When high level federal employees face potential discipline

The need for vigorous legal advocacy is certain for a high-level federal officer or employee accused of misconduct.

Federal employees are subject to a labyrinth of rules and regulations that dictate what behavior is problematic or banned because of the jobs they hold. Restrictions on federal workers apply to virtually all positions and to employees with any length of service. Even those in senior positions must follow their agency codes of conduct as well as with applicable laws and rules.

Seeking legal counsel should be a priority for a manager or director at the first sign that anyone is questioning their adherence to rules of behavior.

While disciplinary action can be taken against any employee – and it is no small matter for anyone – a federal manager, director, supervisor, executive or senior executive services (SES) employee could suffer significant loss, considering salary, perks, reputation, years of service, impact on career, retirement and other benefits.

A recent example

Since 2016, Neel Kashkari has been the president and CEO of the Federal Reserve Bank of Minneapolis. Currently, in 2023, he is a voting member of the central bank’s Federal Open Market Committee (FOMC) in Washington, responsible for monetary policies impacting open markets. His biography contains a long list of major accomplishments both in the private and public sectors, including a stint as an assistant secretary at the U.S. Department of the Treasury and work as an aerospace engineer.

According to the Star Tribune, at least as early as 2019 Kashkari collaborated with NFL legend and former Minnesota Supreme Court Justice Alan Page on a proposed Minnesota state constitutional amendment to equalize education in the state among all children regardless of race or income. The two actively promoted the idea. The effort to close the “academic achievement gap” reportedly had broad support among diverse Minnesotans.

As of this writing in July 2023, the website of the Federal Reserve Bank of Minneapolis still has a page about the proposal. It also details the bank’s research about the disparity in educational outcomes among Minnesota children as well as positive impacts of similar amendments adopted in other states. The bank ties this educational research to a federal economic mandate that it work to support full employment.

Amending the state constitution would have required legislative and then voter approval. The proposal never made it through the legislative process. Instead, things took a different turn.

Ethical issues with political activity

We have written about federal employee restrictions and prohibitions on political activity. Federal laws like the Hatch Act and associated regulations as well as codes of conduct applicable within each agency-employer workplace set out in detail the limits of what employees in various agencies, positions and levels may do politically.

One broad theme is that workers may not use their government employment to influence elections. On this basis, vocal, prominent critics decried Kashkari’s public promotion of the proposal as violative of this and other restrictions on political activity. Former U.S. Sen. Pat Toomey, R-Pa., conducted a public opposition campaign against Kashkari’s efforts for the amendment, calling it “political lobbying efforts that are well beyond the Federal Reserve’s mandate” in an April 2022 letter on the letterhead and website of the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

Less than a year later, the Star Tribune reported in Feb. 2023 that the Minneapolis regional bank’s code of conduct had been updated with a change mandated by the Federal Reserve’s Board of Governors. Namely, this language was added, “An employee may not use, or create the appearance of using, their position or bank resources to influence a partisan or non-partisan election or ballot initiative, such as a referendum or constitutional amendment.”

Takeaways

We do not know if there was internal pressure on Kashkari or if any investigative or disciplinary steps were even taken in this matter, but the situation serves as a cautionary tale for leaders within the federal government workforce. Anyone in leadership in a federal agency or department concerned that their professional behavior is under scrutiny should seek immediate consultation with an experienced lawyer. A variety of remedies may be available ranging from informal negotiation to legal action.