In FY2026 the Defense Counterintelligence and Security Agency bills a non-DoD agency $5,890 for the Tier 5 investigation behind a Top Secret clearance and $455 for a Tier 3. Not your invoice: under the National Industrial Security Program the government customer pays. It is the unit cost of manufacturing a clearance, which a crossover hire skips.

Is there a federal rule against hiring a competitor’s cleared employee?

No, not for a competitor’s employee. Four narrower questions govern: what the person may carry, what you may agree with their employer, whether the clearance travels, and what the incumbent’s contracts say.

Start with the most misquoted rule. FAR 9.505 says an unfair competitive advantage exists where a contractor possesses “(1) Proprietary information that was obtained from a Government official without proper authorization; or (2) Source selection information … not available to all competitors.” Neither is “we hired their people.” The adjacent sentence cuts the other way: conflicts “may arise in situations not expressly covered in this section 9.505,” which is discretion, not a hiring rule. To claim a crossover hire creates an organizational conflict of interest under FAR 9.5, tie it to a named ground or to the Procurement Integrity Act.

The Defend Trade Secrets Act lets a court enjoin threatened misappropriation but bars an order that would “prevent a person from entering into an employment relationship,” and requires conditions on that employment to rest “on evidence of threatened misappropriation and not merely on the information the person knows.” That is 18 U.S.C. 1836(b)(3)(A)(i)(I), which binds what a federal court may order in a DTSA case; clause (II) preserves state law restraining a lawful trade, so a state covenant is a separate question, below.

One statute does bar a hire, and not the competitor kind. 41 U.S.C. 2104(a) stops a former federal official from taking pay from a contractor for a year after serving, on a contract over $10,000,000 awarded to that contractor, as procuring contracting officer, source selection authority, evaluation board member or team chief, program or deputy program manager, or administrative contracting officer. Subsection (b) exempts an affiliate producing different products. The company is exposed too: 2104(d)(2) reaches a contractor paying such an official knowing the acceptance is unlawful, and 2103(c)(2) a bidder opening employment talks with an official who has not recused. Ask where the candidate sat.

Why is a crossover hire cheaper than sponsoring one?

The expensive part is already paid for. Making a clearance cost the government $5,890 at Tier 5 in FY2026; keeping one costs $91.80 a year.

DCSA’s Federal Investigations Notice 24-01 sets those FY2026 rates, a 10 percent rise on FY2025. The FY2027 increase it signalled was withdrawn: FIN 25-03, dated August 31, 2025, says process improvements “enabled us to maintain FY 2026 rates,” and prices FY2027 Tier 5 and Tier 3 at $5,890 and $455 again. No cost window is closing. Continuous vetting with adjudication costs DoD $7.65 a month. Neither lands on the employer, whose real spend is time-to-fill, agency fees and idle bench.

The calendar is the real premium. In FY2026 Q2 the Performance Accountability Council put the fastest 90 percent of Secret investigations at 44 days and Top Secret at 57. That is the investigation phase only, on a basis that discards the slowest tenth of cases, and not offer letter to badge: end-to-end sat at 205 days for High Risk positions and 92 for Moderate Risk at FY2026 Q1, against targets of 75 and 40. Those are position-risk designations, not clearance levels, and quoting the two spans together is how a 57-day promise becomes a seven-month bench.

GAO-26-107100, published December 2025, found 86 percent of the timeliness statistics it analyzed inaccurate, affecting 95 percent of clearances completed governmentwide. Agency officials told GAO they revised the method from FY2025 onward; GAO’s window was FY2024 submissions, so it did not test that. What GAO did establish is that figures published from 2020 through 2024 understated the true wait, so any comparison with a pre-2025 figure crosses two methods.

What is the new hire not allowed to bring?

Non-public proposal material, not knowledge. The Procurement Integrity Act binds any person, but only for material submitted or prepared for an evaluation and still non-public.

41 U.S.C. 2102(b) says “a person shall not knowingly obtain contractor bid or proposal information or source selection information before the award” of the related contract. Both terms are gated. Section 2101(2) reaches cost or pricing data and “indirect costs and direct labor rates” only where the information was “submitted to a Federal agency as part of, or in connection with, a bid or proposal” and “previously has not been made available to the public.” Section 2101(7) is the same shape: ten categories “prepared for use by a Federal agency to evaluate a bid or proposal” and still non-public. A wrap rate your new hire carries in their head, never submitted or already public, is not the statutory category. Screen for the document and the timing, not the knowledge.

