The U.S. Court of Appeals yesterday told the Department of Labor that it has to give the public advance notice before it makes any substantial changes in the way it calculates unemployment statistics -- computations used for doling out billions of dollars in federal funds to state and local governments.
The court acted in a case brought by Maryland officials who claimed that the state and 12 countries lost a total of nearly $2 million in federal money in 1976 when the Labor Department -- without notice -- changed its methods for figuring umemployment levels.
Although the Labor Department eventually authorized Maryland to recoup even more money than it lost, the state still protested in court that the government should be required to give advance notice of such changes in the future.
The appeals court, in a unanimous decision, agreed with Maryland and reversed an earlier decision by a U.S. District Court Judge. The appeals court ruling is expected to give state and local officials new opportunities to challenge any changes in umemployment calculations that could effect their level of federal funding.
Senior Judge David L. Bazelon, writing for the court, rejected the Labor Department's argument that it collects unemployment data merely for informational purposes and should not be subject to laws or administrative procedures that would require public comment before any changes could be made in that process.
Bazelon said, however, that since the allocation of millions of dollars to local governments under the Comprehensive Employment and Training Act depends on the Labor Department's employment statistics, the method of calculating those statistics becomes a critical factor in an actual decision-making process. As such, Bazelon, said, changes in that method are subject to public comment.
Finally, Bazelon concluded that since the amount of money available under the CETA program hinged on the methods for determining unemployment statistics, the agency action in changing those methods jeopardized the recipients' rights and thus must be subject to public comment before they become effective.
The court's decision reinforces congressional language included in a conference report two years ago stating that public comment should be sought before such changes are made.