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NATIONAL COUNCIL OF CSA LOCALS AFGE v. SCHWEIKER

October 21, 1981

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



The opinion of the court was delivered by: PENN

MEMORANDUM

This case is now before the Court on plaintiff's motion for a preliminary injunction. *fn1"

  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 ...


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