[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR5501.106]

[Page 776-780]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
          CHAPTER XLV--DEPARTMENT OF HEALTH AND HUMAN SERVICES
 
PART 5501_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 
 
Sec. 5501.106  Outside employment and other outside activities.

    (a) Applicability. This section does not apply to special Government 
employees.
    (b) Definitions. For purposes of this section:
    (1) Compensation has the meaning set forth in 5 CFR 
2635.807(a)(2)(iii).
    (2) Consultative services means the provision of personal services 
by an employee, including the rendering of advice or consultation, which 
requires advanced knowledge in a field of science or learning 
customarily acquired by a course of specialize instruction and study in 
an institution of higher education, hospital, or other similar facility.
    (3) Professional services means the provision of personal services 
by an employee, including the rendering of advice or consultation, which 
involves the skills of a profession as defined in 5 CFR 2636.305(b)(1).
    (c) Prohibited outside employment and activities--(1) Prohibited 
assistance in the preparation of grant applications or contract 
proposals. An employee shall not provide consultative or professional 
services, for compensation, to or on behalf of any other person to 
prepare, or assist in the preparation of, any grant application, 
contract proposal, program report, or other document intended for 
submission to HHS.
    (2) Prohibited employment in HHS-funded activities. An employee 
shall not, for compensation, engage in employment, as defined in 5 CFR 
2635.603(a), with respect to a particular activity funded by an HHS 
grant, contract, cooperative agreement, cooperative research and 
development agreement, or other funding mechanism authorized by statute.
    (3) Prohibited outside activities applicable to employees of the 
Food and Drug Administration. An employee of the Food and Drug 
Administration who is required to file a public or confidential 
financial disclosure report pursuant to 5 CFR part 2634 shall not:
    (i) Engage in any self-employed business activity for which the sale 
or promotion of FDA-regulated products is expected to constitute ten 
percent or more of annual gross sales or revenues; or

[[Page 777]]

    (ii) Engage in employment, as defined in 5 CFR 2635.603(a), whether 
or not for compensation, with a significantly regulated organization, as 
defined in Sec. 5501.101(c)(2), unless the employment meets either of 
the following exceptions:
    (A) The employment consists of the practice of medicine, dentistry, 
veterinary medicine, pharmacy, nursing, or similar practices, provided 
that the employment does not involve substantial unrelated non-
professional duties, such as personnel management, contracting and 
purchasing responsibilities (other than normal ``out-of-stock'' 
requisitioning), and does not involve employment by a medical product 
manufacturer in the conduct of biomedical research; or
    (B) The employment primarily involves manual or unskilled labor or 
utilizes talents, skills, or interests in areas unrelated to the 
substantive programmatic activities of the FDA, such as clerical work, 
retail sales, service industry jobs, building trades, maintenance, or 
similar services.
    (4) Prohibited outside practice of law applicable to attorneys in 
the Office of the General Counsel. (i) An employee who serves as an 
attorney in or under the supervision of the Office of the General 
Counsel or the Office of Counsel to the Inspector General shall not 
engage in any outside practice of law that might require the attorney 
to:
    (A) Assert a legal position that is or appears to be in conflict 
with the interests of the Department of Health and Human Services, the 
client to which the attorney owes a professional responsibility; or
    (B) Interpret any statute, regulation or rule administered or issued 
by the Department.
    (ii) Exceptions. Nothing in this section prevents an employee from:
    (A) Acting, with or without compensation, as an agent or attorney 
for, or otherwise representing, the employee's parents, spouse, child, 
or any person for whom, or for any estate for which, the employee is 
serving as guardian, executor, administrator, trustee, or other personal 
fiduciary to the extent permitted by 18 U.S.C. 203 and 205, or from 
providing advice or counsel to such persons or estate; or
    (B) Acting, without compensation, as an agent or attorney for, or 
otherwise representing, any person who is the subject of disciplinary, 
loyalty, or other personnel administration proceedings in connection 
with those proceedings to the extent permitted by 18 U.S.C. 205, or from 
providing uncompensated advice or counsel to such person; or
    (C) Giving testimony under oath or from making statements required 
to be made under penalty for perjury or contempt.
    (iii) Specific approval procedures. (A) The exceptions to 18 U.S.C. 
203 and 205 described in paragraph (c)(4)(ii)(A) of this section do not 
apply unless the employee obtained the approval of the Government 
official responsible for the appointment of the employee to a Federal 
position.
    (B) The exception to 18 U.S.C. 205 described in paragraph 
(c)(4)(ii)(B) of this section does not apply unless the employee has 
obtained the approval of a supervisory official who has authority to 
determine whether the employee's proposed representation of another 
person in a personnel administration matter is consistent with the 
faithful performance of the employee's duties.
    (d) Prior approval for outside employment and other outside 
activities--(1) General approval requirement. Except as provided in 
paragraph (d)(3) of this section, an employee shall obtain written 
approval prior to engaging, with or without compensation, in outside 
employment, including self-employed business activities, or other 
outside activities in which the employee seeks to:
    (i) Provide consultative or professional services, including service 
as an expert witness;
    (ii) Engage in teaching, speaking, writing, or editing that:
    (A) Relates to the employee's official duties within the meaning of 
5 CFR 2635.807(a)(2)(i)(B) through (E); or
    (B) Would be undertaken as a result of an invitation to engage in 
the activity that was extended to the employee by a person or 
organization that is a prohibited source within the meaning of 5 CFR 
2635.203(d), as modified by the separate HHS component agency 
designations in Sec. 5501.102; or

