On October 15, Pennsylvania’s legislature sent House Bill 201 to Governor Tom Corbett for signature.  The legislation would prohibit a government employee from evaluating bids for state contracts submitted by his or her former employer for two years.

This legislation is interesting for a few reasons.  First, it is a twist on what are commonly known as “revolving door” restrictions.  Typically, revolving door restrictions limit the activities of former governmental officials.  For example, former government officials often may not advocate on behalf of their new employer in front of their former agencies or regarding matters in which they participated as a government official.  Many jurisdictions also impose restrictions based on financial interests.

Pennsylvania’s legislation is different in that it applies to new government employees who left the private sector, because it focuses specifically on state contracts, and because it is a straightforward ban on participation in evaluating proposals regardless of financial interest.

The restriction would also be harsher and would last twice as long as similar restrictions at the federal level that may require the recusal of a government employee from a matter involving a company at which the employee worked within the prior year.

Employers should keep an eye out for “reverse revolving door” rules of this kind, which are likely to sprout up in other states and localities.  When a company official leaves for public service, the company often seeks to determine whether the former employee’s new government position will impact operations.  Sometimes, compensation packages can be reconfigured or declined in order to avoid conflicts of interest down the road (for example, the federal executive branch has complex restrictions regarding government employees who have continuing financial interests in their former employers).  Pennsylvania’s law would effectively make that impossible.  The mere fact that an employee-employer relationship used to exist would be enough to mandate recusal.