82 FR 30966 - Indemnification of Federal Trade Commission Employees

FEDERAL TRADE COMMISSION

Federal Register Volume 82, Issue 127 (July 5, 2017)

Page Range		30966-30967
FR Document		2017-14008

The Federal Trade Commission is publishing a policy that permits indemnification of FTC employees in appropriate circumstances, as determined by the Commission or the Commission's designee, for claims made against them as a result of actions taken by them in the scope of their employment.

Federal Register, Volume 82 Issue 127 (Wednesday, July 5, 2017)

[Federal Register Volume 82, Number 127 (Wednesday, July 5, 2017)]
[Rules and Regulations]
[Pages 30966-30967]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14008]



[[Page 30966]]

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FEDERAL TRADE COMMISSION

16 CFR Part 1


Indemnification of Federal Trade Commission Employees

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Final rule.

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

SUMMARY: The Federal Trade Commission is publishing a policy that 
permits indemnification of FTC employees in appropriate circumstances, 
as determined by the Commission or the Commission's designee, for 
claims made against them as a result of actions taken by them in the 
scope of their employment.

DATES: These amendments are effective July 5, 2017.

FOR FURTHER INFORMATION CONTACT: David C. Shonka, Acting General 
Counsel, (202) 326-2222, Office of the General Counsel, Federal Trade 
Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Presently, the FTC does not have a policy to 
indemnify its employees who are sued in their individual capacities and 
who suffer an adverse judgment as a result of conduct taken within the 
scope of their employment; nor does the FTC have a policy to settle 
these claims with agency funds. Lawsuits against federal employees in 
their personal capacities have proliferated since the Supreme Court's 
decision in Bivens v. Six Unknown 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 while acting within the scope of their employment, that Act 
does not apply to suits against federal employees for violation of the 
Constitution or federal statutes.
    The FTC believes that actions against its employees in their 
personal capacities and the potential for a judgment against agency 
employees hinder the agency's effectiveness as a law enforcement 
agency. The FTC's ability to effectively protect consumers and promote 
competition depends upon the willingness of its employees to pursue 
investigations and litigation. Uncertainty regarding what conduct may 
lead to a personal liability claim resulting in a monetary judgment 
tends to intimidate employees, stifle creativity and initiative, and 
limit decisive action. Thus, the threat of personal liability against 
an employee for a decision made or action taken as part of official 
duties can adversely affect the FTC's achievement of its mission. The 
adoption of a policy to permit indemnification would help alleviate 
these problems and afford FTC employees the same protection now given 
to other federal employees in several other government agencies, 
including the 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.
    The FTC's policy permits, but does not require, the agency to 
indemnify a FTC 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 employment, and that such 
indemnification is in the interest of the FTC, as determined by the 
Commission or the Commission's designee. The policy also allows the 
agency to settle a claim brought against an employee in his or her 
individual capacity by the payment of funds, upon a similar 
determination by the Commission or the Commission's designee. 
Generally, the FTC will not entertain a request either to indemnify or 
to pay to settle a personal damage claim against an employee before 
entry of an adverse verdict, judgment, or monetary award. However, in 
certain cases, the Commission or its designee, may determine that 
exceptional circumstances justify the earlier indemnification or 
payment of a settlement amount. This policy is applicable to actions 
pending against FTC employees as of its effective date, as well as to 
actions commenced after that date.

Regulatory Flexibility Act

    The Commission certifies that these new regulations, which deal 
solely with internal policies governing FTC personnel, do not require 
an initial or final regulatory analysis under the Regulatory 
Flexibility Act because they will not have a significant economic 
impact on a substantial number of small entities. See 5 U.S.C. 605(b).

Paperwork Reduction Act

    The regulations adopted herein do not contain information 
collection requirements within the meaning of the Paperwork Reduction 
Act, 44 U.S.C. 3501-3520.

Administrative Procedure Act

    The indemnification policy is published in final form without the 
opportunity for public notice and comment because it is a general 
statement of policy relating to FTC management and personnel. See 5 
U.S.C. 553(a)(2),(b).

List of Subjects in 16 CFR Part 1

    Administrative practice and procedure, Government employees, 
Indemnity payments.

    For the reasons set forth in the preamble, the Federal Trade 
Commission amends part 1, title 16, of the Code of Federal Regulations, 
as follows:

PART 1--GENERAL PROCEDURES

0
1. The authority citation for part 1 continues to read as follows:

    Authority:  Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless 
otherwise noted.


Sec. Sec.  1.125 through 1.129  [Added and Reserved]

0
2. In subpart Q, add and reserve Sec. Sec.  1.125 through 1.129.

0
3. Add subpart R to read as follows:

Subpart R--Policy With Regard to Indemnification of FTC Employees

    Authority:  15 U.S.C. 46.


