Rule2022-19322
Employee Indemnification Regulations
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 7, 2022
Effective
November 7, 2022
Issuing agencies
Corporation for National and Community Service
Abstract
The Corporation for National and Community Service (operating as AmeriCorps), is finalizing regulations to indemnify AmeriCorps employees who, because of conduct taken within the scope of employment with AmeriCorps, have a verdict, judgment, monetary award, or personal damages claim issued against them that is not otherwise covered by the Federal Tort Claims Act. These regulations set out how AmeriCorps employees may request indemnification or settlement of a claim and the circumstances in which AmeriCorps may approve indemnification or settlement of a claim.
Full Text
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<title>Federal Register, Volume 87 Issue 172 (Wednesday, September 7, 2022)</title>
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[Federal Register Volume 87, Number 172 (Wednesday, September 7, 2022)]
[Rules and Regulations]
[Pages 54626-54629]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-19322]
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CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
45 CFR Part 2502
RIN 3045-AA77
Employee Indemnification Regulations
AGENCY: Corporation for National and Community Service.
ACTION: Final rule.
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SUMMARY: The Corporation for National and Community Service (operating
as AmeriCorps), is finalizing regulations to indemnify AmeriCorps
employees who, because of conduct taken within the scope of employment
with AmeriCorps, have a verdict, judgment, monetary award, or personal
damages claim issued against them that is not otherwise covered by the
Federal Tort Claims Act. These regulations set out how AmeriCorps
employees may request indemnification or settlement of a claim and the
circumstances in which AmeriCorps may approve indemnification or
settlement of a claim.
DATES: Effective November 7, 2022.
FOR FURTHER INFORMATION CONTACT: Kiara Rhodes, Associate General
[[Page 54627]]
Counsel, Corporation for National and Community Service, 250 E Street
SW, Washington, DC 20525, <a href="/cdn-cgi/l/email-protection#6c3c190e00050f2f0301010902181f2c0f021f420b031a"><span class="__cf_email__" data-cfemail="6a3a1f08060309290507070f041e192a090419440d051c">[email protected]</span></a>, 202-606-6709.
SUPPLEMENTARY INFORMATION:
I. Background
This rule addresses indemnification of AmeriCorps employees in
circumstances not covered by the Federal Employee Liability Reform and
Tort Compensation Act of 1988 (FELRTCA), 28 U.S.C. 2679(b)(1), or the
Federal Tort Claims Act (FTCA), 28 U.S.C. 1346(b). FELRTCA provides
that, with certain exceptions, the FTCA is the exclusive remedy for
injuries caused by a Federal employee acting in the scope of
employment, such that the United States must be substituted as the
defendant and the claim must proceed against the Government under the
FTCA. See 28 U.S.C. 2679(b)(1). The exceptions, for which substitution
is not available, are claims brought for a violation of the
Constitution and claims authorized by and brought for a violation of a
Federal statute. See 28 U.S.C. 2679(b)(2). In these claims, the
individual is sued in their personal capacity. For instance, lawsuits
against Federal employees in their personal capacities for alleged
constitutional violations are available under certain circumstances
since the Supreme Court's decision in Bivens v. Six Unknown Named
Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). The
Bivens decision was the first time that the Supreme Court recognized an
implied cause of action directly under the Constitution for personal-
capacity claims for alleged constitutional violations. In rare
circumstances, even a State or common law claim might be brought
against a Federal employee for whom the United States has formally
substituted itself, but for which a court rejected substitution, and in
these cases too, the individual could be liable in their personal
capacity.
AmeriCorps believes that actions against its employees in their
personal capacities and the potential for a judgment against agency
employees may hinder the agency's effectiveness in meeting its mission.
AmeriCorps employees' ability to carry out functions related to
volunteer management and grant-making depends on the willingness of the
employees to make decisions and take actions that may expose them to
liability. Uncertainty regarding the potential for a personal liability
claim resulting in monetary judgment may intimidate employees, stifle
creativity and initiative, and limit decisive action. The threat of
personal liability for a decision made or action taken as part of
official duties can adversely affect AmeriCorps' achievement of its
mission. The adoption of these regulations permitting indemnification
would afford AmeriCorps employees the same protection given to Federal
employees in several other government agencies, including the Federal
Trade Commission, Agency for International Development, Commodity
Futures Trading Commission, Department of Commerce, Department of
Education, Department of Health and Human Services, Department of the
Interior, and the Department of Justice.
