[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 [www.gpo.gov]
[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, [email protected], 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

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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