side-switching restrictions applicable to all federal employees.
For example, certain Defense Department employees must request written guidance regarding the scope of their post-employment restrictions before receiving compensation from a DOD contractor within two years after exiting government. This mandatory request for written ethics guidance applies to senior military and civilian leaders (i.e., officers in grade O-7 or above and employees in an Executive Schedule position) who participate “personally and substantially” in a procurement valued at more than $10 million, as well as any official who serves in one of several key roles in connection with such a procurement (e.g., program manager or deputy program manager, procuring and administrative contracting officers, and members of a source selection board).
Separately, Section 1045 of the 2018 National Defense Authorization Act prohibits former senior DOD military and civilian officials from engaging in certain “lobbying contacts” or “lobbying activities” with respect to the entire Defense Department. As interpreted by DOD, this restriction applies to direct communications with covered DOD officials, as well as direct communications and certain behind-the-scenes preparation and planning to assist with such communications with covered officials outside of DOD regarding a “matter with respect to DOD.” Generally speaking, a “matter with respect to DOD” has been interpreted to mean a “matter in which the DoD is an identifiable party, such as contract or litigation proceedings” and would not include matters that merely benefit or otherwise affect DOD in some way.
This DOD-specific provision imposes a one-year cooling-off period for officers in grade O-7 or O-8 (as well as their civilian equivalents), with this period doubled for officers in grade O-9 or above (and their civilian equivalents). More broadly, former DOD officials are prohibited from sharing in any compensation for representational services before the executive branch or federal judiciary at a time when the former official was employed by DOD.
Given the unique post-employment restrictions imposed on former DOD officials, companies seeking to hire current or recently retired DOD officials should take extra precautions to ensure that they do not run afoul of these more stringent and lesser-known restrictions.
Special Considerations for Government Contractors
Under federal procurement integrity rules, officials involved in certain federal procurement activities are also subject to special restrictions not applicable to other executive branch employees.
Most significant among these, officials who serve in certain enumerated capacities with respect to a procurement in excess of $10 million are generally prohibited from receiving any employment or consultant compensation from an awardee in that procurement for one year after leaving government service. For example, a restriction could apply to someone seeking employment from a contractor and who was a member of a source selection evaluation board at the time of an award to that contractor in excess of $10 million. Separately, all agency officials participating “personally and substantially” in a federal agency procurement must promptly report to their supervisor any contacts with offerors in that procurement regarding possible employment. Generally, the official must either reject the offer or disqualify themselves from further personal and substantial participation in the relevant procurement action, unless the agency authorizes continued participation.
Government contractors should also be aware of the federal standards governing organizational conflicts of interest in contract competitions. In some cases, the Government Accountability Office has found that a contractor can be disqualified from a procurement if hard facts show it gained an unfair competitive advantage based on hiring a former agency official with knowledge of non-public, competitively useful information about the procurement, among other factors. This issue can be raised by an agency or by a competitor in a bid protest.
Legislative Branch Restrictions
While the post-employment restrictions described above primarily target former executive branch officials and employees, Members of Congress and their staff must abide by many similar restrictions under both federal law and congressional ethics rules.
For example, like their counterparts in the executive branch, former legislative branch officials and employees are generally prohibited from lobbying some or all of their former colleagues on the Hill. As with executive branch employees, the duration and scope of this lobbying ban depends on an individual’s level of seniority upon exiting federal employment.
By statute, Senators and Representatives are barred from making, with the intent to influence, communications or appearances before Congress entirely (for two years and one year, respectively). A similar one-year ban applies to former senior Senate employees communicating with or appearing before the U.S. Senate. A separate one-year cooling-off period applies to former senior House staff communicating with or appearing before their former Member or that Member’s employees. Other restrictions apply to former committee staff or leadership staff. While these cooling-off periods apply only to actual communications or appearances, former members and “senior” staff—like senior executive branch officials—are also prohibited from representing, aiding, or advising foreign governments and political parties with the intent to influence the federal government.
Beyond these statutory provisions, House and Senate rules impose additional restrictions and requirements on some or all congressional staff. In particular, under Senate Rule XXXVII, all former Senate employees who register as a lobbyist, are employed by a lobbyist, or are employed by an entity that itself retains a lobbyist are subject to a one-year cooling-off period with respect to their former office or committee. Finally, while the House has not adopted a separate post-employment rule, both House and Senate rules require Members and senior staff to disclose any negotiations and agreements of future employment to their respective Ethics Committee within three days and to immediately recuse themselves from any matter presenting a conflict or appearance thereof arising out of those negotiations.
As compared to the many complicated provisions that apply to different executive branch officials, the lobbying restrictions applicable to former congressional officials and staff are often more familiar to private employers. Nonetheless, companies seeking to hire from the Hill should take steps to ensure that they understand these restrictions and their implications for new employees.