Violating section 2102 for competitive advantage draws a fine, up to five years’ imprisonment, or both. Civil exposure runs to $50,000 per violation for an individual and $500,000 for an organization, each plus twice the compensation received or offered. Those are the statutory amounts as codified; federal civil penalties are inflation-adjusted annually, so today’s maximum is higher. An agency may also cancel the procurement or open debarment.

Where does the criminal risk in cleared recruiting actually sit?

In the agreement with your competitor, not in the hire. DOJ and the FTC treat agreements not to recruit, solicit or hire workers as criminal antitrust risks.

The Antitrust Guidelines for Business Activities Affecting Workers, revised January 2025, say such agreements “may expose companies and executives to criminal liability.” Footnote 11 is the govcon sentence: a no-poach agreement includes “an agreement to request permission from the other company before trying to hire an employee.” What that reaches is the standing understanding that teammates clear approaches with each other first. One unilateral courtesy call is not an agreement; a mutual expectation that both sides will make one is. Such an agreement “need not be explicit or written down” and is “illegal even if they are never carried out.”

Three qualifications, because a one-sided risk list is useless. These are agency guidance: footnote 1 says the document “should not be construed as legal advice, and it has no force or effect of law.” The FTC adopted it 3-2, the dissenting commissioner now chairs the agency, and it stands with no withdrawal notice as of July 2026. Footnote 15 concedes that a restraint “subordinate and collateral to a broader business collaboration … and reasonably necessary” to its procompetitive potential may get an effects analysis rather than per se condemnation. And DOJ’s own prosecution on these facts failed: six aerospace executives indicted in December 2021 over a supplier hiring conspiracy were all acquitted, per a note DOJ added to its release. DOJ will charge this in the defense supply chain. There, it lost.

Does the clearance travel with the candidate?

Usually. Under 32 CFR 117.10(h) a prior investigation of adequate scope “will be used without further investigation or adjudication unless the CSA becomes aware of significant derogatory information that was not previously adjudicated.” SEAD 7 lists seven exceptions.

Verification is a database check under SEAD 7, not a call to the competitor, and the 2018 directive names superseded systems, so use the systems in use today. Two exceptions bite hardest: E.2.f removes reciprocity where eligibility “was granted on a temporary (interim), limited, or one-time basis,” so an interim clearance is not a portable clearance. E.2.g covers eligibility currently denied, revoked or suspended, and rewards exact reading: “absent the presence of mitigating factors or other reasons,” individuals “found to be ineligible” should stay out of national security duty “for a minimum of one year from the date of a denial or revocation.” That is a mitigable default running from a denial or revocation, not a fixed bar on everyone suspended. Footnote 3 excludes the state most crossover candidates arrive in: administrative termination for a change of need-to-know, departure from a sensitive position, or no longer being affiliated with the government is not a loss of eligibility; 32 CFR 117.10(i) agrees. Debriefed is not denied. E.2.c covers an adjudication recorded with an exception, E.2.b an investigation over seven years old, though periodic reinvestigations have all but ended under Trusted Workforce 2.0.

Three NISPOM paragraphs govern your side. 117.10(a)(7) bars requests for people “who are not their employees or consultants”; 117.10(a)(5) bars using requests “to establish a cache of cleared employees.” The pre-employment head start at 117.10(f) is the express exception to the first, applies at any tier, and opens with a gate checklists drop: only where “a potential employee requires access to classified information immediately upon commencement of employment.” Then the conditions: a written commitment for employment, written acceptance, a start within 45 days of eligibility, and under (f)(3) compliance with the no-cache rule. A verbal offer starts nothing; neither does a role where access can wait. And 117.10(j)(2) bars access for someone who lost eligibility during a break in employment, which changes when the hire can start billing.

Can the incumbent employer stop the move?

It depends on the state. Non-compete enforceability varies across the cleared market; the NDA and reporting duty travel everywhere. The federal right of first refusal is gone.

The FTC’s Non-Compete Clause Rule is dead: vacated in Ryan, LLC v. FTC and removed from 16 CFR part 910 effective February 12, 2026. Enforceability is state law again, and states differ sharply. Virginia, one example and not the rule: Va. Code 40.1-28.7:8 bars entering into or enforcing a non-compete with a “low-wage employee,” which now includes anyone “who, regardless of his average weekly earnings, is entitled to overtime compensation” under the FLSA. Note the limit: a salaried engineer exempt from overtime is reached only by the separate earnings test, so the ban covers less of a senior cleared workforce than it appears. Subsection H preserves NDAs over trade secrets, and the money differs by forum: the federal DTSA allows exemplary damages up to twice the compensatory award (18 U.S.C. 1836(b)(3)(C)), while Virginia’s own act caps punitive damages at twice the award “or $350,000 whichever amount is less” (Va. Code 59.1-338(B)). Check the candidate’s state, not ours.

