[Federal Register Volume 60, Number 109 (Wednesday, June 7, 1995)]
[Rules and Regulations]
[Pages 29987-29988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13838]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF STATE

22 CFR Part 21

[Pub. Not. 2210]


Office of the Legal Adviser; Indemnification of Department of 
State Employees

AGENCY: Department of State.

ACTION: Final rule and statement of policy.

-----------------------------------------------------------------------

SUMMARY: This statement announces a Department of State policy to 
permit payment of Department funds to indemnify Department employees 
who suffer adverse money judgments as a result of acts within the scope 
of their employment and to settle personal damages claims involving 
such acts, as determined by the Under Secretary for Management or his 
or her designee. This rule is similar to regulations adopted by other 
Federal agencies, including the Department of Justice (28 CFR part 50), 
the Department of the Treasury (31 CFR part 3) and the Agency for 
International Development (22 CFR part 207).

EFFECTIVE DATE: June 7, 1995.

FOR FURTHER INFORMATION CONTACT:Jean Bailly, Attorney-Adviser, Office 
of the Assistant Legal Adviser for Legislation and Management, U.S. 
Department of State, (202) 647-5154.

SUPPLEMENTARY INFORMATION: Lawsuits against federal employees in their 
individual capacities have proliferated since the 1971 Supreme Court 
decision in Bivens v. Six Unknown Named Agents of the Federal Bureau of 
Narcotics, 403 U.S. 388. These suits personally attack officials at all 
levels of government and target many federal activities, particularly 
law enforcement. The Federal Liability Reform and Tort Compensation Act 
of 1988, Public Law 100-694, permits substitution of the Government in 
many personal liability tort suits against officials. However, 
substitution is not possible in some cases, notably claims arising 
under the Constitution and claims arising under foreign law. Although 
the Department has had few such cases, the risk of personal liability 
and the burden of defending suits for money damages is clearly present 
for Department employees. An adverse judgment in such a case has 
detrimental consequences to the employee, both monetary and otherwise. 
Fear of personal liability also has potentially adverse consequences 
for State Department operations, decisionmaking, and policy 
determinations. The prospect of personal liability, and even the 
uncertainty as to what conduct may result in a lawsuit against an 
employee personally, may tend to intimidate employees and stifle 
initiative and decisive action.
    The Department believes a policy with respect to indemnification in 
such cases will serve to minimize this impediment to Department 
operations and would accord Department employees the same protection 
now enjoyed by most state and local government employees as well as 
those of most corporate employers. This policy is supported by the 
general principle that an agency has the authority to expend 
appropriated funds to further the mission of the agency and the 
objectives underlying the appropriation. Pursuant to this principle, 
the Department of State believes that indemnification is related both 
to the Department's mission and to the objectives underlying its 
general appropriations.
    The indemnification policy will permit, but does not require, the 
Department to indemnify a Department employee who faces an adverse 
verdict, judgment or other monetary award, provided that the actions 
giving rise to the judgment were taken within the scope of employment 
and that such indemnification is in the interest of the United States, 
as determined by the Under Secretary for Management or his or her 
designee.
    Absent exceptional circumstances, the Department will not agree 
either to indemnify or to settle a case before entry of an adverse 
judgment. This approach is intended to discourage the filing of 
lawsuits against federal employees in their individual capacities 
solely in order to pressure the Government into settlement. In the 
usual case, the Department will not settle a case before trial and 
judgment merely because a dispositive motion filed on behalf of the 
employee has been denied.
    Personal services contractors are considered employees for purposes 
of this policy. This policy is applicable to any actions pending 
against Department employees as of its effective date.
    In addition to the general indemnification provisions contained in 
these proposed regulations, the Department will follow its more 
specific indemnification policy with respect to damages awarded against 
Department health care personnel for malpractice claims within the 
scope of 22 U.S.C. 2702. The Department anticipates publishing 
regulations relating to this policy of indemnification.
Paperwork Reduction Act

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

Cost/Regulatory Analysis

    Because this rule relates solely to agency management and 
personnel, it is not subject to the notice and delayed effective date 
provisions of the Administrative Procedure Act (5 U.S.C. 553). It is 
likewise exempt from the procedures of E.O. 12866 (Regulatory Planning 
and Review). Because no notice of proposed rulemaking is required for 
this rule, the provisions of the Regulatory Flexibility Act (5 U.S.C. 
601-612) do not apply.

