NATIONAL COUNCIL OF CSA LOCALS, ETC. v. Schweiker, Civ. A. 81-2267.

• Decision Date: 21 October 1981
• Docket Number: No. Civ. A. 81-2267.,Civ. A. 81-2267.
• Citation: 526 F. Supp. 861
• Parties: NATIONAL COUNCIL OF CSA LOCALS AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES (AFGE) AFL-CIO, Plaintiff, v. Richard S. SCHWEIKER Individually and in His Official Capacity as Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — District of Columbia

526 F. Supp. 861

NATIONAL COUNCIL OF CSA LOCALS AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES (AFGE) AFL-CIO, Plaintiff, v. Richard S. SCHWEIKER Individually and in His Official Capacity as Secretary of Health and Human Services, Defendant.

No. Civ. A. 81-2267.

United States District Court, District of Columbia.

October 21, 1981.

John Carr, Washington, D. C., John I. Heise, Jr., Silver Spring, Md., for plaintiff.

Andrew M. Wolfe, Dept. of Justice, Washington, D. C., for defendant.

MEMORANDUM

JOHN GARRETT PENN, District Judge.

This case is now before the Court on plaintiff's motion for a preliminary injunction.¹

I

Very briefly, the underlying facts are as follows: The Community Services Administration (CSA) was established to administer programs designed to eliminate poverty. In August 1981, Congress passed the Omnibus Budget Reconciliation Act of 1981 (Budget Act), Pub.Law 97-35, which terminated CSA effective September 30, 1981, and made a number of changes in the administration of the anti-poverty programs. Effective October 1, 1981, the Department of Health and Human Services (HHS) assumed responsibility for administering most, if not all, of the programs previously administered by CSA.

The dispute leading to the filing of this action by the plaintiff results from a disagreement between the plaintiff, and the former CSA employees it represents, and the defendant as to how HHS should select employees to administer those programs formerly administered by CSA. Plaintiff contends that there has been a transfer of functions from CSA to HHS and that pursuant to the Veterans Preference Act of 1944 (VPA), as amended, 5 U.S.C. § 3503, former CSA employees should be given preference when HHS selects persons to administer those programs transferred to that agency.

The defendant contends that the VPA does not apply to the present transfer from CSA to HHS for two reasons. First, he argues that Congress has specifically exempted the transfer from the coverage of the VPA by giving the Director of the Office of Management and Budget (OMB) broad discretionary power to terminate the affairs of CSA including the power to "provide for the transfer or other disposition of personnel". Budget Act, § 682(e). Second, the defendant contends that notwithstanding the overall applicability of the VPA to this transfer, the VPA is inapplicable here because there has been no transfer of functions from CSA to HHS.

At this point in time, HHS has not begun to permanently employ persons to administer the former CSA programs, although it has hired some temporary employees pending the resolution of this litigation or the close out of certain aspects of the former CSA programs. Defendant admits however that it is his intention to select permanent employees to administer the program without reference to the VPA.

II

In order to prevail on a motion for a preliminary injunction, the plaintiff must demonstrate that the former CSA employees are likely to succeed on the merits, that they lack an adequate remedy at law and would suffer irreparable injury if injunctive relief is not granted, that the other parties will not suffer substantial harm if injunctive relief is granted, and where lies the public interest. Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 182 U.S.App.D.C. 220, 559 F.2d 841 (1977); Virginia Petroleum Jobbers, Inc. v. FPC, 104 U.S.App.D.C. 106, 259 F.2d 921 (1958).

In the view of this Court, there are two distinct issues presented by the parties. One is a question of law, that being whether Congress has expressly exempted this transfer from the coverage of the VPA. If Congress has exempted this transfer from the VPA, then this dispute is at an end and the defendant would prevail on all issues. Indeed, if the defendant is correct, it is appropriate for the Court to dismiss this action without consideration of the second issue. If the plaintiff is correct that Congress has not exempted the transfer from the VPA, then it is incumbent upon HHS to hire permanent employees to perform any former CSA functions pursuant to the requirements of the VPA. This does not mean however, that all or even the majority of the former CSA employees will or should be hired by HHS. The number hired would depend upon which functions of CSA have been transferred and whether the functions of particular employees have been transferred.