This final rule would address these situations when an AmeriCorps
employee is sued in their personal capacity for conduct performed in
the scope of their employment, by providing the process for AmeriCorps
employees to request indemnification or settlement of a claim and the
circumstances in which AmeriCorps may approve indemnification or
settlement of a claim.
II. Development of This Rule
AmeriCorps proposed this rule on May 26, 2022. See 87 FR 31967.
AmeriCorps received one comment during the public comment period.
First, the commenter stated that the rule would create a lack of access
to justice.
Response: The rule has no effect on any person's access to justice.
Nothing in the rule would prevent or deter an individual from raising a
claim against a current or former AmeriCorps employee or from obtaining
a judgment against them.
The commenter also stated that a focus should be on preventing
employees from overstepping their bounds rather than indemnifying them,
and that the rule would embolden federal employees in committing
injustices because they will be indemnified and undermine public trust.
Response: The rule does not provide employees with the ability or
authority to act illegally or outside the scope of their employment.
Federal employees face a number of consequences, including but not
limited to termination and other legal action, that prevent them from
``overstepping their bounds'' and committing injustices. Neither does
the rule guarantee indemnification of employees; rather, it establishes
a process for employees and former employees to seek indemnification
for claims against them personally for conduct giving rise to the
claims that was taken within the scope of their employment with
AmeriCorps. The ultimate decision as to whether indemnification is
appropriate is left to the AmeriCorps Chief Executive Officer.
Finally, the commenter states that the rule is extremely broad in
that it would indemnify former employees and allow AmeriCorps to decide
whether to indemnify in its sole discretion.
Inclusion of former AmeriCorps employees in the rule is necessary
because a lawsuit may be brought against an individual related to
actions conducted in the scope of their employment with AmeriCorps,
even though AmeriCorps may no longer employ that individual. The final
rule therefore continues to include former employees in its scope. The
final rule also includes the provision stating that AmeriCorps will
decide in its sole discretion whether to indemnify an individual. This
provision is not overly broad because it includes criteria upon which
AmeriCorps will base this decision (namely, that the AmeriCorps
employee's conduct giving rise to the verdict, judgment, monetary
award, or claim was taken within the scope of their employment; that
the indemnification or settlement is in AmeriCorps' best interest; and
that appropriated funds are available for the indemnification or
settlement). See Sec. 2502.40. It is appropriate for AmeriCorps'
determination as to whether these criteria are met to be within
AmeriCorps' sole discretion because determination of whether the
indemnification is in the agency's best interest is subjective and
therefore necessarily non-reviewable.
AmeriCorps did not make any edits to the proposed rule as a result
of the comment.
III. Scope and Summary of the Final Rule
The rule would allow AmeriCorps to indemnify a present or former
AmeriCorps employee who is personally named as a defendant in a legal
proceeding for conduct arising within the scope of their employment
when the FTCA does not apply because (1) the claim alleges the conduct
is a violation of the Constitution; or (2) the claim alleges a
violation of a Federal statute that authorizes the claim; or (3) the
claim is brought under State or common law against a Federal employee
for whom the United States has formally substituted itself, but for
which a court rejected substitution. The regulations would permit
AmeriCorps to indemnify an Agency employee who suffers an adverse
verdict, judgment, or other monetary award, provided that the
[[Page 54628]]
actions giving rise to the judgment were taken within the scope of
employment, and that AmeriCorps determines that the indemnification is
in its interest. The regulations would also allow AmeriCorps to settle
a claim brought against an employee in their individual capacity by the
payment of funds, upon a similar determination. Generally, AmeriCorps
will not entertain a request to indemnify a personal damage claim
against an employee before entry of an adverse verdict, judgment, or
monetary award. However, in certain cases, AmeriCorps may determine
that exceptional circumstances justify the earlier indemnification or
payment of a settlement amount. The rule would provide procedures for
present or former AmeriCorps employees to follow if they are personally
named in these types of lawsuits and wish to be indemnified, and also
would provide procedures for AmeriCorps' review of requests for
indemnification.
IV. Regulatory Analyses
A. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
The Office of Information and Regulatory Affairs in the Office of
Management and Budget has determined that this is not a significant
regulatory action.
