New Rules Regarding Government Employees Seeking Post-Government Employment

The Federal Government Ethics Office issued revised rules last week related to employees of the Executive Branch seeking other non-Federal employment. These new rules are certainly not controversial or difficult to understand and apply. They fall into the common sense category of regulations. In fact, when the Ethics Officer released it proposed rules back in February, no one bothered to respond.

The new rules contain a "recusal" requirement that applies to employees when seeking non-Federal employment with persons whose financial interests would be directly and predictably affected by particular matters in which the employees participate personally and substantially.

An employee may not participate personally and substantially in any particular matter that, to the employee's knowledge, will have a direct and predictable effect on the financial interests of a person with whom the employee is negotiating or has any arrangement concerning prospective employment.

The new rules also address issues of lack of impartiality that require recusal from particular matters affecting the financial interests of a prospective employer when an employee's actions in seeking employment fall short of actual employment negotiations. Additionally, it addresses both actual conflicts of interest and appearances of conflicts of interest. The "appearance" factor more than the "actual" is the thing that trips up a lot of unsuspecting Government employees seeking post-Government employment.

One thing to note here is that these rules apply to all Executive Branch employees, not just senior executives or a subset of employees that, for example, engages in procurement activities.

Government employees must, of course, be cognizant of these and other ethics rules. Contractors should also be familiar with them if considering employment of any current or recently separated Government employee. Although a prospective employer is unlikely to bear any direct consequences if a recruit runs afoul of these regulations, there are a lot of hidden costs related to extricating or untangling from a poor decision.