The second issue then is, assuming that the transfer has not been exempted from the coverage of the VPA, which functions, if any, of the former agency and its former employees have been transferred. The determination of whether there has been a transfer of functions will depend upon a careful review of the functions of the CSA as compared with the functions of the HHS office administering the former CSA programs. A review of the Budget Act makes it appear that some functions have been transferred and that those functions will be continued to be performed in the new agency for at least one year; however such a determination cannot rest upon a mere review of the statute itself.

The decision whether to grant preliminary injunctive relief depends then on the consideration of the two separate issues stated above.

III

The first issue is whether Congress has specifically exempted the present transfer from the coverage of the VPA. This is solely a question of law.

The Veterans Preference Act, as amended, provides:

(a) When a function is transferred from one agency to another each preference eligible employed in the function shall be transferred to the receiving agency for employment in a position for which he is qualified before the receiving agency may make an appointment from another source to that position.

(b) When one agency is replaced by another, each preference eligible employed in the agency to be replaced shall be transferred to the replacing agency for employment in a position for which he is qualified before the replacing agency may make an appointment from another source to that position.

5 U.S.C. § 3503. When Congress passed the VPA it "was primarily concerned with the problems caused by major government reorganizations". McNamara v. Dick, 116 U.S. App.D.C. 271, 273, 323 F.2d 276, 278 (1963), cert. denied 375 U.S. 895, 84 S.Ct. 171, 11 L.Ed.2d 124.

While the VPA applies to all cases where a "function is transferred from one agency to another" or "one agency is replaced by another" Congress may exempt any transfer from the coverage of the statute. See Myers v. Hollister, 96 U.S.App. D.C. 388, 226 F.2d 346 (1955), cert. denied 350 U.S. 987, 76 S.Ct. 474, 100 L.Ed. 854 (1956); Kirschner v. United States, 172 Ct.Cl. 526 (1965). Thus the court in Myers ruled that Congress exempted the transfer from the VPA when it provided in the statute in question that the director of the agency shall determine "which individual employees shall be retained". 96 U.S.App. D.C. at 389, 226 F.2d at 347. That it was the intent of Congress to exempt the agency from the coverage of the VPA was also obvious from the statute's legislative history. There the report stated that the director was to carry out the program and determine which employees to retain "without regard to existing statutes, regulations and procedures for reduction in force". 96 U.S.App.D.C. at 391, 226 F.2d at 349 (citing H.R.Rep.No.1922, 82d Cong., 2d Sess., 67-68 (1952)).

Similarly in Kirschner, supra at 527, the court ruled that language to the effect that "notwithstanding any other provision of law" the President shall transfer to the agency "such personnel ... as the President determines to be necessary", exempted the transfer from the VPA.

Here the defendant has failed to direct this Court's attention to language exempting this transfer from the VPA, and of course repeal by implication is not favored. Defendant argues that the provision that the Director of OMB "shall provide for the transfer or other disposition of personnel, assets, liabilities, grants, ..." exempts the transfer from the VPA. This Court cannot agree. That language can just as easily be construed to support plaintiff's argument in that it refers to a "transfer ... of personnel". Moreover, that portion of the legislative history cited by defendant providing that the Community Services Block Grant "is clearly a new program within HHS, not a transfer of authority", H.R.Rep.No. 208, 97th Cong., 1st Sess., 767-68 (1981) U.S.Code Cong. & Admin.News, pp. 396, 1128-1130 does not have the effect of exempting the transfer from the coverage of the VPA.

Congress could have specifically exempted the transfer from the requirements of the VPA by simple language but chose not to do so. This being the case, the Court concludes that it was not Congress' intent to exempt the transfer and that the Veterans Preference Act applies to this transfer. Thus the Court rules as a matter of law that the transfer from CSA to HHS is subject to the coverage of the Veterans Preference Act of 1944, as amended. Having so concluded, it follows that the plaintiff is entitled to injunctive relief requiring the agency (HHS) to screen potential employees having in mind the preferences afforded to former CSA employees by the Veterans Preference Act.

Although this case is before the Court on plaintiff's motion for preliminary injunction, there now appears to be no reason why the Court should not enter a final order on the limited issue of whether the transfer has been exempted from the coverage of the VPA. The issue has been argued by the parties and raises a question of law. The parties have had a full opportunity to cite relevant cases and statutes in support of their respective positions. Moreover, it is in the best interest of the parties that this limited issue be resolved by the Court at the earliest possible date since the future actions of HHS in filling vacancies for any transferred functions from CSA depend upon whether the VPA applies to the transfer.

Thus the Court will enter a...