Com. of Ky., Dept. of Human Resources v. Donovan
| Decision Date | 05 April 1983 |
| Docket Number | No. 81-3140,81-3140 |
| Citation | 704 F.2d 288 |
| Parties | COMMONWEALTH OF KENTUCKY, DEPARTMENT OF HUMAN RESOURCES, Petitioner, v. Raymond J. DONOVAN, Secretary of Labor, et al., Respondents. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Ryan M. Holloran, Asst. General Counsel, Com. of Ky., Dept. for Human Resources (argued), Frankfort, Ky., for petitioner.
Dwight Preston, Hardin County Atty., Elizabethtown, Ky., Donald J. Skeeters, David T. Gray, Skeeters & Bennett, R. Terry Bennett (argued), Radcliff, Ky., for Vine Grove.
Marcia C. Baugh, Elizabethtown, Ky., for Jerry Jones.
David E. Jones, Atlanta, Ga., Nathaniel Baccus, III, Jonathan H. Waxman, Neilda C. Lee, William DuRoss (argued), U.S. Dept. of Labor, Washington, D.C., for respondents.
Before KEITH and JONES, Circuit Judges, and ALLEN, District Judge. *
The Commonwealth of Kentucky petitions 1 this Court to set aside a decision of the Secretary of Labor that Jerry Jones, an employee of Vine Grove, Kentucky under the Comprehensive Employment and Training Act of 1973 (CETA), was wrongfully terminated and entitled to back pay. 2 The Commonwealth contends that the back pay award against it must fail for three reasons: (1) the Commonwealth was not the employer who wrongfully terminated Jones and thus not, as held by the Secretary, liable for any restitution to him; (2) even if the Commonwealth is liable for the wrongful discharge, it contends that back pay is not an appropriate remedy in this case; and (3) the award of back pay to be paid from non-CETA funds is alleged to be a violation of the Tenth Amendment.
Since we find no merit in the Commonwealth's contentions, we affirm the Secretary's order and award.
The Commonwealth is a prime sponsor under the CETA program, pursuant to 29 U.S.C. Sec. 801, et seq., receiving a federal grant for the maintenance of an employment and training program. The purpose of the program is to provide job training and employment opportunities for the economically disadvantaged, unemployed and underemployed so that they can become self-sufficient and gain the maximum employment opportunities available. 29 U.S.C. Sec. 801. 3
In its capacity as prime sponsor, the Commonwealth must, inter alia, maintain and supervise a program for funneling the federal funds to those who need it. 4 The program envisions the use of subgrantees, like Hardin County, Kentucky, who place or employ the ultimate beneficiaries of the grant.
Jerry Jones was hired under the CETA program by Hardin County and placed in the City of Vine Grove's public works department. He began work on July 23, 1976 and was classified as a "Laborer II." That position required him to perform various construction and maintenance tasks, though it did not require that he operate any machinery requiring a driver's license. 5 Jones did operate a back hoe on occasion, as part of his duties.
The ALJ found, and the record shows, that Jones was a good worker and had no problem in performing the variety of tasks assigned him. 6 There is some evidence in the record to the effect that he had a problem with drinking, but the problem does not seem to have had any effect on his work performance. That is, until he lost his driver's license.
It is not clear from the record exactly when Jones lost his license. The documentary evidence shows that his license was suspended on August 9, 1978, well after he was terminated by Hardin County on June 30. Yet, Jones's own testimony was to the effect that he had not had a driver's license for approximately six months prior to losing his job.
On June 30, 1978, Vine Grove terminated Jones's employment for poor work performance. The county, through its agent, approved the termination. Yet, shortly thereafter, the county reversed itself, on July 26, 1978, ordering Vine Grove to reinstate Jones. The change in position came after an informal hearing on July 20, held by the Kentucky Department of Human Resources. The Department had determined that there was insufficient cause for the dismissal. 7
Jones was never reinstated 8 but, upon returning to the jobsite, was told that there was no work for him. Presumably this was because he had lost his driver's license and could no longer operate the back hoe. The city evidently did not even consider finding Jones work at the jobsite which did not require a driver's license.
Upon notification by the city that Jones had been terminated, the Department of Human Resources attempted to find other work for Jones. Ultimately, the DHR found a job in Radcliff, Kentucky, some eight miles from Vine Grove. A DHR employee took Jones to the plant to interview for the job and he was eager to accept work. Yet, because he had neither a car nor a license, he could not get to and from work. There were no reasonable alternative means of transportation.
