On Petition for Review from the United States Department of Labor.
Becker, Hutchinson and Scirica, Circuit Judges.
This is an appeal under 29 U.S.C. § 817 (Supp. V 1981) from a partial denial of backpay by the Secretary of Labor. The Secretary found that plaintiffs' employment was improperly terminated and awarded backpay. Plaintiffs claim that they are entitled to additional backpay over that awarded by the Secretary. Because we find that the Secretary's decision is supported by substantial evidence, we will affirm.
Plaintiffs, ten former employees of the City of Camden, contest their termination from positions funded under the Comprehensive Employment and Training Act ("CETA"), 29 U.S.C. § § 801-999 (1976 & Supp. V 1981).*fn1 On March 23, 1979, the Administrator of Camden's Employment and Training Administration ("ETA") notified ETA staff members in the Operations Unit*fn2 by memorandum that their employment would be terminated May 4, 1979, their unit eliminated and their services contracted out to private industry. The ETA Administrator stated that she had observed "an intolerably high level of inefficiency, operational errors, poor performance, and nonprofessional capabilities" in the plaintiffs' department. Although citing "just cause" as the reason for termination, the ETA Administrator did not review the individual personnel files of any of the affected employees, which contained prior evaluations of adequate performance. The memorandum also notified the employees that the State Employment Agency would assist them in finding other employment. When several staff members contacted George Cox of the State Employment Agency, he informed them that no positions were available.
The City of Camden ETA Personnel Handbook sets forth procedures governing termination of employment for just cause or for reduction in work force. Specifically, the handbook provides that "no City of Camden ETA employee may be removed from service except for just cause and upon written charges," and describes infractions that may constitute "just cause," including neglect of duty, incompetency, inefficiency, or incapacity due to mental or physical disability. The handbook also provides that, "if a reduction in force becomes necessary due to lack of funds or work, . . . ETA will exhaust all possibilities of transfer, new assignment, and/or promotion" in order to minimize employee displacement.
Any reorganization of ETA departments requires prior approval by the Regional Office for the Department of Labor under CETA Federal Regulations, 20 C.F.R. § 676.16 (b) (2) (1979). Nevertheless, the ETA Administrator reorganized the Operations Unit and terminated the plaintiffs on May 4, 1979 without the Department of Labor's approval. The Department of Labor's Regional Administrator finally approved the reorganization on June 29, 1979.
Following termination, several plaintiffs filed untimely grievances at the ETA that were denied. Plaintiffs then appealed their terminations to a grant officer at the Department of Labor. The grant officer found that (1) the reorganization was in violation of the 20 C.F.R. § 676.16 (b) (2), since it was implemented without prior approval of the regional office; (2) the employees were not entitled to pre-termination hearings under the Code of Federal Regulations or Camden's grievance procedures; (3) the terminations were the result of a "reduction in force," and were therefore not in violation of merit principles or policies contained in the handbook; and (4) the ETA made inadequate efforts to transfer, reassign, or promote the staff members affected by the reduction in force. As a result, the grant officer awarded plaintiffs backpay from the date of their termination until June 29, 1979, the date that the reorganization was approved by the Department of Labor, and ordered the city to reinstate the staff members to positions similar to those previously held.
Dissatisfied with the grant officer's award of limited backpay, plaintiffs requested a hearing before an Administrative Law Judge. After a hearing, the ALJ determined that Camden ETA's failure to obtain Department of Labor approval for its reorganization of the Operations Unit violated 20 C.F.R. § 676.16(b) (2), even though subsequently approved on June 29, 1979. In addition, the ALJ concluded that the "reorganization [of the Operations Unit] was carried out with little, if any concern, for the employees affected." According to the ALJ, the ETA Administrator made no effort to transfer, reassign, or promote any of the affected employees prior to their termination, and her direction to the employees to contact Mr. Cox was characterized by the ALJ as merely a "token effort." Indeed, Philip Benson, the assistant personnel officer for the City of Camden ETA, testified at the hearing that he was never asked to transfer, reassign or promote any of the affected employees. At one point Benson testified generally that all the affected employees could have filled positions that were available at Camden ETA after their termination, but later limited his testimony and stated that only some of the employees could have filled positions available at the ETA. Following their termination, three employees attempted to secure new positions at Camden ETA, but received no offers. In particular, plaintiff William Boyer applied for a position for which he was qualified, but was given no preference.
The ALJ determined, based on this evidence, that the employees' termination, ostensibly for "just cause," violated the plaintiffs' substantive and procedural rights. Although citing inefficiency and poor performance of the Operations Unit as cause for termination, the ETA Administrator failed to bring specific charges against any employee, nor did she consult the employees' individual personnel files. The ALJ also found that the ETA Administrator made no effort to reassign, transfer, or promote the employees displaced by the reorganization as required by the reduction in force provisions in the personnel handbook.*fn3 The ALJ concluded that an award of backpay would be the appropriate "make whole" remedy, and found that the employees had made a "particularized showing" of entitlement to backpay under the standard set forth in City of Philadelphia v. United States Dept. of Labor, 723 F.2d 330, 332-33 (3d Cir. 1983) (backpay award not justified without particularized showing that backpay remedy is appropriate). Therefore, the ALJ awarded the employees backpay from the date of their termination, May 4, 1979, to January 14, 1983, one of the days of the hearing, and ordered reinstatement to positions similar to those formerly held.
On January 2, 1985, the Secretary of Labor asserted jurisdiction to review the ALJ's determinations under 20 C.F.R. § 676.91(f) (1984). On December 14, 1987, the Secretary issued a decision, finding that plaintiffs were entitled to backpay from May 4, 1979 to June 29, 1979: "Clearly, but for Camden ETA's termination action, the complainants would have been employed until June 29, 1979, and are therefore entitled to backpay until that date."
The Secretary also found that the ALJ had properly applied the reduction in force provisions of the Staff Personnel Handbook because "there obviously was a reduction in force for the Operations Unit." Nevertheless, the Secretary concluded that the measure of compensation lost after June 29, 1979 was too speculative and, citing City of ...