[[Page 778]]

    (iii) Provide services to a non-Federal entity as an officer, 
director, or board member, or as a member of a group, such as a planning 
commission, advisory council, editorial board, or scientific or 
technical advisory board or panel, which requires the provision of 
advice, counsel, or consultation.
    (2) Additional approval requirement for employees of the Food and 
Drug Administration and the National Institutes of Health. In addition 
to the general approval requirements set forth in paragraph (d)(1) of 
this section, an employee of the Food and Drug Administration or the 
National Institutes of Health shall obtain written approval prior to 
engaging, with or without compensation, in any outside employment, as 
defined in 5 CFR 2635.603(a), with, or any self-employed business 
activity involving the sale or promotion of products or services of, any 
person or organization that is a prohibited source of the employee's 
component agency.
    (3) Exceptions to prior approval requirements. (i) Notwithstanding 
the requirements of paragraphs (d)(1) and (d)(2) of this section, prior 
approval is not required for participation in the activities of a 
political, religious, social, fraternal, or recreational organization 
unless:
    (A) The activity or the position held in the organization requires 
the provision of professional services within the meaning of paragraph 
(b)(3) of this section; or
    (B) The activity is performed for compensation other than the 
reimbursement of expenses.
    (ii) Notwithstanding the requirements of paragraphs (d)(1) and 
(d)(2) of this section, prior approval is not required for participation 
in an employment or other outside activity that has been exempted under 
paragraph (d)(7) of this section.
    (4) Submission of requests for approval. (i) An employee seeking to 
engage in any of the activities for which advance approval is required 
shall make a written request for approval a reasonable time before 
beginning the activity. This request shall be directed to the employee's 
supervisor. The supervisor shall submit the request and a statement 
addressing the extent to which the employee's duties are related to the 
proposed outside activity to an agency designee, who shall make a final 
determination with respect to the request.
    (ii) All requests for prior approval shall include the following 
information:
    (A) The employee's name, contact information, organizational 
location, occupational title, grade, step, salary, appointment type, and 
financial disclosure filing status;
    (B) The nature of the proposed outside employment or other outside 
activity, including a full description of the specific duties or 
services to be performed;
    (C) A description of the employee's official duties that relate to 
the proposed activity;
    (D) A description of how the employee's official duties will affect 
the interests of the person for whom or organization with which the 
proposed activity will be performed;
    (E) The name and address of the person for whom or organization with 
which the work or activity will be done, including the location where 
the services will be performed;
    (F) A statement as to whether travel is involved and, if so, whether 
the transportation, lodging, meals, or per diem will be at the 
employee's expense or provided by the person for whom or organization 
with which the work or activity will be done, and a description of the 
arrangements and an estimate of the costs of items to be furnished or 
reimbursed by the outside entity;
    (G) The estimated total time that will be devoted to the activity. 
If the proposed outside activity is to be performed on a continuing 
basis, a statement of the estimated number of hours per year; for other 
employment, a statement of the anticipated beginning and ending date;
    (H) A statement as to whether the work can be performed entirely 
outside of the employee's regular duty hours and, if not, the estimated 
number of hours and type of leave that will be required;
    (I) The method or basis of any compensation to be received (e.g., 
fee, honorarium, retainer, salary, advance, royalty, stock, stock 
options, non-travel

[[Page 779]]