Even though the Radcliff job fell through by no fault of his own, Jones was terminated from the CETA program by Hardin County on July 31, 1978. The reason noted on the form was that he had found his own job. 9
Jones appealed his termination to the Commonwealth's DHR as prime sponsor. At this second hearing by the Department, it upheld the termination. The Department held that since Jones had accepted another job in Radcliff, even though he could not get to and from it, he was not entitled to continue in the CETA program.
This decision was appealed, pursuant to 29 C.F.R. Sec. 98.40, 10 to a grant officer in the Department of Labor. The grant officer reversed the decision of the DHR, holding that Jones should have been retained in the CETA program at the jobsite in Vine Grove because he could not find adequate transportation to the Radcliff job. The grant officer ordered reinstatement and back pay to be awarded from non-CETA funds.
The Commonwealth requested a hearing before an Administrative Law Judge (ALJ) to review the grant officer's decision and award. The ALJ held a hearing on July 17, 1980, at which he heard testimony and received documentary evidence. His decision upheld the grant officer's award against the Commonwealth. He found that Jones had not been discharged for cause and that the Commonwealth had failed to fulfill its obligation under the CETA program to find another job for Jones. At a minimum, the DHR should have attempted to have Jones reinstated at the Vine Grove jobsite in a capacity that did not require a driver's license.
Finally, the ALJ found that the award of back pay against the Commonwealth, even though it was Vine Grove who wrongfully dismissed Jones, was proper. The prime sponsor, the ALJ noted, is responsible for seeking reimbursement from Vine Grove if the city is indeed at fault.
Pursuant to 29 U.S.C. Sec. 817, the Commonwealth petitioned this Court to reverse the order granting back pay. It is this petition that is now before us.
The Commonwealth contends that the Secretary's order should be reversed because it was based upon the belief that the Commonwealth either was, in part, directly responsible for the improper termination of Jones from CETA, or that it can be held liable for the admittedly improper actions of Vine Grove. The Commonwealth's position is that it did all that it could to keep Jones in the CETA program and that it cannot be held accountable for the Vine Grove discharge. The proper remedy, it urges, is against Vine Grove.
The Secretary determined that Kentucky did not do all that it could have done. In fact, the ALJ noted that the Commonwealth did not even attempt to enforce its own order which called for Jones's reinstatement. Moreover, the Commonwealth did little to find either additional work under the program or to rectify the Vine Grove error. Finally the ALJ noted that the Commonwealth, as prime sponsor, cannot hide behind a lack of contractual or state law obligation to supervise the subgrantees. Instead, the supervisory responsibility derives from the CETA program itself. We agree.
In reviewing the Secretary's decision, the scope of our review should be made clear. CETA specifically provides that we must uphold the Secretary's factual conclusions if they are supported by substantial evidence on the record as a whole. 29 U.S.C. Sec. 817(b). 11
The Department of Labor ALJ premised the Commonwealth's liability on two notions. First, he held that the Commonwealth had failed to carry out its own duty to supervise the CETA program by overseeing and resolving problems with its subgrantees. Second, the ALJ noted that the Commonwealth is responsible, as prime sponsor, for the malfeasance of its subgrantees under CETA. Carefully noting that the Commonwealth has mechanisms under CETA to collect the amount of the judgment from the subgrantees, the ALJ awarded the back pay against the Commonwealth.
The Commonwealth's argument that it has no contractual or state law power to supervise the subgrantees is simply inapposite. 12 The power and duty to supervise stems directly from the CETA program. That program's enabling statute, 29 U.S.C. Sec. 801, et seq., and the regulations that have been promulgated thereunder, 29 C.F.R. Part 94, et seq., make clear that the prime sponsor is not a mere funnel for money to pass from the federal government to the grantees and ultimate employers. The structure of the program, as well as the obligations imposed upon the prime sponsor, are such that the prime sponsor is, in large part, given the major responsibility to ensure that the program runs effectively and according to law. The prime sponsor is clearly given the duty of supervision and the powers to carry the task to completion.
The prime sponsorship program appears to have developed in an effort to give as much local control over the particular programs consistent with guaranteeing that the purpose of the Act would not be frustrated by fragmentation. The prime sponsor is given the task of coordinating grants within...
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