Which of the following activities is prohibited during the cooling off period?

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The phrase "revolving door" describes the practice of public officials or employees abandoning public service for lobbying positions. Prohibitions on this practice, often referred to as mandatory "cooling-off" or "waiting" periods, forbid individuals from engaging in lobbying activities for a period of time after leaving public service.

Ethics laws in most states set mandatory waiting periods before a public official or employee may register as a lobbyist or engage in lobbying activities. The length of these terms generally vary between six months to two years. For legislators, some states start the clock on the cooling-off period as soon as an individual leaves public service, while others begin at the end of a session or the end of the session for which a legislator was elected to serve. Florida will have the longest cooling off period at six years, set to take effect on December 31, 2022.

Some revolving door laws provide for unique exceptions or nuances. For example, some states exempt lobbying on behalf of an agency or other governmental entity. Restrictions may or may not apply, depending upon the jurisdiction, to uncompensated lobbying or unpaid lobbying with expenses reimbursed. A few states prohibit legislators from representing others before the legislature or agencies if personally involved in the formation of related legislation.

The following table provides the statutory provisions relating to mandatory cooling-off periods for each state's legislators, including D.C., the Virgin Islands, Guam and Puerto Rico. Some provisions may be more broadly applicable, such as for public appointees or employees of the legislative or executive branches. However, the table is intended to be comprehensive for state legislators only.

This table is intended to provide general information and does not necessarily address all aspects of this topic. Because the facts of each situation may vary, this information may need to be supplemented by consulting legal advisors. All content is up to date through 08/24/2021.

A ""Cooling Off" period is the time during which an employee is disqualified (recused) from participation in all official matters involving an entity because of a particular situation, for example, a prior employer. Various scenarios have different cooling off period requirements, as explained in the following paragraphs.

1. 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.

2. 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).

3. 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.
      
4. 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.

   Which of the following activities are prohibited during the cooling off?

   During the cooling off period, an offer or sale of the issue is prohibited. Accepting an order, confirming a certain amount of the issue, or accepting a check from a customer are all considered to be "sales" and are prohibited until registration is effective.

   Which of the following would be allowed during the cooling off period?

   Which of the following would be allowed during the cooling off period? No selling or soliciting is allowed during the cooling off period. Distributing a red herring (a preliminary prospectus) is allowed.

   Which of the following are not exempt from the filing requirements of the Securities Act of 1933?

   Listed stocks, and stock options are non-exempt issues that must be registered with the SEC.

   Which of the following activities are allowed prior to the filing of the registration statement?

   Which of the following activities are allowed prior to the filing of the registration statement? Prior to the filing of the registration statement, nothing can be done. Once the registration statement is filed, a preliminary prospectus may be used to obtain indications of interest.