WASHINGTON, D.C. (NextGov) — The Justice Department issued an opinion last week authorizing the Trump administration’s plan to allow employees from tech companies to work for the federal government while remaining employed by their companies and keeping their not-yet-vested company stocks.
The administration will be onboarding managers from twenty-plus companies — including Anduril, Microsoft, Nvidia, OpenAI, Palantir and xAI — as part of its U.S. Tech Force program, launched last year to recruit early-career engineers after the administration pushed over 20,000 technologists out of their government posts last year.
The setup is an unusual one. Federal employees are subject to ethics rules meant to ensure that they work for the public interest.
The Office of Personnel Management now has DOJ’s blessing to allow individuals joining the Tech Force to keep their restricted stock units that haven’t yet vested — company stocks issued with a vesting plan that dictates when employees get full ownership of them — while they work for the government on a leave of absence from their private sector employer.
Ethics experts and public sector lawyers told Nextgov/FCW that they are skeptical about the arrangement.
“Why are we replacing a workforce we already had with individuals who may still be beholden to an outside employer?” asked Cynthia Brown, the senior ethics counsel at the nonprofit watchdog organization Citizens for Responsibility and Ethics in Washington. It “raises a lot of very serious concerns.”
It’s unclear exactly how many people will join the government on a leave of absence as part of the Tech Force. It’s likely that the DOJ decision will be primarily used for the 100-plus managers being recruited from tech companies partnering with the government, rather than for the class of early-career employees, an OPM spokesperson told Nextgov/FCW.
“This opinion from the Department of Justice provides much-needed clarity on the treatment of deferred compensation and strengthens the federal government’s ability to recruit top talent from the private sector to complete stints of government service,” the spokesperson said in a statement.
The statute addressed by DOJ in its opinion generally bans federal employees from receiving outside compensation for their government service.
OPM had to decide how to address this, given the ubiquity of deferred compensation packages like vested stock in the private sector. Essentially, the question was if those wanting to work for the government have to give them up, or restructure them so as to not run afoul of the law, Kevin Hennecken, a senior advisor at OPM, wrote in a recent blog about the DOJ decision.
Typically, employees forfeit their unvested, restricted stock units when they leave their employer.
OPM’s director, Scott Kupor, has described the Tech Force program as a way to show that people don’t need to spend their entire careers in either the private or public sector and to allow flexibility for people to move between them.
This outside compensation ethics law was OPM’s “most recent strike” to clear the way for that movement between the two, wrote Hennecken, previewing that OPM will be leveraging the flexibility to create other programs to bring in additional private-sector talent for terms of service.
But the Tech Force raises other conflict of interest concerns beyond the compensation statute addressed in the recent memo.
“I think it’s a dangerous path for the government to take,” Michael Fallings, managing partner at Tully Rinckey law firm, told Nextgov/FCW, noting that it’s hard to opine on the setup without the employees in place, at which point “ethical issues could arise that aren’t even foreseen.”
“Who is that employee more loyal to” if they’re technically still employed by a tech company and the government at the same time, he asked.
In the recent opinion, DOJ only briefly touches on the federal financial conflicts of interest statute, which prohibits government employees from participating in official matters where they have a financial interest — such as matters that have an effect on their stocks or employer.
