The law was passed in response to the United States Supreme Court's decision in Westfall v. Erwin, 484 U.S. 292 (1988), which had created a precedent that left federal employees open to liability to civil suits for actions they took while performing their duties for the government.

Since Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971), the Supreme Court has upheld that individual federal officers can be liable for civil tort suits for violations of constitutional rights that occur as part of their duties.

The district court ruled to dismiss the case on the basis that federal employees had absolute immunity for actions they perform in the course of their official duties.

In the Supreme Court's opinion, the assertion of absolute immunity could only apply if the federal official was performing the work during their duty and were exercising discretion.

According to Congressional reports, Congress considered that the decision created "an immediate crisis involving the prospect of personal liability and the threat of protracted personal tort litigation for the entire federal workforce", opening liability towards the lower ranks of the federal works for minor violations, such as lawsuits against employees over misplaced equipment or errors on governmental forms.