B. Congressional Review Act (Small Business Regulatory Enforcement
Fairness Act of 1996, Title II, Subtitle E)
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, AmeriCorps will submit
for an interim or final rule a report to each chamber of the Congress
and to the Comptroller General of the United States. A major rule
cannot take effect until 60 days after it is published in the Federal
Register. The Office of Information and Regulatory Affairs in the
Office of Management and Budget anticipates that this will not be a
major rule under 5 U.S.C. 804 because this rule will not result in (1)
an annual effect on the economy of $100 million or more; (2) a major
increase in costs or prices for consumers, individual industries,
Federal, state, or local government agencies, or geographic regions; or
(3) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.
C. Regulatory Flexibility Act
As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 601
et seq.), AmeriCorps certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
Therefore, AmeriCorps has not performed the initial regulatory
flexibility analysis that is required under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.) for rules that are expected to have such
results.
D. Unfunded Mandates Reform Act of 1995
For purposes of Title II of the Unfunded Mandates Reform Act of
1995, 2 U.S.C. 1531-1538, as well as Executive Order 12875, this
regulatory action does not contain any Federal mandate that may result
in increased expenditures in either Federal, State, local, or Tribal
governments in the aggregate, or impose an annual burden exceeding $100
million on the private sector.
E. Paperwork Reduction Act (PRA)
Under the PRA, an agency may not conduct or sponsor a collection of
information unless the collections of information display valid control
numbers. This rule does not contain information collection requirements
within the meaning of the Paperwork Reduction Act, 44 U.S.C. 3501-3520.
F. Executive Order 13132, Federalism
Executive Order 13132, Federalism, prohibits an agency from
publishing any rule that has federalism implications if the rule
imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive order. This rule does not have any
federalism implications, as described above.
G. Takings (E.O. 12630)
This rule does not affect a taking of private property or otherwise
have taking implications under Executive Order 12630 because this rule
does not affect individual property rights protected by the Fifth
Amendment or involve a compensable ``taking.'' A takings implication
assessment is not required.
H. Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of Executive Order 12988.
Specifically, this rule: (a) meets the criteria of section 3(a)
requiring that all regulations be reviewed to eliminate errors and
ambiguity and be written to minimize litigation; and (b) meets the
criteria of section 3(b)(2) requiring that all regulations be written
in clear language and contain clear legal standards.
I. Consultation With Indian Tribes (E.O. 13175)
AmeriCorps recognizes the inherent sovereignty of Indian Tribes and
their right to self-governance. We have evaluated this rule under the
AmeriCorps consultation policy and the criteria in E.O. 13175 and
determined that this rule does not impose substantial direct effects on
federally recognized Tribes.
List of Subjects in 45 CFR Part 2502
Administrative practice and procedure, Government employees,
Indemnity payments.
For the reasons discussed in the preamble, under the authority of
42 U.S.C. 12651c(c), the Corporation for National and Community Service
amends chapter XXV of title 45 of the Code of Federal Regulations by
adding part 2502 to read as follows:
PART 2502--EMPLOYEE INDEMNIFICATION REGULATIONS
Sec.
2502.10 Purpose.
2502.20 Applicability.
2502.30 Definitions.
2502.40 Under what circumstances may AmeriCorps indemnify employees?
2502.50 At what point in a legal proceeding will AmeriCorps consider
a request to indemnify the employee?
2502.60 What types of legal proceedings may an AmeriCorps employee
seek indemnification or settlement for?
2502.70 What must an AmeriCorps employee do if served with process
or pleadings in a legal proceeding?
2502.80 What may the General Counsel do upon receipt of the process
and pleadings and report of circumstances?
2502.90 How may an AmeriCorps employee request indemnification?
2502.100 How will AmeriCorps handle the request for indemnification?
Authority: 28 U.S.C. 2679(b)(1); 42 U.S.C. 12651c(c).
Sec. 2502.10 Purpose.
The purpose of this part is to provide the procedures for
indemnification of
[[Page 54629]]
AmeriCorps employees who are personally named in certain legal
proceedings not covered by the Federal Tort Claims Act (FTCA) or the
Federal Employee Liability Reform and Tort Compensation Act (FELRTCA)
when AmeriCorps determines both that the actions arose within the scope
of their AmeriCorps employment and that indemnification is in the
agency's interest. These determinations are matters of agency
discretion.
Sec. 2502.20 Applicability.
(a) This part is applicable to all former and current AmeriCorps
employees, including special Government employees.
