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AFGE, LOCAL 421 v. SCHLESINGER

January 13, 1978

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 421, et al., Plaintiffs,
v.
James SCHLESINGER, Secretary, Department of Energy, Defendant



The opinion of the court was delivered by: GESELL

 GESELL, District Judge.

 Plaintiffs seek to enjoin the Department of Energy from requiring its employees to answer portions of a detailed questionnaire that plaintiffs claim intrudes unnecessarily into the rights of Energy employees to free association and privacy protected by the First Amendment of the Constitution. The Department, at the Court's suggestion, postponed the required date for response to the questionnaire pending a hearing. The matter was expedited. Cross-motions for summary judgment have now been filed, briefed, and argued. No material facts are in dispute.

 A full copy of the questionnaire (Form DOE-459) is attached. Part A is not challenged. *fn1" It focuses on the employees' direct or indirect interest in energy-related concerns -- associations, stock holdings, financial interests, debts, and the like -- and is amply supported by section 603(b) of the Department of Energy Organization Act ("Energy Act"), Pub.L.No. 95-91, 91 Stat. 593 (1977). Part B seeks the identical information with regard to interests considered by the employee not to be energy concerns.

 Part B, section I(a) now requires:

 
List the names of all corporations, companies, firms or other business enterprises, partnerships, nonprofit organizations and educational, or other institutions (a) with which you, your spouse, minor child, or dependents are connected as an employee, officer, owner, director, trustee, partner, adviser, or consultant or with which you are negotiating or have any arrangement concerning prospective employment . . . . *fn2"

 This sweeping and somewhat undefined demand will produce a wealth of personal information to be submitted to the employee's supervisor and filed eventually in the General Counsel's office. As originally written it sought even memberships, but this was stricken after the suit was filed. This slight adjustment and the fact the data will not be made public does not extricate defendant from the inherent overreach and unreasonableness of the demand. Reporting is required whenever an employee's spouse, minor child, dependent, or the employee himself is an official or adviser of his church, his fraternity, his school, any charity, or almost any cause, whether it be concerned with some aspect of the environment, alcohol, abortion, or union activity. There is no end to the ramifications of this inquiry. The Department offers no justification the Court finds persuasive.

 The Department apparently has two interests it seeks to protect by Part B of the questionnaire. First, it asks for disclosure to enable it to determine whether the employee has any interest in an energy concern which should have been reported under Part A. Many energy interests are unknown or so remote that they would be overlooked by a conscientious employee. Second, the Department wants data that will enable it to counsel employees on potential or actual conflicts of interest that may exist or arise as work assignments and duties progress.

 But Congress provided at § 601(c) of the Act that the Agency would identify those entities it considers to be energy concerns. It did not contemplate that every employee would be required to disgorge data which the Department would then investigate in its search for energy concerns. The Department has put the cart before the horse.

 As technology for storing, correlating, and regurgitating information improves and government inquisitiveness grows in geometric progression, the courts charged with protecting free association and expression must be alert to possibilities of abuse. "The right to be left alone," Justice Douglas has written, "is indeed the beginning of all freedom." Public Utilities Commission v. Pollak, 343 U.S. 451, 467, 72 S. Ct. 813, 823, 96 L. Ed. 1068 (1952) (dissenting opinion). Assemblies of personal information should not automatically occur at the whim of every bureaucrat. The Supreme Court has spoken authoritatively. An individual's association with groups concerned with political, economic, religious or cultural matters is normally his own business and no one else's. Before data can be gathered in these privacy areas, the government must "convincingly show a substantial relation between the information sought and a subject of overriding and compelling state interest." Gibson v. Florida Legislative Investigation Committee, 372 U.S. 539, 546, 83 S. Ct. 889, 894, 9 L. Ed. 2d 929 (1963); accord, e.g., Bates v. City of Little Rock, 361 U.S. 516, 524, 80 S. Ct. 412, 4 L. Ed. 2d 480 (1960); NAACP v. Alabama, 357 U.S. 449, 464, 78 S. Ct. 1163, 2 L. Ed. 2d 1488 (1958). There is no statutory authority for this intrusion. It finds no support in Executive Order 11222, 3 C.F.R. 306 (1965), which permits inquiry only into "financial interests." Id. § 402. It is not authorized by the Energy Act, which is addressed only to "energy concerns." It exceeds proper bounds and is unreasonable and repressive. Government employees do not waive all their constitutional rights when they enter public service. The First Amendment requires that section (I)(a) of Part B be eliminated from the questionnaire, and all who have already responded shall be granted the right to have the information submitted returned to them and expunged from the Department's files upon written request made within twenty days of notice, as provided in the attached judgment.

 The remaining portions of Part B of the questionnaire may well be authorized by Executive Order 11222. Since the Department has no regulations implementing the Order, however, it must proceed under the general Civil Service implementing regulations, 5 C.F.R. §§ 735.101-.412 (1976), and to do this must obtain Commission approval and publish notice in the Federal Register. Id. § 735.104(f). The Department has not so proceeded. It notes that most of its employees formerly worked for agencies now merged into the Department, where they were subject, with full Commission approval, to reporting requirements very similar to Part B. In addition, section 705, the savings provision of the Energy Act, continues in effect all rules, regulations, and determinations of any merged agency until set aside by authorized officials, a court, or operation of law. Since the reporting requirements of these merged agencies continue in operation, the Department argues, its actions under the Executive Order are exempt from Civil Service approval.