Sec.  1.130  Policy on employee indemnification.

    (a) The Commission may indemnify, in whole or in part, its 
employees (which for the purpose of this regulation includes former 
employees) for any verdict, judgment, or other monetary award which is 
rendered against any such employee, provided that the conduct giving 
rise to the verdict, judgment, or award was taken within the scope of 
his or her employment with the Federal Trade Commission and that such 
indemnification is in the interest of the Federal Trade Commission, as 
determined as a matter of discretion by the Commission, or its 
designee.
    (b) The Commission may settle or compromise a personal damage claim 
against its employee by the payment of available funds, at any time, 
provided the alleged conduct giving rise to the personal damage claim 
was taken within the scope of employment and that such settlement or 
compromise is in the interest of the Federal Trade Commission, as 
determined as a matter of discretion by the Commission, or its 
designee.

[[Page 30967]]

    (c) Absent exceptional circumstances, as determined by the 
Commission or its designee, the Commission will not entertain a request 
either to agree to indemnify or to settle a personal damage claim 
before entry of an adverse verdict, judgment, or monetary award.
    (d) When an employee of the Federal Trade Commission becomes aware 
that an action may be or 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 shall immediately notify his or 
her supervisor that such an action is pending or threatened. The 
supervisor shall promptly thereafter notify the Office of the General 
Counsel. Employees may be authorized to receive legal representation by 
the Department of Justice in accordance with 28 CFR 50.15.
    (e)(1) The employee may, thereafter, request either:
    (i) Indemnification to satisfy a verdict, judgment or award entered 
against the employee; or
    (ii) Payment to satisfy the requirements of a settlement proposal.
    (2) The employee shall submit a written request, with documentation 
including copies of the verdict, judgment, award, or settlement 
proposal, as appropriate, to the head of his or her division or office, 
who thereupon shall submit to the General Counsel, in a timely manner, 
a recommended disposition of the request. The General Counsel may also 
seek the views of the Department of Justice. The failure of an employee 
to provide notification under paragraph (d) of this section or make a 
request under this paragraph (e) shall not impair the agency's ability 
to provide indemnification or payment under this section if it 
determines it is appropriate to do so.
    (f) Any amount paid under this section either to indemnify a 
Federal Trade Commission employee or to settle a personal damage claim 
shall be contingent upon the availability of appropriated funds of the 
Federal Trade Commission.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-14008 Filed 7-3-17; 8:45 am]
 BILLING CODE 6750-01-P

