Security Clearances and Weekend Entrepreneurs

Security Clearance

Perhaps the aspect of being an attorney that I appreciate most is the ability to hang out my own shingle and control my professional destiny – even if that means working twice as many hours as I would elsewhere. Incidentally, that is the old adage about entrepreneurs: they’re the only people in the world who will work 80 hours a week to avoid working 40.

Many of the security clearance holders I encounter in my practice share the same spirit. Most haven’t taken the leap to full-time entrepreneur – a risky move with a family and/or a mortgage – but instead they find a “side hustle” to satisfy their entrepreneurial spirit or simply make extra cash. Common examples I see are driving for ride-share services like Uber, re-selling items on e-Bay or Amazon, consulting, or selling handmade wares on websites like Etsy.

If this sounds like you, I applaud your hard work and self-motivation. However, there are a few things to keep in mind in order to avoid problems with your day job:

  • READ THE FINE PRINT in your employment contract. Federal employees, and many in the private sector, are required by their employers to seek pre-approval of any outside employment activities. The purpose of this is to ensure that the outside activity is compatible with the employer’s public relations interests (i.e. will not cause the employer embarrassment) and to ensure that the outside activity does not conflict in any manner with the employer’s objectives (e.g. consulting for a rival business).


  • TALK WITH YOUR AGENCY or employer’s ethics official and request written authorization of your proposed outside activity. Not only will this protect you in the event that your employer later has a change of heart, it will also allow you to better understand your employer’s concerns and how to avoid running afoul of expectations.


  • INVESTIGATE ANY LICENSING REQUIREMENTS that may be in place as a result of state or local legislation. For example, many jurisdictions require home-based businesses to be licensed and meet certain zoning requirements. Other jurisdictions may require occupational licenses and/or insurance for your chosen activity – particularly for personal services such as massage, barbering, etc.



  • REMEMBER THAT UNCLE SAM always gets his due. Entrepreneurs are required to keep track of their expenses and earnings and report those each year on their income tax returns. Depending on how you structure your business (a topic outside the scope of this article), you may need to report the income on different “schedules” accompanying your tax return. You may also be liable for payment of self-employment taxes.


  • DRAW A FIRM LINE between your business and your employer’s when it comes to working hours. Don’t risk an allegation of time-card fraud by working on your “side hustle” while on the clock for your employer. I’ve seen it happen many times, and it rarely ends well.

Entrepreneurship can be an incredibly fun and rewarding endeavor, even if pursued on only a part-time basis. For security clearance holders, however, extra due-diligence may be necessary to ensure that the entrepreneurial activity doesn’t inadvertently cause the loss of a primary source of income. Proceed with caution and be sure to seek out professional advice from a lawyer or accountant when necessary.



This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation. 

Security Clearance Attorney Sean M. Bigley represents clients worldwide in security clearance denials and revocations. He is a former investigator for the U.S. Office of Personnel Management. For more information, please visit