National Treasury Employees Union v. HornerNational Treasury Employees Union v. Horner
MEMORANDUM OPINION AND ORDER
This opinion is the second concerning plaintiffs’ challenge to the government’s August 31, 1982 abolition of the Professional and Career Examination (the PACE) and its decision to except from the competitive service the 118 federal jobs formerly governed by that examination. In an earlier decision,
National Treasury Employees Union v. Horner,
I. Judicial Review
Defendants contend that defendant Office of Personnel Management’s (OPM’s) decision to place the former PACE positions in the excepted service is an action committed to agency discretion and therefore not subject to judicial review. Under the Administrative Procedure Act (APA), agency action is subject to review except where precluded by statute, 5 U.S.C. § 701(a)(1), or where that action “is committed to agency discretion by law.”
Id.
at § 701(a)(2). This latter exception applies “where ‘statutes are drawn in such broad terms that in a given case there is no law to apply.’ ”
Citizens to Preserve Overton Park v. Volpe,
The President may prescribe rules governing the competitive service. The rules shall provide, as nearly as conditions of good administration warrant, for—
(1) necessary exceptions of positions from the competitive service.
The only limitations placed on OPM’s authority to excеpt positions from the competitive service are the requirements that exceptions be consistent with “good administration,” and “necessary.” Characterizing these criteria as amorphous and open-ended, defendants argue that the statute provides “no meaningful standard against which to judge the agency’s exercise of discretion,”
Heckler v. Chaney,
The exception for action “committed to agency discretion,” however, is a very narrow one,
Overton Park,
Today’s civil service laws trace their origin to the Pendleton Civil Service Act of 1883, 22 Stat. 403, which “provided for the creation of a classified civil service and required competitive examination for entry into that service.”
Arnett v. Kennedy,
The single, simple, fundamental, pivotal idea of the whole bill is, that whenever, hereafter, a new appointment or a promotion shall be made in the subordinate civil service in the departments or larger offices, such appointment or promotion shall be given to the man who is best fitted to discharge the duties of the position, and that such fitness shall be ascertained by open, fair, honest, impartial competitive examination. The impartiality of those examinations is to be secured by every possible safeguard. They are to be open to all who choose to present themselves. There will be tests of fitness of the applicant for the particular place to which he aspires.
Congress has retained the principle of appointment by merit throughout its various amendments and compilations of civil service law. In enacting a set of merit system principles to govern federal personnel management, Congress reiterated that the “selection and advancement [of such personnel] shall be determined solely on the basis of relative ability, knowledge, and skills, after fair and open competition.” 5 U.S.C. § 2301(b)(1) (emphasis supplied). Section 3304 confers upon the President the authority to prescribe rules “which shall provide, as nearly as conditions of good administration warrant, for ... open, competitive examinations for testing applicants for appointment in the competitive service____” 5 U.S.C. § 3304(a)(1) (emphasis supplied). Congress has defined the competitive service as ‘‘all civil service positions in the executive branch, except ... positions which are specifically excepted.” 5 U.S.C. § 2102(a)(1)(A) (emphasis supplied). And in granting the President the authority to except positions from the competitive service, Congress required that the exceptions be “necessary,” 5 U.S.C. § 2303, not merely convenient or desirable.
Viewed against this backdrop, OPM’s discretion to except positions is not so broad as to render its exercise unreviewable. Certainly the requirement that such exсeptions be “necessary” is not so amorphous or vague that this court lacks any meaningful standard with which to judge the agency’s decision. Courts have reviewed agency action taken under far more general statutory requirements than that involved here. Thus, in
National Treasury Employees Union v. Campbell,
II. The Agency Action
Plaintiffs claim OPM violated sections 3302(1) and 3305 of title 5 and acted arbitrarily and capriciously in excepting the positions in question from the competitive service. Section 3302(1), of course, is the grant of statutory authority permitting the President to make “necessary exceptions” from the competitive service. In justifying its decision to exercise this power and to convert the positions to excepted service status, OPM stated that it was obligated to abolish the PACE under the
Luevano
Consent Decree,
see Luevano v. Campbell,
The “arbitrary and capricious” standard of review, of course, is a deferential one. A court may not set aside an agency’s decision that is rational, based on consideration of the relevant factors and within the agency’s scope of authority.
