City of Boston v. Secretary of Labor, 79-1458

• Decision Date: 23 September 1980
• Docket Number: No. 79-1458,79-1458
• Citation: 631 F.2d 156
• Parties: CITY OF BOSTON, Petitioner, v. SECRETARY OF LABOR, Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 156

631 F.2d 156

CITY OF BOSTON, Petitioner, v. SECRETARY OF LABOR, Respondent.

No. 79-1458.

United States Court of Appeals, First Circuit.

Argued May 7, 1980.

Decided Sept. 23, 1980.

Steven M. Kaye, Asst. Corp. Counsel, Boston, Mass., with whom Joseph W. Glannon, Sp. Asst. Corp. Counsel, Boston, Mass., was on brief, for petitioner.

Jonathan H. Waxman, Counsel for Litigation, Washington, D. C., with whom Carin Ann Clauss, Sol. of Labor, Nathaniel Baccus, III, Associate Sol., Washington, D. C., for Employment and Training, and Neilda C. Lee, were on brief, for respondent.

Before COFFIN, Chief Judge, BOWNES, Circuit Judge, and DAVIS, Judge, United States Court of Claims. ^*

DAVIS, Judge.

We are called upon to review actions of the Secretary of the United States Department of Labor in administering the Comprehensive Employment and Training Act of 1973 (CETA program). ¹ The CETA program was designed to provide job training and employment opportunities for the economically disadvantaged by means of the cooperative efforts of federal, state, and local governments. Petitioner City of Boston (Boston or the City) is a prime sponsor under CETA. ² It asks us to set aside a decision of the Secretary of Labor finding a violation of CETA regulations in the City's termination of Ms. Blanche Field (the complainant) from her CETA-funded position, and ordering it to pay $6,065 in back pay from non-CETA funds. We affirm the Secretary's conclusion that the CETA regulations were violated, but we vacate his award of back pay and remand for further consideration of the question whether back pay is the appropriate remedy under the facts of this case. ³

I.

Ms. Field filed an application for employment by Boston in a CETA-funded position in January 1975. After four interviews, she was told to report for work at the Workmen's Compensation Division of the City Law Department on February 19, 1975. The complainant was never told that a physical examination was necessary prior to her actual employment. ⁴ She reported, as instructed, and worked that full day in a CETA Title II (public service) position. On the following day, in accordance with the order of her supervisor, Mr. Earl Franklin, the complainant reported to Dr. Robert Blackburn, an employee of the City, for a physical examination. Dr. Blackburn examined her and administered a number of tests. His notes on Ms. Field's medical record show that he discovered "a large diffuse mass in (the) anterior neck." He also stated that Ms. Field had had this condition for "several weeks" and admitted to having "some trouble breathing." Dr. Blackburn rejected the complainant for employment by the City because of her poor physical condition. According to the testimony of Ms. Field, Dr. Blackburn advised her to see another doctor for treatment of the condition, and refused to further discuss his reason for rejecting her for employment.

After returning to her workplace and conferring with Mr. Franklin, the complainant went to Massachusetts General Hospital where she was examined by Dr. Robert Steiner. Dr. Steiner noted his conclusions in a letter that he gave to Ms. Field. He confirmed the presence of the mass, but diagnosed it as "a simple goiter-a benign medical condition." He stated that he saw no reason why she could not work during treatment.

On February 21, Ms. Field showed Dr. Steiner's letter to her supervisor who promised to speak to Dr. Blackburn concerning her situation. Mr. Franklin testified that he raised the matter with Dr. Blackburn who replied that the letter made no difference, and that his findings would control. The following Monday, Mr. Franklin told the complainant that the decision was final, and that she could not report to work. Subsequently, Ms. Field was paid for two days work from CETA funds.

In March 1975 Ms. Field filed a complaint with the Mayor's Office of Civil Rights (MOCR) which in turn referred it to the Massachusetts Commission Against Discrimination (MCAD) for investigation. In August 1975 she contacted the local representative of the Department of Labor. She was advised that her complaint filed with the City "must be resolved prior to filing a complaint with us." In November 1975 MCAD ruled that there was no probable cause to support further action on Ms. Field's discrimination complaint. It was dismissed without further hearing.

