- Prior Conflicting Outside Activity: There is a one-year 'cooling off' period following
an outside activity. If within the last year, an employee had an outside activity with an
entity (for example, as an employee, consultant, contractor), and the entity now seeks to
do business with the employee's agency, the employee requires an authorization under 5
CFR. 2635.502 before the employee can participate in that official business. See 5 CFR
2635.502(b)(iv).
If the prior employment with the outside entity occurred within the previous one year, the cooling off period is still in effect UNLESS the employee obtains a written authorization.
- Sale of a Conflicting Financial Asset: There is no cooling off period after a sale or other divestiture if the conflicting financial interest. Upon the sale or other divestiture of a
conflicting financial interest, the employee is NO LONGER PROHIBITED from participating in
a matter. See 5 CFR 2635.402(e).
REMINDER: A sale is not required if the total amount of stock held in all affected companies is $5,000 or less and the employee will act in a specific party matter (e.g., contract, grant). Likewise, a sale is not required if the total amount of stock in any one affected company is $25,000 (or $50,000 for all affected companies) and the employee will act in general matters (e.g., policy, regulations).
- Pre-employment Negotiation: Seeking employment constitutes a financial interest
covered by the criminal conflict of interest statute. An employee may not act officially
regarding the entity with which the employee is seeking employment UNLESS the employee has
obtained a waiver under 18 U.S.C. 208. A cooling off period does not remedy the criminal
conflict of interest. See 5 CFR 2635.402(b)(2)(v).
If seeking employment results in an employment agreement, the employee needs another waiver under 18 U.S.C. 208 to act officially regarding the entity.
REMINDER: The standard for granting such a waiver is that the "employee's financial interest is not so substantial as to be deemed likely to affect the integrity" of the employee's services. The appointing official must decide whether an agreement for a new job (usually on the outside with higher compensation than the employee's current Government salary) can be considered "not so substantial." See 5 CFR 2635.606(a). In addition, waivers may be granted only by the NIH Director, with concurrence from the HHS DAEO or the DAEO's designee.
If seeking employment results in no offer made or the offer is rejected, the employee may receive an authorization under 5 C.F.R. 2635.502 to act officially regarding the entity with which the employee was seeking employment. If all the factors for obtaining an authorization are met, the employee may begin acting officially regarding the entity as soon as the authorization is obtained.
If all the factors for an authorization are not met, the employee may be subject to a period of disqualification.
The length of such a period of disqualification is not specified in the OGE Standards of Ethical Conduct. It is advisable to consider the facts and circumstances of each situation, rather than have a standard cooling off period (e.g., 3 months, 6 months). The cooling off period is within the agency's discretion and is based upon whether a reasonable person would, in view of the negotiations, question whether an employee could act impartially towards the entity the employee had negotiated with. The reasonable person's view should be balanced with the interest of the Government in the employee's participation.
- with an authorization -- no cooling off period;
- without an authorization-- discretionary cooling off period.
- with an authorization -- no cooling off period;
- Official Duty and Outside Activity With the Same Entity: An NIH employee completes an official duty
activity with Company X and now seeks to do an outside activity with Company X.
For example, the NIH employee worked with
a pharmaceutical company on a CRADA. The CRADA ended and the employee seeks permission to engage in an
outside activity with the same company.
REMINDER: The pre-employment negotiation rules apply if the employee begins seeking the outside activity during the CRADA or other official duty activity.
If the employee is expected again to work officially with the outside entity, even if the outside activity is completed by the time that work resumes, it creates an appearance that the employee has used his or her official position to obtain compensated outside business opportunities and a further appearance that the employee is using public office for private gains. See 5 CFR 2635.802(b), Example 2.
If it is not expected that the employee will again work officially with the outside entity, the outside activity may be approvable.
If the employee is permitted to engage in the outside work, the employee will be disqualified from acting officially on all matters affecting the outside company. If this disqualification is from matters which are central to the employee's performance of his or her official duties, the outside activity is not approvable, regardless of any cooling off period.
REMINDER: Employees are prohibited from engaging in outside activities that conflict with their official duties.
- Receipt of Awards: The cooling off period starts on the date the employee receives notice of the award, unless the emloyee rejects it immediatetly. For awards which require the employee to obtain permission to accept the associated gifts using the form NIH-2854 Request for Approval to Accept Gifts Associated with an Award from an Outside Organization, the recusal period ends one year after the date the award is presented. See information on the request form, on the forms page.
- Honorary Degrees: The cooling period starts on the date the employee receives notice that the honorary degree will be conferred, unless the employee immediately rejects the offer. The recusal ends on the date the honorary degree is conferred. See information on the request form, on the forms page.
- Receipt of Severance Pay: An employee who has received an extraordinary (over $10,000) severance or other payment from a former employer prior to entering Government service is subject to a two year period of disqualification. See 5 CFR 2635.503. two year cooling off period for extraordinary severance or other payment.
For additional information, contact your IC's Ethics Officials (see links below).
Updated: 1/22/13
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