Motor Vehicle Mfrs. Ass’n v. State Farm Mutual Auto. Ins. Co.,
Defendants’ first justification for their decision is that they were obliged by the
Luevano
Consent Dеcree to abolish the PACE. This of course explains why the PACE itself was eliminated, but it does nothing to demonstrate that alternatives to that examination were too costly or otherwise unavailable. The Decree itself gave
At bottom, the underlying justification for defendants’ decision to except the jobs in question from the competitive service is cost. The expense of developing and validating alternatives to the PACE, defendants claim, was prohibitive and unwarranted in view of the reduction in hiring anticipated at the time. It is true that the number of people hired between October, 1982 and December, 1983 into the PACE positions in question — some 2,089 persons — was slightly less than half the number hired the year before. Nonetheless, this figure is not an insubstantial one, and as defendants concede, the number of external hires has increased in the years since. Thus, a considerable number of people have become federal employees without the benefits of competitive service status, see October 15, 1986 Opinion at 4-5 (discussing significance of that status), and without demonstrating their fitness for such employment through “fair and open competition” as Congress intended. 5 U.S.C. § 2301(b). Defendants nevеrtheless maintain that “conditions of good administration” warrant such hiring, and that the prohibitive cost of implementing alternative tests makes the use of Schedule B hiring necessary. They have offered nothing in the way of concrete proof, however, in support of that claim, either at the time of the decision or during this litigation. Indeed, despite plaintiffs’ challenge to their cost justification as a bald and unsubstantiated claim, defendants have come forward with no figures indicating what the cost of alternative tests would be, nor any other evidence demonstrating that they undertook any sort of cost-benefit analysis.
Indeed, defendants argue that budgetary matters are peculiarly within an agency’s expertise and discretion, and are therefore singularly ill-suited to judicial resolution. The cases they cite in support of this proposition, however, involved agency decisions not to regulate activities otherwise within their jurisdiction. In
WWHT, Inc. v. FCC,
III. Relief
In their complaint, plaintiffs ask this court to invalidate and enjoin OPM’s regulation creating non-competitive Schedule B appointment authority for GS-5/7 PAC positions; to order OPM to establish and administer competitive examinations for those positions; to convert all employees appointed to Schedule B GS-5/7 PAC positions to competitive service GS-5/7 PAC positions; to retroactively promote, with back pay, all GS-5/7 Schedule B appointees who would have been eligible for career ladder promotions had they been appointed to competitive service positions and to credit them with full competitive service tenure; and to award reasonable attorneys’ fees.
In view of the Court’s determination that OPM’s placement in the excepted service of all 118 job categories formerly governed by the PACE was arbitrary and capricious, plaintiffs are cleаrly entitled to the declaratory and injunctive relief they seek concerning the challenged regulation. In addition, it is obvious that any such declaration and injunction must also be accompanied by an order directing OPM to establish alternative examinations. Today, six years after the
Luevano
Consent Decree was signed and four and a half years after defendants abolished the PACE, OPM has developed tests covering only four of the 118 jobs formerly subject to the PACE requirement.
3
Although defendants’ compliance with that Decree is not presently before the court, it is relevant for purposes of determining how quickly defendаnts must implement new testing procedures to note that OPM agreed to develop alternative, job specific examinations within three years of the Decree’s January 18, 1982 effective date.
Luevano
Consent Decree
Plaintiffs’ claims for retroactive relief, however, stand on a different footing. As previously noted in the October 15, 1986 Opinion, the Supreme Court squarely held in
United States v. Testan,
Plaintiffs here contend that they are entitled to retroactive promotions and back pay if they can “clearly establish” that they would have bеen promoted had they been properly classified initially as competitive service employees.
6
In so arguing, they rely on
Boese v. Dep’t of the Air Force,
Finally, even if this court were to adopt the Boese court’s “clearly establish” test, plaintiffs could not satisfy it here. As plaintiffs themselves state in their opening brief, competitive service employees “are eligible for promotion if they satisfy the requisite requirements of [one] year’s time in grade and [one] year of qualifying experience, and if they have demonstrated the ability to perform at the higher grade." Plaintiffs’ Motion for Summary Judgment at 14 (emphasis added). This last, underscored, requirement makes unmistakably clear that promotions are not mandated, but simply discretionary. Indeed, plaintiffs concede that “career ladder promotions to Grade 9 in the competitive service [are] not ... automatic____” Id. at 14 n. 15. Thus, plaintiffs cannot clearly establish that they would have been promoted to the GS-9 level but for defendants’ wrongful classification, for even if they had been appointed to the competitive status initially, they would not have been entitled to an automatic or mandatory promotion upon completion of one year’s service. The discretion involved in such promotion decisions necessarily defeats any showing of entitlement as contemplated by the Boese dicta. 7
As the Supreme Court made clear in Testan, “[t]here is a difference between prospective reclassification, on the one hand, and retroactive reclassification resulting in money damages, on the other.”
