Federal employees are often subject to strict guidelines regarding outside employment, particularly when it comes to maintaining a security clearance. While outside employment can be an important source of income and professional development, it can also present significant risks for 
federal employees, especially those holding sensitive positions. Engaging in certain types of outside employment or business activities may raise concerns regarding conflicts of interest, loyalty, or national security, potentially leading to disciplinary action or even the loss of security clearance.
The Risks of Outside Employment for Federal Employees
Outside employment can present risks to federal employees, particularly those holding security clearances. When engaging in outside work, federal employees must ensure that their activities do not conflict with their primary duties, create ethical concerns, or jeopardize their security clearance. Several factors can raise red flags when it comes to outside employment, including:
- Conflict of Interest
A conflict of interest arises when an employee’s outside employment interferes with their official duties or compromises their impartiality in performing government work. For example, if a federal employee works for a private company that does business with the government or competes with their agency, it may create a situation where the employee’s judgment could be compromised. The Standards of Ethical Conduct for Employees of the Executive Branch (5 C.F.R. Part 2635) set forth by the Office of Government Ethics (OGE) prohibit federal employees from participating in matters where they have a financial interest or outside employment that conflicts with their official duties. Concerns in this area can lead to both security clearance and disciplinary concerns.
- National Security Concerns
For employees holding a security clearance, outside employment in areas related to national security, foreign governments, or private entities with sensitive business interests may raise national security concerns. This is particularly relevant for employees working in defense, intelligence, or law enforcement. For example:
- Foreign Influence: If an employee holds outside employment with a foreign government or company, there may be concerns about the employee’s loyalty to the U.S. government, and whether they could be influenced or coerced by foreign entities.
- Exposure to Sensitive Information: Federal employees working in jobs that involve classified information must be cautious about inadvertently sharing sensitive details with outside employers, even in unrelated fields.
- Foreign Financial Interests: Employees with outside business ventures in countries that may pose a national security risk could be perceived as vulnerable to exploitation or bribery.
- Time and Commitment Conflicts
Another concern for federal employees engaging in outside employment is whether it interferes with their primary duties. Federal employees are generally expected to devote their full attention to their government responsibilities, and outside employment that interferes with their job performance may lead to disciplinary action. For employees with security clearances, any appearance of negligence or divided loyalty can be problematic.
The Security Clearance Review Process: How Outside Employment Is Considered
Outisde employment can come up during the security clearance process at various times such as when an initial application for a clearance is submitted, during a reinvestigation, or based on the notification of a concern regarding outside employment by an Agency.
When determining whether a federal employee’s outside employment activities will affect their security clearance, the government looks at several factors. The Adjudicative Guidelines for Determining Eligibility for Access to Classified Information provide a framework for evaluating the security risks associated with outside activities. There are several security guidelines that may be at issue based on outside employment. Specifically, the guidelines under Guideline B (Foreign Influence), Guideline E (Personal Conduct), and Guideline L (Outside Activities) all may pose an issue for a clearance holder engaged in outside employment.
Factors Considered in the Security Clearance Process:
- Financial Interests: Whether the outside employment involves financial interests that conflict with the employee’s government position or present a risk of bribery or exploitation.
- Foreign Connections: Any financial, business, or familial connections to foreign governments or entities that could pose a conflict of interest or lead to susceptibility to foreign influence.
- Proper Disclosure: A failure to properly disclose outside employment to an Agency and during the clearance process can lead to security concerns about the outside activity and the individual’s integrity and trustworthiness. Proactive disclosure of such information can be afforded mitigating value during a security review of such outside employment.
Steps Federal Employees Can Take to Protect Their Security Clearance
Federal employees must be proactive when it comes to outside employment and take steps to ensure their security clearance remains intact. Here are some best practices for navigating outside employment without jeopardizing your security clearance:
- Seek Approval from Your Agency
Before engaging in outside employment, federal employees must often seek prior approval from their agency’s ethics office or security office. Many agencies require employees to submit a Request for Approval of Outside Employment (often as part of an annual financial disclosure process) to ensure there are no conflicts of interest or security concerns. Agencies may approve or deny outside employment based on the potential risks to national security or other ethical considerations.
Even if the outside job seems unrelated to the employee’s government duties, it is important to disclose it to avoid later complications. This step ensures transparency and can protect the employee if their outside employment is ever questioned.
- Review Agency Guidelines and Ethics Rules
Employees should familiarize themselves with their agency’s policies on outside employment. Federal agencies often have specific guidelines that govern permissible outside activities and require employees to adhere to ethical conduct standards. Understanding these rules can help prevent inadvertent violations that may affect their clearance.
- Avoid Conflicts of Interest
Federal employees must avoid engaging in outside employment that could create a conflict of interest with their official duties. This includes working for companies that do business with the government, having financial interests in entities that are regulated by the employee’s agency, or accepting positions that could impair the employee’s impartiality. Employees should also be cautious when engaging in business ventures or outside employment in industries that could pose national security risks, such as defense contracting or intelligence.
- Consider Consulting Legal Counsel
Given the complexity of rules surrounding outside employment and security clearances, it may be wise for federal employees to seek legal counsel before accepting outside employment. An attorney with experience in federal employment law or security clearance law can offer guidance on potential risks, assist with disclosure processes, and help craft a strategy to address any concerns raised by outside activities.
Other Consequences of Violating Outside Employment Rules
Failing to comply with agency guidelines regarding outside employment can lead to other severe consequences beyond security clearance actions. The most likely other consequence would be disciplinary action, including suspension, demotion, or termination, depending on the severity of the violation. While outside employment can provide federal employees with valuable opportunities, it comes with inherent risks, especially for those holding security clearances. Federal employees must be vigilant and aware of the potential for conflicts of interest and national security concerns. By seeking approval for outside employment, adhering to ethical guidelines, and consulting with legal counsel when necessary, federal employees can reduce the likelihood of disciplinary action and protect their security clearance from being jeopardized.
Contact Us
Berry & Berry, PLLC advises and represents individuals on issues involving the proper completion and submission of security clearance applications, background investigations, security clearance denials and revocations, and federal employee disciplinary matters. Please contact the firm at (703) 668-0070 or www.berrylegal.com to schedule an initial consultation with an experienced attorney who is familiar with the security clearance and disciplinary process.