Expect a report, too. Under 32 CFR 117.8(c)(1) the duty to report adverse information survives the employee’s termination, and the rule cites Becker v. Philco (4th Cir. 1967): a contractor is generally not liable in defamation for required reports. The claim on the job itself is gone: Executive Order 14055 was revoked on January 20, 2025 by Executive Order 14148, and DOL rescinded 29 CFR part 9 effective December 22, 2025, noting that because the FAR Council never wrote the implementing clause the rule “effectively never became applicable.”

What survives is narrower than it reads. 41 U.S.C. 6707(c)(1) says that on a successor contract for substantially the same services you may not pay a service employee less than the predecessor contract would have. DOL’s rule makes that a collective-bargaining rule: under 29 CFR 4.163(a) the successor’s “sole obligation is to insure that all service employees are paid no less than the wages and fringe benefits … under the predecessor’s collective bargaining agreement,” and 4.163(b) limits the self-executing duty to a successor in the predecessor’s locality. Without a predecessor CBA, the ordinary case on cleared services work, there is no predecessor-pay floor at all; you pay the applicable wage determination. Section 6707(c)(2) switches it off entirely on a Secretary’s finding, after a hearing, that predecessor wages are “substantially at variance” with those prevailing locally. It is a union-successorship wage floor, not a right to the job, and it governs re-badging after a recompete, not ordinary poaching.

When is a job board the wrong tool for this hire?

When the target is a named person on a named program who is not looking. Boards, ours included, reach people already deciding to move.

We run ClearedJobs.NET, so discount this accordingly. A posting broadcasts to self-identified seekers, and it is the weakest channel here, where you want the one architect who owns the customer relationship. That person is not reading postings. Reaching them is referral work and recruiters who hold the relationship; our comparison of which channels actually reach clearance holders covers ones we do not own. One caveat: we found no published statistic for how often cleared employees change contractors. If someone quotes you one, ask for the source.

Frequently Asked Questions

Is it illegal to hire an employee away from a company we team with?

The hire is not. Agreeing with that company not to recruit each other’s people is where DOJ and the FTC locate criminal exposure; their January 2025 guidance calls a standing permission-first arrangement a no-poach agreement.

How fast can a crossover hire get into access?

If eligibility is current and adequately scoped and no SEAD 7 exception applies, 32 CFR 117.10(h) uses the prior investigation, leaving a database check plus CSA and customer action. Sponsoring means the 57-day investigation phase plus everything around it: 205 days end-to-end at FY2026 Q1.

Can we start the investigation before the first day?

Yes. 32 CFR 117.10(f) is the express exception to (a)(7)’s bar on submitting for non-employees, which in any case permits consultants. It applies where the person needs access immediately on commencing employment, then requires a written commitment for employment, written acceptance, a start within 45 days of eligibility, and compliance with (a)(5).

What if the candidate has a gap in employment?

Ask whether the gap cost them eligibility. If it did, 32 CFR 117.10(j)(2) bars access without a new CSA determination, whatever the old badge said. The seeker-side mechanics of moving a clearance to a new contractor are worth a read.

The practical read for 2026

The gap crossover exploits is closing at the investigation phase, nowhere else. DCSA’s case inventory fell from roughly 246,000 in FY2024 Q3 to about 101,000 in FY2026 Q2, and the PAC expects end-to-end times to fall substantially as reporting catches up. Against that, the last solidly reported quarter still shows 205 days end-to-end against a 75-day target. Our read, not the PAC’s: until a reported quarter puts end-to-end near the phase number, the already-cleared candidate keeps a premium.

Build the discipline now. Write down what your recruiters may and may not say to a prime about its people, and take counsel before touching any standing “check with them first” clause in your teaming templates, since footnote 15’s ancillary-restraint analysis may protect it. Then add two questions to the first crossover screen: is the eligibility current, full and unbroken, or interim, excepted or lapsed; and is the candidate coming from a competitor or from the government. None of this is legal advice; the wrong call carries criminal antitrust and Procurement Integrity Act exposure, so make it with counsel.