30966 Federal Register / Vol. 82, No. 127 / Wednesday, July 5, 2017 / Rules and Regulations

FEDERAL TRADE COMMISSION may lead to a personal liability claim Paperwork Reduction Act, 44 U.S.C.
resulting in a monetary judgment tends 3501–3520.
16 CFR Part 1 to intimidate employees, stifle creativity
Administrative Procedure Act
and initiative, and limit decisive action.
Indemnification of Federal Trade Thus, the threat of personal liability The indemnification policy is
Commission Employees against an employee for a decision made published in final form without the
AGENCY: Federal Trade Commission or action taken as part of official duties opportunity for public notice and
(‘‘FTC’’ or ‘‘Commission’’). can adversely affect the FTC’s comment because it is a general
ACTION: Final rule.
achievement of its mission. The statement of policy relating to FTC
adoption of a policy to permit management and personnel. See 5
SUMMARY: The Federal Trade indemnification would help alleviate U.S.C. 553(a)(2),(b).
Commission is publishing a policy that these problems and afford FTC
List of Subjects in 16 CFR Part 1
permits indemnification of FTC employees the same protection now
employees in appropriate given to other federal employees in Administrative practice and
circumstances, as determined by the several other government agencies, procedure, Government employees,
Commission or the Commission’s including the Agency for International Indemnity payments.
designee, for claims made against them Development, Commodity Futures For the reasons set forth in the
as a result of actions taken by them in Trading Commission, Department of preamble, the Federal Trade
the scope of their employment. Commerce, Department of Education, Commission amends part 1, title 16, of
DATES: These amendments are effective Department of Health and Human the Code of Federal Regulations, as
July 5, 2017. Services, Department of the Interior, and follows:
FOR FURTHER INFORMATION CONTACT:
the Department of Justice.
The FTC’s policy permits, but does PART 1—GENERAL PROCEDURES
David C. Shonka, Acting General
not require, the agency to indemnify a
Counsel, (202) 326–2222, Office of the ■ 1. The authority citation for part 1
FTC employee who suffers an adverse
General Counsel, Federal Trade continues to read as follows:
verdict, judgment, or other monetary
Commission, 600 Pennsylvania Avenue
award, provided that the actions giving Authority: Sec. 6, 38 Stat. 721 (15 U.S.C.
NW., Washington, DC 20580.
rise to the judgment were taken within 46), unless otherwise noted.
SUPPLEMENTARY INFORMATION: Presently, the scope of employment, and that such
the FTC does not have a policy to indemnification is in the interest of the §§ 1.125 through 1.129 [Added and
indemnify its employees who are sued Reserved]
FTC, as determined by the Commission
in their individual capacities and who or the Commission’s designee. The ■ 2. In subpart Q, add and reserve
suffer an adverse judgment as a result of policy also allows the agency to settle a §§ 1.125 through 1.129.
conduct taken within the scope of their claim brought against an employee in ■ 3. Add subpart R to read as follows:
employment; nor does the FTC have a his or her individual capacity by the
policy to settle these claims with agency payment of funds, upon a similar Subpart R—Policy With Regard to
funds. Lawsuits against federal determination by the Commission or the Indemnification of FTC Employees
employees in their personal capacities Commission’s designee. Generally, the
have proliferated since the Supreme FTC will not entertain a request either Authority: 15 U.S.C. 46.
Court’s decision in Bivens v. Six to indemnify or to pay to settle a
Unknown Named Agents of the Federal § 1.130 Policy on employee
personal damage claim against an indemnification.
Bureau of Narcotics, 403 U.S. 388 employee before entry of an adverse
(1971). This decision held that personal verdict, judgment, or monetary award. (a) The Commission may indemnify,
damage awards against a federal However, in certain cases, the in whole or in part, its employees
employee are permitted when, in the Commission or its designee, may (which for the purpose of this regulation
course of his or her employment, the determine that exceptional includes former employees) for any
federal employee is found to have circumstances justify the earlier verdict, judgment, or other monetary
violated an individual’s constitutional indemnification or payment of a award which is rendered against any
rights. Although the Federal Liability settlement amount. This policy is such employee, provided that the
Reform and Tort Compensation Act of applicable to actions pending against conduct giving rise to the verdict,
1988, Public Law 100–694, prohibits FTC employees as of its effective date, judgment, or award was taken within
personal actions against Federal as well as to actions commenced after the scope of his or her employment with
employees for common law torts that date. the Federal Trade Commission and that
committed while acting within the such indemnification is in the interest
scope of their employment, that Act Regulatory Flexibility Act of the Federal Trade Commission, as
does not apply to suits against federal The Commission certifies that these determined as a matter of discretion by
employees for violation of the new regulations, which deal solely with the Commission, or its designee.
Constitution or federal statutes. internal policies governing FTC (b) The Commission may settle or
The FTC believes that actions against personnel, do not require an initial or compromise a personal damage claim
its employees in their personal final regulatory analysis under the against its employee by the payment of
capacities and the potential for a Regulatory Flexibility Act because they available funds, at any time, provided
judgment against agency employees will not have a significant economic the alleged conduct giving rise to the
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hinder the agency’s effectiveness as a impact on a substantial number of small personal damage claim was taken
law enforcement agency. The FTC’s entities. See 5 U.S.C. 605(b). within the scope of employment and
ability to effectively protect consumers that such settlement or compromise is
and promote competition depends upon Paperwork Reduction Act in the interest of the Federal Trade
the willingness of its employees to The regulations adopted herein do not Commission, as determined as a matter
pursue investigations and litigation. contain information collection of discretion by the Commission, or its
Uncertainty regarding what conduct requirements within the meaning of the designee.

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Federal Register / Vol. 82, No. 127 / Wednesday, July 5, 2017 / Rules and Regulations 30967

