[Federal Register: May 18, 2004 (Volume 69, Number 96)]
[Rules and Regulations]               
[Page 28041-28042]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18my04-1]                         


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Rules and Regulations
                                                Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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[[Page 28041]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 1

[Docket No. 03-030F]

 
Indemnification of Department of Agriculture Employees

AGENCY: Office of the Secretary, USDA.

ACTION: Statement of policy; final rule.

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SUMMARY: The Department of Agriculture is adding a new subpart to part 
1 of title 7 of the Code of Federal Regulations. This statement of 
policy is similar to the policy adopted by other Federal agencies, 
including the Department of Treasury, Department of the Interior, 
Department of Health and Human Services, and the Department of Justice 
in that it permits indemnification of Departmental employees in 
appropriate circumstances, as determined by the Secretary or the 
Secretary's designee, for claims made against them as a result of 
actions taken by them in the course of their employment.

DATES: Effective May 18, 2004.

FOR FURTHER INFORMATION CONTACT: Philip S. Derfler, Assistant 
Administrator, Office of Policy and Program Development, Food Safety 
and Inspection Service, U.S. Department of Agriculture, Room 350-E, 
Jamie L. Whitten Building, 1400 Independence Avenue, SW., Washington, 
DC 20250-3700, telephone (202) 720-2709, fax (202) 720-2025.

SUPPLEMENTARY INFORMATION:
    The United States Department of Agriculture (USDA) does not now 
have a policy to indemnify its employees who are sued in their 
individual capacity and who suffer an adverse judgment as a result of 
conduct taken within the scope of their official duties. Lawsuits 
against Federal employees in their personal capacities have 
proliferated since the Supreme Courts decision in Bivens v. Six Unkown 
Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). 
This decision held that personal damage awards against a Federal 
employee are permitted when, in the course of his or her employment, 
the Federal employee is found to have violated an individual's 
constitutional rights. Although the Federal Liability Reform and Tort 
Compensation Act of 1988, Public Law 100-694, prohibits personal 
actions against Federal employees for common law torts committed in the 
course of employment, that Act does not protect employees from all 
other types of actions, including those arising under the Constitution. 
A number of actions have been filed against USDA employees. While the 
majority of these claims have resulted in judgments adverse to the 
claimants, the prospect of personal liability and the burden of 
defending a suit for money damages, simply as a result of doing one's 
job, has had a negative effect on USDA operations.
    The Department believes that actions against Federal employees in 
their personal capacity may hinder the Department's effectiveness. 
Uncertainty as to what conduct may lead to a claim tends to intimidate 
employees and to stifle creativity and decisive action. Employees' 
fears of personal liability affect government operations, decision 
making, and policy determinations.
    The Department believes that lawsuits against Federal employees in 
their personal capacity may constitute an impediment to the effective 
conduct of the public's business. A clear articulation of the 
Department's policy to permit the indemnification of Department 
employees should go a long way toward removing this impediment.
    The USDA's policy is to permit, but not require, the 
indemnification of a Department employee who suffers an adverse 
verdict, judgment, or other monetary award, provided that the actions 
giving rise to the judgment were taken within the scope of his or her 
employment, and that such indemnification is in the interest of the 
United States, as determined by the Secretary or the Secretary's 
designee. Under the same conditions, the Department may also choose to 
indemnify an employee who enters into a final settlement or compromise 
of an adverse claim.
    Generally, the Department will not indemnify or pay to settle or 
compensate a personal damage claim against an employee before entry of 
an adverse verdict, judgment, or monetary award. However, in rare 
cases, the Secretary may determine that exceptional circumstances 
justify the earlier indemnification or payment of a settlement or 
compromise amount. This approach is designed to discourage claims 
against Department employees solely to pressure the Department into 
settlement. In the usual case, the Department will not compromise a 
matter before a final determination, even if a dispositive motion filed 
on behalf of the employee has been denied.
    Once a verdict, judgment, or monetary award has been entered 
against an employee or a settlement proposal entered into by an 
employee, a Department employee may request indemnification to satisfy 
that verdict, judgment, award or settlement proposal. The employee 
shall submit a written request, with appropriate documentation that 
includes a copy of the verdict, judgment, award or settlement proposal, 
to the head of his or her employing component. The head of the 
employee's employing component shall thereupon submit it to the General 
Counsel, in a timely manner, for a recommended disposition of the 
request. The Office of the General Counsel shall forward the employee's 
request, the employing component's recommendation, and the General 
Counsel's recommendation, along with the time frame in which a decision 
is needed, to the Secretary or his or her designee for decision. The 
Secretary or his or her designee will decide promptly whether to 
indemnify or pay for a settlement of a personal damage claim.

