One of the lesser known aspects of security clearance law is the availability of reimbursement for denied, revoked, or suspended security clearance applicants who are subsequently granted a clearance. You read that correctly: If your clearance was denied, revoked, or suspended, then subsequently granted/reinstated, you may be entitled to cold, hard cash as compensation.
But before you get too excited, understand this: The process is stacked against you by design. Here’s why – and what you need to know if you’re still seeing Benjamins.
Does This Apply to Me?
As a threshold matter, the availability of reimbursement is a function of Department of Defense Directive 5220.6. The policies contained therein cover DoD contractors (private industry), but also contractors for the following federal agencies by reciprocity:
- The Departments of Agriculture, Commerce, Interior, Justice, Labor, State, Transportation, and Treasury;
- Environmental Protection Agency;
- Federal Emergency Management Agency;
- Federal Reserve System;
- General Accounting Office;
- General Services Administration;
- NASA;
- National Science Foundation;
- Small Business Administration;
- United States Arms Control and Disarmament Agency;
- United States Information Agency;
- United States International Trade Commission;
- Office of the United States Trade Representative
Thus, if you are a contractor for an intelligence community agency – or one of any number of agencies not listed here – you are most likely out of luck.
Makin’ It Rain
If your customer agency is covered by DoD Directive 5220.6, the next step is to determine whether you actually have a case. To do that, you must demonstrate by clear and convincing evidence all of the following conditions:
- The suspension, denial, or revocation was the primary cause of the claimed pecuniary loss; and
- The suspension, denial, or revocation was due to gross negligence of the Department of Defense at the time the action was taken, and not in any way because of your failure or refusal to cooperate; and
- You were ultimately granted a security clearance.
You’ll need to file your petition with the Defense Office of Hearings and Appeals (DOHA) under oath or affirmation within 1 year after the date your security clearance is granted, and attach a copy of the favorable decision. I strongly recommend that any applicant considering filing seek representation from a competent Security Clearance Attorney.
A Reality Check
As with anything in the law, even if you are covered by Directive 5220.6 and potentially eligible to submit a petition for reimbursement, there are some caveats of which you should be aware. To start, consider the text of the Directive itself
“The amount of reimbursement shall not exceed the difference between the earnings of the applicant at the time of the suspension, revocation, or denial and the applicant’s interim earnings, and further shall be subject to reasonable efforts on the part of the applicant to mitigate any loss of earnings. No reimbursement shall be allowed for any period of undue delay resulting from the applicant’s acts or failure to act. Reimbursement is not authorized for loss of merit raises and general increases, loss of employment opportunities, counsel’s fees, or other costs relating to proceedings under this Directive.” (E3.1.45)
Second, any payment made in response to a claim for reimbursement will be considered full satisfaction of any further claim against the government or any of its officers or employees. Thus, although it is highly unlikely that an applicant would have any parallel (and/or more lucrative) claim against the government, you need to understand that you are effectively waiving your right to sue by submitting a petition for reimbursement.
Finally, a bit of perspective from this author: My law firm handles hundreds of security clearance cases per year involving seemingly every issue imaginable. In all of those cases, we have encountered precisely one (1) which we feel affords a reasonable case for reimbursement. That case is pending a hearing, so it remains to be seen if the applicant ultimately is granted his clearance. The moral of the story? You may have a better shot at riches with a lottery ticket
This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation.