related expenses, or other form of remuneration tendered in cash or in-
kind in connection with the proposed activity) from the person for whom 
or organization with which the work or activity will be done;
    (J) The amount of any compensation to be received from the person 
for whom or organization with which the work or activity will be done;
    (K) The amount and date of any compensation received, or due for 
services performed, within the current and previous six calendar years 
immediately preceding the submission of the request for approval from 
the person for whom or organization with which the work or activity will 
be done (including any amount received or due from an agent, affiliate, 
parent, subsidiary, or predecessor of the proposed payor);
    (L) A statement as to whether the compensation is derived from an 
HHS grant, contract, cooperative agreement, or other source of HHS 
funding or attributed to services related to an activity funded by HHS, 
regardless of the specific source of the compensation;
    (M) For activities involving the provision of consultative or 
professional services, a statement indicating whether the client, 
employer, or other person on whose behalf the services are performed is 
receiving, or intends to seek, an HHS grant, contract, cooperative 
agreement, or other funding relationship;
    (N) For activities involving teaching, speaking, or writing, a 
syllabus, outline, summary, synopsis, draft or similar description of 
the content and subject matter involved in the course, speech, or 
written product (including, if available, a copy of the text of any 
speech) and the proposed text of any disclaimer required by 5 CFR 
2635.807(b)(2) or by the instructions or manual issuances authorized 
under paragraph (d)(6) of this section; and
    (O) Such other relevant information that the designated agency 
ethics official or, with the concurrence of the designated agency ethics 
official, each of the separate agency components of HHS listed in Sec. 
5501.102(a) determines is necessary or appropriate in order to evaluate 
whether a proposed activity is likely to involve conduct prohibited by 
statute or Federal regulations, including 5 CFR part 2635 and this part.
    (5) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment or other outside activity is 
not expected to involve conduct prohibited by statute or Federal 
regulation, including 5 CFR part 2635 and this part.

    Note: The granting of approval for an outside activity does not 
relieve the employee of the obligation to abide by all applicable laws 
governing employee conduct nor does approval constitute a sanction of 
any violation. Approval involves an assessment that the general activity 
as described on the submission does not appear likely to violate any 
criminal statutes or other ethics rules. Employees are reminded that 
during the course of an otherwise approvable activity, situations may 
arise, or actions may be contemplated, that, nevertheless, pose ethical 
concerns.
    Example 1: A clerical employee with a degree in library science 
volunteers to work on the acquisitions committee at a local public 
library. Serving on a panel that renders advice to a non-Federal entity 
is subject to prior approval. Because recommending books for the library 
collection normally would not pose a conflict with the typing duties 
assigned the employee, the request would be approved.
    Example 2: While serving on the library acquisitions committee, the 
clerical employee in the preceding example is asked to help the library 
business office locate a missing book order. Shipment of the order is 
delayed because the publisher has declared bankruptcy and its assets, 
including inventory in the warehouse, have been frozen to satisfy the 
claims of the Internal Revenue Service and other creditors. The employee 
may not contact the Federal bankruptcy trustee to seek, on behalf of the 
public library, the release of the books. Even though the employee's 
service on the acquisitions committee had been approved, a criminal 
statute, 18 U.S.C. 205, would preclude any representation by a Federal 
employee of an outside entity before a Federal court or agency with 
respect to a matter in which the United States is a party or has a 
direct and substantial interest.

    (6) Duration of approval. Approval shall be effective for a period 
not to exceed one year from the date of approval. Upon a significant 
change in the nature of the outside activity or in the employee's 
official position or duties, the employee shall submit a revised request 
for approval using the procedure in paragraph (d)(4) of this

[[Page 780]]

section. If the outside activity is anticipated to exceed one year from 
the date of the most recent approval, the employee shall renew the 
request for approval no later than thirty days prior to the expiration 
of the period authorized.
    (7) Responsibilities of the designated agency ethics official and 
component agencies. (i) The designated agency ethics official or, with 
the concurrence of the designated agency ethics official, each of the 
separate agency components of HHS listed in Sec. 5501.102 may issue an 
instruction or manual issuance exempting categories of employment or 
other outside activities from a requirement of prior written approval 
based on a determination that the employment or activities within those 
categories would generally be approved and are not likely to involve 
conduct prohibited by statute or Federal regulations, including 5 CFR 
part 2635 and this part.
    (ii) HHS components may specify internal procedures governing the 
submission of prior approval requests and designate appropriate 
officials to act on such requests. The instructions or manual issuances 
may include examples of outside employment and other outside activities 
that are permissible or impermissible consistent with 5 CFR part 2635 
and this part. With respect to teaching, speaking, writing, or editing 
activities, the instructions or manual issuances may specify 
preclearance procedures and/or require disclaimers indicating that the 
views expressed do not necessarily represent the views of the agency or 
the United States.
    (iii) The officials within the respective HHS components who are 
responsible for the administrative aspects of these regulations and the 
maintenance of records shall make provisions for the filing and 
retention of requests for approval of outside employment and other 
outside activities and copies of the notification of approval or 
disapproval.
    (e) Waivers. The designated agency ethics official may grant a 
written waiver, for an individual or class of similarly situated 
individuals, from any prohibited outside activity provision in this 
section or in Sec. 5501.109 based on a determination that the waiver is 
not inconsistent with part 2635 of this title or otherwise prohibited by 
law and that, under the particular circumstances, application of the 
prohibition is not necessary to avoid the appearance of misuse of 
position or loss of impartiality or otherwise to ensure confidence in 
the impartiality and objectivity with which agency programs are 
administered. An individual or class waiver under this paragraph may 
impose appropriate conditions, such as requiring execution of a written 
disqualification.

[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005; 70 
FR 51568, Aug. 31, 2005]