(c) Absent exceptional circumstances, DEPARTMENT OF DEFENSE centerline of the ship in the athwartship
as determined by the Commission or its direction; Annex I, paragraph 2(f)(i),
designee, the Commission will not Department of the Navy pertaining to the placement of the
entertain a request either to agree to masthead light or lights above and clear
indemnify or to settle a personal damage 32 CFR Part 706 of all other lights and obstructions; and
claim before entry of an adverse verdict, Annex I, paragraph 2(f)(ii), pertaining to
judgment, or monetary award. Certifications and Exemptions Under the vertical placement of task lights. The
(d) When an employee of the Federal the International Regulations for DAJAG (Admiralty and Maritime Law)
Trade Commission becomes aware that Preventing Collisions at Sea, 1972 has also certified that the lights
an action may be or has been filed AGENCY: Department of the Navy, DoD. involved are located in closest possible
against the employee in his or her ACTION: Final rule. compliance with the applicable 72
individual capacity as a result of COLREGS requirements.
conduct taken within the scope of his or SUMMARY: The Department of the Navy Moreover, it has been determined, in
her employment, the employee shall (DoN) is amending its certifications and accordance with 32 CFR parts 296 and
immediately notify his or her supervisor exemptions under the International 701, that publication of this amendment
that such an action is pending or Regulations for Preventing Collisions at for public comment prior to adoption is
threatened. The supervisor shall Sea, 1972 (72 COLREGS), to reflect that impracticable, unnecessary, and
promptly thereafter notify the Office of the Deputy Assistant Judge Advocate contrary to public interest since it is
the General Counsel. Employees may be General (DAJAG) (Admiralty and based on technical findings that the
authorized to receive legal Maritime Law) has determined that USS placement of lights on this vessel in a
representation by the Department of RALPH JOHNSON (DDG 114) is a vessel manner differently from that prescribed
Justice in accordance with 28 CFR of the Navy which, due to its special herein will adversely affect the vessel’s
50.15. construction and purpose, cannot fully ability to perform its military functions.
(e)(1) The employee may, thereafter, comply with certain provisions of the 72
request either: COLREGS without interfering with its List of Subjects in 32 CFR Part 706
(i) Indemnification to satisfy a verdict, special function as a naval ship. The
Marine safety, Navigation (water),
judgment or award entered against the intended effect of this rule is to warn
Vessels.
employee; or mariners in waters where 72 COLREGS
(ii) Payment to satisfy the apply. For the reasons set forth in the
requirements of a settlement proposal. DATES: This rule is effective July 5, 2017 preamble, the DoN amends part 706 of
(2) The employee shall submit a and is applicable beginning June 23, title 32 of the Code of Federal
written request, with documentation 2017. Regulations as follows:
including copies of the verdict,
FOR FURTHER INFORMATION CONTACT: PART 706—CERTIFICATIONS AND
judgment, award, or settlement
Lieutenant Commander Kyle Fralick, EXEMPTIONS UNDER THE
proposal, as appropriate, to the head of
(Admiralty and Maritime Law), Office of INTERNATIONAL REGULATIONS FOR
his or her division or office, who
the Judge Advocate General, Department PREVENTING COLLISIONS AT SEA,
thereupon shall submit to the General
of the Navy, 1322 Patterson Ave. SE., 1972
Counsel, in a timely manner, a
Suite 3000, Washington Navy Yard, DC
recommended disposition of the
20374–5066, telephone 202–685–5040. ■ 1. The authority citation for part 706
request. The General Counsel may also
SUPPLEMENTARY INFORMATION: Pursuant continues to read:
seek the views of the Department of
Justice. The failure of an employee to to the authority granted in 33 U.S.C. Authority: 33 U.S.C. 1605.
provide notification under paragraph (d) 1605, the DoN amends 32 CFR part 706.
This amendment provides notice that ■ 2. Section 706.2 is amended by:
of this section or make a request under
the DAJAG (Admiralty and Maritime ■ a. In Table Four, paragraph 15,
this paragraph (e) shall not impair the
Law), under authority delegated by the adding, in alpha numerical order, by
agency’s ability to provide
Secretary of the Navy, has certified that vessel number, an entry for USS RALPH
indemnification or payment under this
USS RALPH JOHNSON (DDG 114) is a JOHNSON (DDG 114); and
section if it determines it is appropriate
vessel of the Navy which, due to its ■ b. In Table Five, by adding, in alpha
to do so.
(f) Any amount paid under this special construction and purpose, numerical order, by vessel number, an
section either to indemnify a Federal cannot fully comply with the following entry for USS RALPH JOHNSON (DDG
Trade Commission employee or to settle specific provisions of 72 COLREGS 114).
a personal damage claim shall be without interfering with its special The additions read as follows:
contingent upon the availability of function as a naval ship: Annex I,
appropriated funds of the Federal Trade paragraph 3(a), pertaining to the § 706.2 Certifications of the Secretary of
location of the forward masthead light the Navy under Executive Order 11964 and
Commission. 33 U.S.C. 1605.
in the forward quarter of the ship, and
By direction of the Commission. the horizontal distance between the * * * * *
Donald S. Clark, forward and after masthead lights;
Secretary. Table Four
Annex I, paragraph 3(c), pertaining to
[FR Doc. 2017–14008 Filed 7–3–17; 8:45 am] placement of task lights not less than * * * * *
BILLING CODE 6750–01–P two meters from the fore and aft 15. * * *
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Document Created: 2017-07-04 02:01:08
Document Modified: 2017-07-04 02:01:08

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		These amendments are effective July 5, 2017.
Contact		David C. Shonka, Acting General Counsel, (202) 326-2222, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation		82 FR 30966
CFR Associated		Administrative Practice and Procedure; Government Employees and Indemnity Payments