On December 1, 1975, Ms. Field filed a complaint with the City's CETA office alleging discrimination in her removal. The City held a hearing on the complaint on March 3, 1976. The grievance was denied by a written decision dated March 16, 1976. On March 30, the complainant appealed the City's decision to the Acting Regional Administrator for Employment and Training of the U.S. Department of Labor. He found that Ms. Field had been denied her right to written notice regarding the reasons for her termination and an opportunity to respond. On that basis, he ordered that she be reinstated and compensated for her lost wages from non-CETA funds.

Boston sought review within the U.S. Department of Labor under the CETA regulations. A hearing was held before an administrative law judge and both petitioner and respondent presented witnesses. The administrative law judge concurred in the judgment of the Acting Regional Administrator, but reduced the period for measuring back pay to that before March 3, 1976 when the City held a hearing on Ms. Field's complaint. Boston then appealed to the Secretary of Labor. He found that the complainant was a participant in the CETA program, that CETA regulations had been violated in that Ms. Field was denied her right to notice of the grounds of the adverse action prior to the taking of the action, denied her right to an opportunity to respond, and denied her right to an informal hearing. The Secretary also found that back pay was appropriate as a make-whole remedy, but he declined to order reinstatement. It is the Secretary's decision, insofar as adverse to Boston, that we have to consider (see note 3, supra ).

Three legal issues are presented, and we discuss them seriatim : I. Was the complainant a participant in the CETA program; II. Did the City violate CETA regulations in terminating her; and III. Did the Secretary properly exercise his discretion in ordering back pay as a make-whole remedy.

II.

The regulation at the center of this controversy is 29 C.F.R. § 95.37 (1974). ⁵ It stated:

Each prime sponsor shall establish a procedure for resolving any issue arising between it and a participant under any Title of the Act. Such procedures shall include an opportunity for an informal hearing, and a prompt determination of any issue which has not been resolved. When the prime sponsor proposes to take an adverse action against a participant, such procedures shall also include a notice setting forth the grounds for any adverse action proposed to be taken by the prime sponsor and giving the participant an opportunity to respond. No individual subject to the issue resolution requirements of this section may initiate the hearing procedures of Part 98 until all remedies under this section have been exhausted. Final determination made as a result of the review process shall be provided to the participant in writing. Such notice shall include the procedures by which the participant may appeal the final determination as set forth in Subpart C of Part 98.

The threshold issue is whether this regulation applied to Ms. Field. That depends on whether she was a participant in the CETA program-a "participant" was then defined as "an individual who qualifies and receives services or takes part in activities under provisions of the Act." 29 C.F.R. § 94.4(dd) (1974) (current version at 29 C.F.R. 94.4(kk) (1979)). Boston contends that the complainant fails to fulfill this definition because she was never a bona fide employee of the City. At the time Ms. Field applied for employment, city executive orders mandated that the appointing department have a copy of an approved medical report before processing personnel forms for appointees to city government positions. Petitioner argues that under these executive orders the complainant could not be a bona fide employee of the City prior to passing her physical. It suggests that during the period Ms. Field worked she was merely a conditional employee subject to unilateral termination for failure to pass her physical, and thus should not be classified as a CETA participant.

Assuming, arguendo, that petitioner's interpretation of the executive orders is correct, ⁶ we are persuaded that a "conditional employee" of Ms. Field's type is a participant in the CETA program. The regulation did not require Ms. Field to be a full employee in the eyes of the prime sponsor, however it might define that concept, but that she qualify and receive services under the Act. The complainant worked two days in a CETA Title II position. She was paid for those two days from CETA funds. If Ms. Field qualified (as she did) to receive pay from CETA funds, she likewise qualified as a "participant" who could invoke procedural rights under the CETA regulations. "Participant" is a broad word, covering everyone who has actually entered into the CETA program.

Boston argues that the extension of procedural protections to the complainant means that every person who seeks to participate in the CETA program would be entitled to such protection and that this would impose an impossible administrative burden on prime sponsors. Ms. Field, however, was not a mere applicant. She was hired, given an expectation of work, actually worked for two days and was paid from CETA funds. It is neither inequitable nor administratively burdensome to give such persons the procedural protections mandated by the CETA regulations. ⁷

III.

Boston also says that the procedures it used in terminating Ms. Field satisfied the requirements of the federal regulation. This regulation calls for (1) a notice setting forth the...