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For ease of reference, a chart summarizing the various post-employment restrictions applicable to former Members of Congress and congressional staff is available here. As noted above, although this chart provides a high-level summary of the relevant restrictions, the application of these restrictions is highly fact-specific, and employers are well-advised to seek the advice of experienced counsel both before making an offer to a new employee and whenever questions regarding these restrictions arise.
State and Local Revolving-Door Restrictions
In addition to the post-employment restrictions imposed on former federal employees, more than 40 states and many cities and counties have adopted some form of revolving-door legislation.
By and large, these state and local provisions target many of the same activities that are the subject of the federal provisions described above. For example, New York imposes broad prohibitions on former state officers and employees, restricting them from both appearing before their former agency or otherwise “receiv[ing] compensation for any services rendered” on behalf of another “in relation to any case, proceeding or application or other matter before such agency” for a period of two years. As under federal law, this two-year cooling-off period extends to a lifetime ban on matters with which the employee was “directly concerned and in which [employee] personally participated.”
Meanwhile, in Virginia, members of the General Assembly are subject to a one-year lobbying ban, while a similar ban extends to all former “public officers”—including heads of state agencies—in Georgia. Similar lobbying bans have been adopted by a number of major cities, with each city imposing unique limitations on the post-employment activities of former city employees and officials.
In light of the variety of revolving-door restrictions imposed by different state and local jurisdictions, as well as the idiosyncratic ways in which state and local restrictions may be interpreted by relevant regulators, companies should be mindful to review all potentially applicable restrictions before engaging individuals who may have served in state or local government.
Hiring Former Government Officials and Employees - Practice Tips
As emphasized above, the many federal, state, and local revolving-door provisions present a particular challenge to companies that hire former government employees. While each employment search and potential hire is unique, below are some basic steps employers can take to avoid getting stuck in the revolving door.
Pre-Negotiation: Before approaching a potential hire, employers should:
- Maintain written conflicts-of-interest policies and recusal processes and ensure that the human resources department and other key decision-makers are trained and familiar with these guidelines;
- Review the job description and assess the likelihood that the position’s duties may involve interacting with government or providing behind-the-scenes support for the employer’s dealings with government, thereby potentially triggering revolving-door rules;
- Require applicants to disclose their prior government employment and job responsibilities;
- Consider whether current government employees will be required to disclose the employment negotiation or recuse themselves from any matters in which the new employer has an interest pursuant to congressional ethics rules or agency rules;
- Determine the various post-employment rules that will apply to the new prospective new hire, including the federal criminal provisions, congressional revolving-door rules, state and local rules, and agency-specific rules;
- Involve all relevant internal stakeholders in assessing whether the post-employment issues are a “deal-breaker,” including the prospective employee’s supervisors. Sometimes, the prospective hire’s duties can be cabined off successfully for a period, while permitting the new employee to still make valuable contributions to the organization. Occasionally, however, the revolving-door restrictions will be so constraining that the supervisor may determine that the candidate would be unable to successfully function and decide to withdraw the candidate’s name from further consideration; and
- Engage with counsel, as needed.
During Negotiation: Where appropriate, prospective employers should work proactively with the employee’s Designated Agency Ethics Official (“DAEO”) or other ethics staff to identify potential areas of concern and restrictions that may apply to the potential new hire.
Many federal agencies have promulgated their own regulations implementing statutory revolving-door restrictions. In addition, the views of ethics officials in different agencies may vary with regard to the application of the post-employment restrictions to former employees within their agencies. Engaging the relevant ethics officials early in the hiring process often ensures that both the employee and potential employer understand how these regulations will apply to them and can address any ambiguities these regulations may present.
Post-Hiring: Employers should consider providing new employees subject to revolving-door restrictions written “dos and don’ts” guidance as soon as possible after they join the company. Although these former government employees frequently receive an “ethics letter” from their former government employer on their way out the door, these ethics letters are often generic and are not informed by the specific duties of the employee’s new role. Written guidance tailored to the new hire can help prevent problems before they arise and protect the company in the event a violation is alleged. This tailored guidance can also address areas that may be overlooked by the “ethics letter.” Lawyers, for example, may be subject to bar rule restrictions on their post-government employment activities that are broader than those imposed by 18 U.S.C. § 207. Further, as noted above, under current law, certain DOD officials and employees are required to seek written guidance describing how the agency’s post-employment restrictions apply to them.
New hires should also understand any ongoing confidentiality obligations that may prevent them from sharing non-public information they learned in connection with their government employment.
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Now more than ever, jurisdictions across the country are taking steps to slow the revolving door between government service and the private sector, and the perceived conflicts that arise therefrom. With these ever-increasing restrictions on the revolving door in mind, companies seeking to hire top-flight talent from the ranks of government must be especially careful to avoid getting caught in the spin.
If you have any questions concerning the material discussed in this client alert, please contact the members of our Election and Political Law practice.
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