 It has long been recognized that some tolerance is allowable where financial data is gathered in situations like this to assure that information of possible relevance is obtained, and some intrusion into private fact that may prove unnecessary must be tolerated to assure the governmental purpose is achieved. See Buckley v. Valeo, 424 U.S. 1, 96 S. Ct. 612, 46 L. Ed. 2d 659 (1976); O'Brien v. DiGrazia, 544 F.2d 543 (1st Cir. 1976), cert. denied, 431 U.S. 914, 97 S. Ct. 2173, 53 L. Ed. 2d 223 (1977); Stein v. Howlett, 52 Ill.2d 570, 289 N.E.2d 409 (1972), appeal dismissed, 412 U.S. 925, 93 S. Ct. 2750, 37 L. Ed. 2d 152 (1973). In this instance the Department points to the variety of energy concerns that have not been identified and to the consequent need for data to permit a later determination as to the status of concerns in which an employee has an interest. The Department appears to have swept very broadly, although perhaps justifiably, given the special circumstances it confronts in its attempt to identify existing or potential conflicts. It will be for the Civil Service Commission closely to scrutinize this broad effort in the light of the purposes of the Executive Order, and the operation of section 603 of the Energy Act.

 The case will be remanded to enable defendant to seek Commission approval for proceeding under the Executive Order. The Commission's approval is a condition precedent to any further use of the remainder of Part B. Obviously, if the Commission disapproves in whole or in part, the information already collected will be subject to return upon the same conditions as that collected under section I(a) of Part B.

 Before remanding it is appropriate to make one further point. Plaintiffs argue that even if the remainder of Part B is authorized by the Executive Order and approved by the Civil Service Commission, the Privacy Act of 1974, 5 U.S.C. § 552a(1976), adopted nine years after the Order, prohibits any use of the information collected under Part B. That statute permits the unconsented maintenance of a "record of how any individual exercises rights guaranteed by the First Amendment" only under authority of a statute or within the scope of law enforcement activities. Id. § 552a(e)(7). Even assuming that the remainder of Part B implicates activities protected by the First Amendment, it is not necessary to determine whether in this context the Executive Order has the force of a statute for purposes of the Privacy Act because it is clear the system of records is being developed for law enforcement purposes within the meaning of that Act. Congress anticipated that agencies would take reasonable steps to prevent conflicts of interest and recognized that such efforts would be within the concept of law enforcement. See 120 Cong.Rec. 36651 (1974) (Rep. Ichord).

 Summary judgment is granted plaintiffs and denied defendants, and the case is remanded to the Secretary of the Department of Energy for further proceedings not inconsistent with this opinion.

 SO ORDERED.

 OCT 28 1977

 Department of Energy

 Washington, D.C. 20545

 MEMORANDUM FOR: ALL DOE Employees

 SUBJECT: REPORT OF FINANCIAL INTERESTS

 As indicated in the Secretary's September 23, 1977, memorandum to all employees, the DOE Organization Act contains a number of provisions relating to conflicts of interest. Included are (i) a requirement that supervisory employees transferred to DOE by the Act report their prohibited energy concern assets within 30 days of transfer (§ 602), and (ii) a requirement for the annual reporting of financial interests in energy concerns held by all employees, and their spouses and dependents, with the first such report due within 30 days after the employee commences service in the Department (§ 603).

 In order to fulfill the above and other legal reporting requirements to which DOE employees are subject, all employees described below are requested to complete Form DOE-459 (two copies attached). One copy of the completed form is to be submitted to the employee's immediate supervisor by c.o.b. October 31, 1977; the other copy may be retained by the employee.

 
(1) All employees occupying positions at or above GS-13, or the equivalent thereto;
 
(2) All auditors;
 
(3) All investigators;
 
(4) All case resolution officers;
 
(5) All officers and employees transferred from the Federal Energy Administration not exempted from filing a statement of known financial interests by Appendix E of 10 CFR Part 203;
 
(6) All employees of Federal Energy Regulatory Commission; and
 
(7) All attorneys, including legal interns, performing legal functions.

 Pursuant to § 603(e) of the Act, the Secretary has extended the time for reporting by other persons occupying positions at or below GS-12 (and not described above) until January 29, 1978, or until 30 days following publication of a list of positions at GS-12 or below that are exempted from reporting because they are of a nonregulatory or nonpolicymaking nature, whichever first occurs.

 At this time, the following are considered supervisory employees and should so indicate on page 1 of Form DOE-459:

 
(1) an individual holding a position in the Department at GS-16, GS-17, or GS-18 of the General Schedule or at level I, II, III, IV, or V of the Executive Schedule, or who is in a position at a comparable or higher level on any other Federal pay scale, or who holds a position pursuant to subsection (b) or (d) of section 621 of the Act, or who is an expert or consultant employed pursuant to section 3109 of title 5, United States Code, for more than ninety days in any calendar year and receives compensation at an annual rate equal to or in excess of the minimum rate prescribed for individuals at GS-16 of the General Schedule;
 
(2) the Director or Deputy Director of any State, regional, district, local, or other field office maintained pursuant to section 650 of the Act;
 
(3) an employee or officer who has primary responsibility for the award, review, modification, or termination of any grant, contract, award, or fund transfer within the authority of the Secretary; and
 
(4) any other employee or officer who has been determined to be a supervisory employee by the Secretary or his designee and who has been so advised.

 A list of entities determined to be energy concerns is not yet available. Therefore, in completing Form DOE-459 each employee is expected to rely on his or her own judgment as to what should be reported in Part A of the form as falling within the definition of energy concern set forth on page 2 of the form. It should be recognized, however, that all other interests are required to be reported in Part B of the form, and responsibility for final determination as to what is an energy concern rests with the Secretary.

 Eric J. Fygi

 Acting General ...


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