DATE:
CASE NO. 79-CETA-181
IN THE MATTER OF
TERRY O'BOYLE,
COMPLAINANT.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
This case arises under the Comprehensive Employment and
Training Act (CETA or the Act), 29 U.S.C. §§ 801-999
(Supp. V 1981), [1] and regulations promulgated thereunder at 20
C.F.R. Parts 675-680 (1990). On June 4, 1991, I issued a
Decision and Order to Show Cause, proposing to affirm the
Administrative Law Judge's (ALJ) finding that Complainant was
improperly discharged from his position at the Meynard
Correctional Center and her orders of reinstatement and backpay.
My June 4 Order also proposed that payment of the backpay, with
interest, would be due within nine months of my final order and
that the Illinois Department of Corrections (IDOC) and the
Illinois Department of Commerce and Community Affairs (IDCCA)
were jointly and severally liable for all amounts due
Complainant. The parties were given an opportunity to show cause
why the decision and proposed conclusions and order should not be
adopted as the final order.
IDOC and IDCCA (Respondents) have responded jointly by
moving to vacate or modify the Secretary's Decision and Order to
Show Cause. Respondents initially argue that the Secretary's
order, issued more than eleven years after the ALJ's decision in
this case, violates the Administrative Procedure Act (APA) which
provides that "[w]ith due regard for the convenience and
necessity of the parties or their representatives and within a
reasonable time, each agency shall proceed to conclude a matter
presented to it." 5 U.S.C. § 555(b) (1988). Motion to
Vacate or Modify (Motion) at 1-7.
Before an action may be set aside under the APA for lack of
punctuality, the aggrieved party must show that it was prejudiced
[PAGE 2]
by the delay. City of Camden, New Jersey v. United States
Department of Labor, 831 F.2d 449, 451 (3d Cir. 1987);
Panhandle Cooperative Association, Bridgeport, Nebraska v.
E.P.A., 771 F.2d 1149, 1153 (8th Cir. 1985); Estate of
French v. Federal Energy Regulatory Commission, 603 F.2d
1158, 1167 (5th Cir. 1979). Because setting aside an agency
decision is an extreme sanction, Panhandle, 771 F.2d at
1153, great care must be observed before doing so. Estate of
French, 603 F.2d at 1167. Respondents' primary claim of
prejudice is that they had a diminished ability to present a
defense. [2] Motion at 6-7. This contention is without merit
because the case was accepted for review within one month of when
the ALJ's decision was issued and all parties
had the opportunity to address the issues at that time. [3]
Moreover, the record is barren of any suggestion that Respondents
at any time complained about the pace of the proceedings in this
case. F.T.C. v. J. Weingarten, Inc., 336 F.2d 687, 691
(5th Cir. 1964), cert.denied, 380 U.S. 908 (1965).
Accordingly, there is no basis to vacate the proposed decision
because of delay in its issuance.
Respondents also urge that the proposed order be set aside
based on the equitable doctrine of laches. Motion at 7-8.
Leaving aside whether the government could be subject to the
equitable defense of laches, Respondents would have to establish
prejudice due to the delay in issuing the order. City of
Gary, Indiana v. United States Department of Labor, 793 F.2d
873, 875 (7th Cir. 1986). Since Respondents, for the reasons stated
supra, have not shown prejudice, I reject this contention.
Additionally, Respondents raise several contentions against
a finding that they violated the Act and are responsible for
reinstating Complainant with backpay. Motion at 11-22. None of
these arguments was raised previously by Respondents before the
Secretary, [4] see 29 C.F.R. § 8.9(b),
notwithstanding that they should have been anticipated. I
therefore decline to consider them in this motion. [5]
Respondents argue that if backpay is awarded, it cannot be
assessed for periods beyond the termination of the CETA program
in this case or, alternatively, beyond the date CETA itself was
repealed. Motion at 24-25. Part of this contention already has
been answered in that Complainant was a probationary employee
whose employment would not have ended with the termination of the
CETA program in which he took part. Decision and Order to Show
Cause at 2, 8. Because backpay is a make whole remedy, City
of Chicago v. United States Department of Labor, 753 F.2d
606, 608 (7th Cir. 1985); County of Monroe, Florida v. United
States Department of Labor, 690 F.2d 1359, 1362 (11th Cir.
1982), it
is payable until reinstatement is offered. Moreover, because
the violation took place before the repeal of CETA, the power
[PAGE 3]
to remedy that violation is not diminished. See 29 U.S.C.
§ 1591(e). I therefore reject the contention that backpay
should be limited. [6]
Contending that the Secretary should not award prejudgment
interest, Respondents also argue in the alternative that the
proposed rate of interest is too high. Motion at 30-33. Neither
of these arguments was raised previously before the Secretary, [7]
and they will not be addressed, therefore, in response to
Respondents' motion.
The payment order should be modified, Respondents argue,
because the Illinois appropriation process may not allow for
payment within nine months of the final order. Respondents now
propose that payment be due after all proceedings regarding
backpay are concluded and three months after an appropriation
for the amount due is signed by the Governor. Motion at 33-34.
IDCCA has stated previously that these payments can be made
within six to nine months of a final order. Exception of IDCCA.