Administration Procedure Act

    This policy relates to the Department of Agriculture management and 
personnel. It is published in final form without the opportunity for 
public notice and comment because it is a statement of policy. See 5 
U.S.C. 553(b)(A).

Executive Order 12866 and the Regulatory Flexibility Act

    This policy has been determined to be not economically significant 
for the purposes of Executive Order 12866. It

[[Page 28042]]

will not have a significant economic effect on a substantial number of 
small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.).

Paperwork Requirements

    This policy is not subject to the Paperwork Reduction Act because 
it deals solely with internal rules governing Department of Agriculture 
personnel.

List of Subjects in 7 CFR Part 1

    Administrative practice and procedure, Indemnity payments, 
Government employees, Claims.

0
For the reasons stated in the preamble, title 7 part 1 of the Code of 
Federal Regulations is amended by adding subpart N to read as follows:

SUBPART N--POLICY WITH REGARD TO INDEMNIFICATION OF DEPARTMENT OF 
AGRICULTURE EMPLOYEES

    Authority: 5 U.S.C. 301.


Sec.  1.501  Policy on employee indemnification.

    (a) Indemnification, under the context of this section, shall be 
the policy whereby the Department of Agriculture compensates an 
employee for the legal consequences of conduct, taken within the scope 
of his or her employment, giving rise to a verdict, judgment, or other 
monetary award rendered against the employee.
    (b) The Department of Agriculture may indemnify a Department 
employee (which for the purposes of this regulation shall include a 
former employee) for any verdict, judgment, or other monetary award 
rendered against such employee, provided the Secretary or the 
Secretary's designee determines, in his or her discretion, that the 
conduct giving rise to such verdict, judgment, or award was taken 
within the scope of his or her employment with the Department, and such 
indemnification is in the interest of the United States.
    (c) The Department of Agriculture may pay for the settlement or 
compromise of a personal damage claim against a Department employee by 
the payment of available funds, at any time, provided that the 
Secretary or the Secretary's designee determines, in his or her 
discretion, that the alleged conduct giving rise to the personal damage 
claim was taken within the scope of the employee's employment, and such 
settlement or compromise is in the interest of the United States.
    (d) Absent exceptional circumstances, as determined by the 
Secretary or his or her designee, the Department will not entertain a 
request to agree to indemnify or pay for a settlement of a personal 
damage claim before entry of an adverse judgment, verdict, or other 
monetary award.
    (e) When a Department employee becomes aware that an action has 
been filed against the employee in his or her individual capacity as a 
result of conduct taken within the scope of his or her employment, the 
employee should immediately notify his or her supervisor that such an 
action is pending. The supervisor shall promptly thereafter notify the 
Office of the General Counsel.
    (f) A Department employee may request indemnification to satisfy a 
verdict, judgment, or monetary award entered against the employee or to 
satisfy the requirements of a settlement proposal. The employee shall 
submit a written request, with appropriate documentation that includes 
a copy of the verdict, judgment, award or settlement proposal, as 
appropriate, to the head of his or her employing component, who shall 
thereupon submit it to the General Counsel, in a timely manner, a 
recommended disposition of the request. The Office of the General 
Counsel shall seek the views of the Department of Justice. The Office 
of the General Counsel shall forward the employee's request, the 
employing component's recommendation, and the General Counsel's 
recommendation, along with the time frame in which a decision is 
needed, to the Secretary or his or her designee for decision. The 
Secretary or his or her designee will decide promptly whether to 
indemnify or pay for a settlement of a personal damage claim.
    (g) Any payment under this section to indemnify a Department 
employee for a personal damage verdict, judgment, or award or to settle 
a personal damage claim shall be contingent upon the availability of 
appropriated funds of the employing component of the United States 
Department of Agriculture.

Ann M. Veneman,
Secretary.
[FR Doc. 04-11051 Filed 5-17-04; 8:45 am]