Accordingly, for all the foregoing reasons, it is this 27th day of February, 1987
ORDERED that plaintiffs’ motion for summary judgment be and it hereby is granted and defendants’ cross-motion for summary judgment be and it hereby is denied; and it is
FURTHER ORDERED that within six (6) months from the date of this Order, defendant OPM must implement a fair, open and competitive examination, or examinations, to govern appointment to PAC positions currently governed by the Schedule B hiring authority provided in 5 C.F.R. § 213.3202(1), and must place such positions in the competitive service; and it is
FURTHER ORDERED that defendants’ action placing the 118 PAC positions formerly governed by the PACE in the excepted service and creating Schedule B hiring authority to fill vacancies in those positions be and hereby is declared arbitrary and capricious; and it is
FURTHER ORDERED that defendants be and they hereby are permanently enjoined from exercising the Schedule B hiring authority provided in 5 C.F.R. § 213.-3202(1) after six (6) months from the date of this Order; and it is
FURTHER ORDERED that within ninety (90) days from the date of this Order, defendants must convert to competitive service status all persons hired since August 31, 1982 into the PAC positions formerly governed by the PACE who currently remain еxcepted service employees; and it is
FURTHER ORDERED that within ninety (90) days from the date of this Order, plaintiffs are to file any motion concerning their entitlement to, and the amount of, an award of attorney’s fees; defendants shall file their opposition, if any, within fourteen (14) days of plaintiffs’ filing; and plaintiffs shall file any response within seven (7) days of said opposition.
In view of the court’s rulings, plaintiffs need not move for class certification. A separate judgment accompanies this Order.
Notes
. Plaintiffs also claim that section 3305 mandates bi-annual examinations, and provides no exception for cost. Section 3304, however, states that the President “may prescribe rules which shall provide ... for open competitive examinations____”5 U.S.C. § 3304(a)(1) (emphasis supplied). Section 3305(a) provides that OPM "shall hold examinations for the competitive service at least twice a year in each State and territory ... where there are individuals to be examined.” 5 U.S.C. § 3305. Defendants argue, and the court agrees, that the legislative history, statutory structure and prior agency construction and practice make clear that section 3305 was designed to insure that, when examinations are held, they are administered across the nation, so as not to disadvantage those living far from Washington, D.C. It does not require OPM, however, to conduct two examinations a year, regardless of the federal government’s employment needs. See U.S. Civil Service Commission, Third Ann.Rep. 40 (1886) ("The examinations have not for their object to conduct an endless number of competitions for mere curiosity, or to examine as many persons as may be pleased to enter them regardless of the needs of the public service").
. Defendants suggest that there can be no serious quarrel with their decision to eliminate, sooner rather than later, a test found to have discriminatory impact on minority groups. That, of course, was the express goal of the Luevano Consent Decree. That Decree, however, also called for the development of alternatives to the PACE. While the government’s compliance with that Decree is not presently before the court, it is somewhat disingenuous for defendants to rely on one goal of the Decree to justify its actions while essentially ignoring that settlement’s other goal.
. In an affidavit dated December 1, 1986, defendants claim OPM has developed and implemented 14 job-specific examinations for positions governed by the PACE. Declaration of Donald L. Holum, ¶ 17. Of these, howеver, all but four were Implemented before the Consent Decree took effect. See Federal Personnel Manual (FPM) Bulletin 213-32 at 3.
. It is also worth noting that the Decree itself anticipated one of defendants’ principal contentions in this suit, namely that "[s]ome PACE job categories have relatively few vacancies.” Luevano Consent Decree § 13(a). Rather than simply excepting these jobs from the competitive service, however, OPM agreed in the Decree to "Develop alternative examining procedures for a group of such job categories.” Id.
. In this regard, the court notes that the Luevano Consent Decree prohibits OPM from replacing the PACE with another comprehensive examination. Luevano Consent Decree § 13(a). The court’s Ordеr today in no way excuses defendants from any obligations they may have under the Decree. That Decree, in essence, defined OPM’s obligation under Title VII, while this Order concerns only the civil service laws. It hardly need be said that OPM is obliged to abide by both statutes, and may not satisfy one at the expense of the other.
. Although plaintiffs initially declined to brief this issue until after the court rendered its decision as to class certification, see Plaintiffs’ Opposition to Defendants’ Motion for Summary Judgment at 29 n. 7, they subsequently discussed the question in response to defendants’ challenge to their standing. See Plaintiffs’ Second Supplemental Memorandum Concerning Status of Case at 3-4.
. While plaintiffs have suggested that claims for back pay and retroactive promotions would vary among members of the putative class, those variations would be in the amount of back pay or the timing of promotions. The availability of retroactive relief itself, however, would not vary among members of the class. Plaintiffs do not suggest that the standards governing promotions in the competitive service from the GS-5/7 to GS-9 level differ depending on the specific GS-5/7 position, nor do OPM’s regulations indicate that there are any such variations. See FPM Chapter 315, § 1-5. Because all competitive service promotions to the GS-9 level involve the same degree of managerial discretion, none of the putative class plaintiffs could satisfy the Boese standard.