Accordingly, upon consideration and in the interest of bringing
this matter to conclusion, I decline to modify the payment due
date.
In a separate exception to the Decision and Order to Show
Cause, IDCCA, the grantee, seeks to have its liability limited
to the period from June 28, 1978, to March 22, 1979, as found by
the ALJ. Contrary to IDCCA's contention that it should not be
responsible for the actions of another administrative agency, it
is well established that a grantee is jointly and severally
liable for the CETA violations of its subgrantees. San Diego
Regional Employment and Training Consortium v. U.S. Department of
Labor, 713 F.2d 1441, 1444-45 (9th Cir. 1983); Milwaukee
County v. Peters, 682 F.2d 609, 612-13 (7th Cir. 1982)
(grantees have considerable autonomy in local administration of
CETA programs and federal government is entitled to exact a
corresponding accountability).
CONCLUSIONS AND ORDER
Having considered the responses to the Decision and Order to
Show Cause, I adopt the decision, page 1 through page 10, line 17,
in its entirety (copy appended). Accordingly:
1. The ALJ's determination that Complainant was
improperly discharged is affirmed. Her orders of
reinstatement and backpay also are affirmed.
2. The order requiring payment of the backpay award
within twenty days is modified to allow payment within
nine months of the date of my final order.
3. Interest is payable on the backpay at the rates
[PAGE 4]
established under 26 U.S.C. § 6621 (copy of applicable rates
attached) from the date of discharge until the date of payment.
4. IDOC and IDCCA are jointly and severally liable for
all amounts due Complainant and no payments shall be
made either directly or indirectly with Federal funds.
SO ORDERED.
LYNN MARTIN
Secretary of Labor
Washington, D.C.
OAA:TMORRISS:kg:05/16/95
Room S-4309:FPB:523-9728
[ENDNOTES]
[1] CETA was repealed effective October 12, 1982. The
replacement statute, the Job Training Partnership Act, 29 U.S.C.
§§ 1501-1791 (1988), provides that pending proceedings
under CETA are not affected. 29 U.S.C. § 1591(e).
[2] Respondents also claim prejudice as a result of their
backpay liability increasing as time goes on. Motion at 6. They
have cited no authority, however, and I am aware of none, which
considers the accumulation of backpay liability to be grounds for
vacating a decision awarding backpay. If, as Respondents state
elsewhere, Motion at 22, Complainant's period of unemployment
following this discharge was brief, Respondents liability will be
correspondingly limited because interim earnings will be
deducted.
[3] Many of the cases cited by Respondents involve delay by
government agencies in bringing legal action. See,
e.g., E.E.O.C. v. Westinghouse Electric Corp., 592
F.2d 484, 486 (8th Cir. 1979); Chromcraft Corp. v. United
States Equal Employment Opportunity Commission, 465 F.2d 745,
746 (5th Cir. 1972). These cases are distinguishable from those
concerning delays in adjudication because, in the former case, a
defending party, if unaware that legal action may be taken
against it, might be unable to prepare a defense several years
after the events giving rise to the cause of action. The record
here provides ample evidence that Respondents were aware of the
complaint here and its pendency before the Department of Labor.
See, e.g., Motion, Exh. G.
[4] IDOC argued that it did not violate the Act by failing to
follow IDCCA's grievance procedures, IDOC Exception at 2, but did
not contest the reinstatement and backpay remedies if a violation
was found. IDCCA contested the method for computing interest on
the backpay award, but did not challenge the reinstatement or
backpay remedies. IDCCA Brief in Opposition to Grant Officer
at 1-2.
[5] Respondents also allege that the Secretary should not have
reached the substantive merits of Complainant's discharge from
his employment. Motion at 10. The substantive merits were
considered by the Jackson County Board and the Governor's Office
of Manpower and Human Development, each of which found that
Complainant's discharge was substantively improper. Grant
Officer's Ex. (G.O. Ex.) 1, Atch. 5-L, M. At the hearing,
Respondents did not raise, as a defense against a possible
backpay award, the contention that the discharge was
substantively proper. All of Respondents' exhibits attached to
the motion pertaining to the discharge, Motion Exs. A-E, were
part of the record before the ALJ. See G.O. Exs. 1, Atch.
2-A, B, C, 5-B; 2. My June 4 Order addressed the substantive
merits to show that, although that issue was not litigated before
the ALJ, she was justified in awarding backpay.
[6] Respondents assert that the effect of the stay pending the
appeal before the Secretary was to stop the accrual of back pay
and interest until the final decision was issued. Motion at 23.
Respondents have cited no direct authority for this proposition,
and to accept their position would deprive successful
complainants from receiving a make whole remedy. See
discussion supra.
[7] IDCCA stated that it did not oppose the award of interest,
but argued that it should be a variable rate rather than the high
fixed rate proposed by the Grant Officer. IDCCA Brief in
Opposition to Grant Officer at 1-2. The Decision and Order to
Show Cause provides at 10 for a variable rate in accordance with
CETA precedent. (Although the regulations at 29 C.F.R. Part 20
(1991) are not directly applicable in this case, I note that the
rate of interest imposed here is consistent with the rate the
Department of Labor "shall" seek in litigation to recover
backwages. 29 C.F.R. § 20.58(a)).
