Let’s face it: we live in a litigious society. Spill some hot coffee? Sue McDonald’s. Slip on your sidewalk? Sue the city. At the end of the day, the only people who usually walk away as winners are the lawyers. And, believe me – I know how much the general public loves us.
Perhaps no one understands the litigation climate better than employers, many of whom cite legal exposure as one of the issues that keep them awake at night. Of particular concern are labor and employment law matters. With the enormous amount of federal, state, and even local regulations to understand – not to mention the complexity of actually implementing them – it is no wonder that employers tread cautiously in this area. Cleared federal contractors are no exception.
While federal contractors share most of the same concerns as other private sector employers, they do have one significant additional issue with which to contend: employee security clearances. I frequently receive questions like, “can I legally refuse to hire candidates without a security clearance?” Here is the quick and dirty:
Federal Contractors Can Make Security Clearance a Condition of Employment
Whether you choose to limit your hiring only to those who already hold a clearance or are willing to consider sponsoring un-cleared applicants through the process, you are legally entitled to reject applicants who either do not have or cannot obtain a security clearance.
There are, however, some potential landmines to avoid. To start, the clearance should be what the law terms a “business necessity,” meaning that the contractor’s customer (i.e. the federal government) requires that the employee have a security clearance in order to perform their work functions.
Secondly, if you are willing to sponsor applicants through the process, you need to be willing to accept the time and cost involved and wait for an actual security clearance denial before rescinding a conditional offer of employment. Too many federal contractors are following bad advice from human resources officials and attempting to “pre-clear” applicants as a hedge against lost time and costs incurred sponsoring applicants who will ultimately be denied clearance. Playing the game this way opens the employer up to claims of discrimination (i.e. that the employer was using the “pre-clearance” process as a means of obtaining information about applicants that it would otherwise be prohibited from collecting).
For example, asking about criminal history – even though relevant to a security clearance – runs afoul of certain state laws prohibiting such conduct. Although the security clearance process trumps state law via the Constitution’s Supremacy Clause, only the federal government gets that protection. Absent a crystal ball or guidance from a Security Clearance Attorney that the applicant is categorically barred from receiving a clearance, federal contractors are on weak legal ground by doing “pre-clearances.” For more on this issue, see my article Pre-Employment Screening, Clearability, and The Opportunity for Litigation.
What About Employees Who Lose Their Security Clearance?
Employers have two options here: retain the employee in a non-cleared role (if any) or terminate the relationship. Assuming maintenance of a clearance is a business necessity, the employer is most likely on safe legal ground with either solution. But watch out for situations where the employee’s loss of security clearance is the result of employment misconduct. Nothing makes a bitter and lawsuit-happy person like the trifecta of adverse employment action, loss of security clearance, and termination of employment.
Of course, this is not to say that employers should not take adverse action against employees who legitimately cause problems. (Remember, you have a duty as a cleared contractor to report employee conduct that could warrant security concerns). My suggestion is simply to make very sure that you maintain an indisputable paper trail and consider offering the employee a small severance in exchange for signing a waiver of any potential legal claims. Such an approach is generally worth the cost in avoiding future headaches.
Advertising for Job Vacancies
Finally, federal contractors should understand that advertising solely to a cleared applicant pool – for example, on ClearanceJobs.com – is perfectly legal and a great way to avoid problems like those discussed above. Generally, applicants who have successfully maintained a security clearance previously are both more cost-effective and less of a risk to hire. And, after all, what savvy employer doesn’t like avoiding cost and risk?
This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation.