(b) This part does not apply to volunteers, service members,
contractors, or any other individuals who may be affiliated with
AmeriCorps, but not employed by the agency.
Sec. 2502.30 Definitions.
AmeriCorps means the Corporation for National and Community
Service.
AmeriCorps employee means a current or former employee of the
Corporation for National and Community Service, regardless of whether
the individual was an employee before the Corporation for National and
Community Service began operating under the name AmeriCorps.
CEO means the AmeriCorps Chief Executive Officer or their designee.
Covered claim means a claim seeking damages against an employee
personally (or against their estate) for personal injury, death, or
loss of property, resulting from the employee's activities, when
AmeriCorps determines both that the actions arose within the scope of
their office or employment but are not covered by the Federal Tort
Claims Act (FTCA) or the Federal Employee Liability Reform and Tort
Compensation Act (FELRTCA).
General Counsel means the AmeriCorps General Counsel or their
designee.
Sec. 2502.40 Under what circumstances may AmeriCorps indemnify
employees?
AmeriCorps may, at its sole discretion, indemnify an AmeriCorps
employee for a verdict, judgment, or other monetary award rendered
against the employee personally in a claim or may settle or compromise
a personal damages claim against an AmeriCorps employee if:
(a) The CEO determines that the AmeriCorps employee's conduct
giving rise to the verdict, judgment, monetary award, or claim was
taken within the scope of their employment;
(b) The CEO determines that the indemnification or settlement is in
AmeriCorps' best interest; and
(c) AmeriCorps appropriated funds are available for the
indemnification or settlement.
Sec. 2502.50 At what point in a legal proceeding will AmeriCorps
consider a request to indemnify the employee?
(a) AmeriCorps may settle or compromise a claim against an
AmeriCorps employee at any time.
(b) Unless there are exceptional circumstances, as determined by
the CEO, AmeriCorps will not consider a request to indemnify a claim
before entry of an adverse verdict, judgment, or award.
Sec. 2502.60 What types of legal proceedings may an AmeriCorps
employee seek indemnification or settlement for?
An AmeriCorps employee may seek indemnification or settlement in
any civil action or proceeding brought, in any court, for a covered
claim.
Sec. 2502.70 What must an AmeriCorps employee do if served with
process or pleadings that includes a covered claim?
An AmeriCorps employee who is named as a defendant (or the personal
representative of the AmeriCorps employee's estate) in a legal
proceeding that includes a covered claim and who wishes to seek
indemnification must promptly notify their supervisor, who then
promptly notifies the Office of General Counsel. Former employees must
directly notify the Office of General Counsel.
Sec. 2502.80 What may the General Counsel do upon receipt of the
process and pleadings and report of circumstances?
Where appropriate, the General Counsel may request that the
Department of Justice provide legal representation for the AmeriCorps
employee.
Sec. 2502.90 How may an AmeriCorps employee request indemnification?
To request indemnification for a verdict, judgment, award, or
settlement proposal of a covered claim, the AmeriCorps employee must:
(a) Have complied with the requirements of Sec. 2502.70.
(b) Submit a written request, via their supervisor, to the head of
the employee's office, or (in the case a former employee) directly to
the Office of General Counsel. The written request must include
appropriate documentation, including copies of the verdict, judgment,
award, or settlement proposal.
Sec. 2502.100 How will AmeriCorps handle the request for
indemnification?
(a) The head of the office or their designee will review the
employee's request and submit all of the following to the General
Counsel:
(1) The original or a copy of the employee's request.
(2) A recommendation to approve or deny the request.
(3) A detailed analysis of the basis for a recommendation.
(4) A certification from the Chief Financial Officer as to whether
the agency has funds available to pay the indemnification.
(b) The General Counsel will:
(1) Review the circumstances of the incident that gave rise to the
action or proceeding, and all data relevant to the question of whether
the employee was acting within the scope of their employment.
(2) Where appropriate, seek the views of the U.S. Department of
Justice and/or the U.S. Attorney for the district encompassing the
location where the action or proceeding is brought.
(3) Prepare a recommendation to approve or deny the request.
(4) Forward the request, the accompanying documentation, and the
General Counsel's recommendation to the CEO for a decision.
Dated: August 22, 2022.
Fernando Laguarda,
General Counsel.
[FR Doc. 2022-19322 Filed 9-6-22; 8:45 am]
BILLING CODE 6050-28-P
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