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U.S. Department of Health and Human Services

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Roles and Responsibilities for FDA Employees Interacting with an Outside Organization under a PPP

The activities of all FDA representatives to a Public-Private Partnership (PPP) will abide by Title18 U.S.C. section 208, the criminal conflict of interest statute, which prohibits federal employees from participating in an official matter that affects the financial interest of an outside organization in which the employee serves as officer, director, trustee or employee. The Department of Justice has opined a federal employee can violate section 208 by participating in an official matter that affects the financial interest of an outside organization in which the federal employee serves as officer, director, trustee, or employee even where the federal employee serves as an official duty activity. Therefore, section 208 prohibits federal employees from serving in their official capacity as officer, director, trustee, or employee of an outside organization, unless one of the following options has been satisfied:

  • An FDA employee may serve in an official capacity if a federal statute expressly authorizes such service with the organization; or
  • An FDA employee may serve in an official capacity if the outside organization releases the individual from all fiduciary obligations.  In order for such a release to be effective, it would have to be permitted under applicable state law; or
  • An FDA employee may serve in an official capacity if the individual obtains a waiver of the conflict of interest statute under section 208 from the appropriate DHHS official (see link for sample waiver); or
  • An FDA employee may serve an organization in a purely private capacity, as an outside activity. An employee who engages in an outside activity as officer, director, trustee, or employee of an organization would have to recuse himself from any official matter that affects the financial interest of the organization.  This includes particular matters affecting the organization specifically (such as a grant application or an investigation) as well as particular matters that affect the organization as part of a class of entities (e.g., a new regulation affecting all universities with medical schools).  The employee would have to avoid any appearance of using his public office for private gain, and proper clearance must be obtained on Form HHS-520, “Request for Approval of Outside Activity.”

In addition to the above factors, supervisors and employees should be aware that when serving as an officer, director, trustee, or employee of an outside organization, liability issues can arise as a result of such service.  Where the employee undertakes such service as an outside, private activity, the federal government would have no responsibility for providing legal representation if the employee is a party to a lawsuit stemming from such service, and would not be responsible for satisfying any judgment entered against the employee.  Even where an employee has been assigned to such service as an official duty activity, there have been past cases where the Department of Justice has declined to provide legal representation where the employee was a named defendant in a lawsuit stemming from service with an outside organization.  To qualify for representation, there must be a determination that it is within the agency’s programmatic legal authority to undertake the proposed activity.  The Federal Tort Claims Act (FTCA) constitutes a limited waiver of sovereign immunity regarding claims for money against the United States for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment.  Determinations of scope of employment are made on a case-by-case basis, are generally fact-specific, and may require consideration of a variety of factors.  The results under any particular set of facts, therefore, are not always entirely predictable, and the Department of Justice has the primary role in certifying whether or not a given activity falls within the scope of employment.

Accordingly, where agency managers want to assign personnel to tasks that would not obviously fit within the regular course and scope of an employee’s regular workplace duties (including service as an officer, director, trustee, or employee of an outside organizations), there should be a written determination by a supervisor with authority for making such a determination that the activity supports the Department’s authorized activities and is not otherwise prohibited by law or agency policy.  Other documentation tools may include Memoranda of Understanding or Agreement, personnel orders, letters of assignment, or other written documents that memorialize the understandings of the agency, the employee, and the receiving outside organization.  However, none of these factors are necessarily determinative of whether or not an activity will ultimately be found to have occurred within the scope of employment.

An alternative to serving as an officer, director, trustee, or employee of an outside organization is to assign an employee to serve as a “Federal Liaison” to the organization, which would not implicate section 208 or the above-described liability issues.  As a Federal Liaison to a PPP, the employee would be the FDA representative to the organization, and would present and receive information and views on behalf of the Department of Health and Human Services (DHHS) and FDA; but would not hold a position as an officer, director, trustee, or employee of the organization, and would not direct the organization’s internal operations.  Serving as a Federal Liaison (rather than as an officer, director, trustee, or employee of the organization) is the preferred method of interacting with outside organizations under a PPP. 

It is recommended that each component determine whether employees in their FDA Center/Office are serving outside organizations in their official capacity as an officer, director, trustee, or employee.  If it is determined that an employee is serving an outside organization as part of his official duties, action should be taken on one of the options listed above.