List of Subjects in 22 CFR Part 21

    Administrative practice and procedure, Government employees, Tort 
claims.

     [[Page 29988]] Accordingly, 22 CFR is hereby amended by adding a 
new part 21 as follows:

PART 21--INDEMNIFICATION OF EMPLOYEES

    Authority: 5 U.S.C. 301; 22 U.S.C. 2658.


Sec. 21.1.  Policy.

    (a) The Department of State may indemnify an employee for any 
verdict, judgment, or other monetary award which is rendered against 
such employee, provided that the conduct giving rise to the verdict, 
judgment, or award was taken within the scope of employment and that 
such indemnification is in the interest of the United States, as 
determined as a matter of discretion by the Under Secretary for 
Management or his or her designee.
    (b) The Department of State may settle or compromise a personal 
damages claim against an employee by the payment of available funds at 
any time, provided the alleged conduct giving rise to the personal 
damages claim was taken within the scope of employment and that such 
settlement or compromise is in the interest of the United States, as 
determined as a matter of discretion by the Under Secretary for 
Management or his or her designee.
    (c) The Director General of the Foreign Service and Director of 
Personnel (``Director General'') shall be the designee of the Under 
Secretary for Management with respect to determinations under 
paragraphs (a) and (b) of this section in cases which involve:
    (1) Foreign courts or foreign administrative bodies and
    (2) Requests of less than five thousand dollars.
    (d) Absent exceptional circumstances as determined by the Under 
Secretary for Management or his or her designee, the Department will 
not entertain a request either to agree to indemnify or to settle a 
personal damages claim before entry of an adverse verdict, judgment, or 
award.
    (e) When an employee in the United States becomes aware that an 
action has been filed against the employee in his or her personal 
capacity as a result of conduct taken within the scope of his or her 
employment, the employee shall immediately notify the Department 
through the Executive Director of the Office of the Legal Adviser that 
such an action is pending. Employees overseas shall notify their 
Administrative Counselor who shall then notify the Assistant Legal 
Adviser for Special Functional Problems. Employees may be authorized to 
receive legal representation by the Department of Justice in accordance 
with 28 CFR 50.15.
    (f) The employee may thereafter request indemnification to satisfy 
a verdict, judgment, or award entered against the employee. The 
employee shall submit a written request, with appropriate documentation 
including copies of the verdict, judgment, award, or settlement 
proposal if on appeal, to the Legal Adviser. Except as provided in 
paragraph (g) of this section, the Legal Adviser and the Director 
General shall then, in coordination with the Bureau of Finance and 
Management Policy, forward the request with their recommendation to the 
Under Secretary for Management for decision. The Legal Adviser may seek 
the views of the Department of Justice, as appropriate, in preparing 
this recommendation.
    (g) Cases in which the Director General is the designee under 
paragraph (c) of this section may be forwarded by the Assistant Legal 
Adviser for Special Functional Problems, along with the views of the 
employee and the bureau or post as appropriate, to the Director General 
for decision.
    (h) Personal services contractors of the Department are considered 
employees for purposes of the policy set forth in this part.
    (i) Any payment under this part either to indemnify a Department of 
State employee or to settle a personal damages claim shall be 
contingent upon the availability of appropriated funds.
    (j) In addition to the indemnification provisions contained in the 
regulations in this part, the Department will also follow any specific 
policies or regulations adopted with respect to damages awarded against 
Department health care personnel for malpractice claims within the 
scope of 22 U.S.C. 2702.

    Dated: May 5, 1995.
Richard M. Moose,
Under Secretary for Management.
[FR Doc. 95-13838 Filed 6-6-95; 8:45 am]
BILLING CODE 4710-08-M