Hampe v. Butler

364 F.3d 90 (2004)

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Hampe v. Butler

United States Court of Appeals for the Third Circuit
364 F.3d 90 (2004)

Facts

Under the Trade Act of 1974 (the act), the United States Department of Labor (DOL) (defendant) contracted the Pennsylvania Department of Labor and Industry (PDOLI) (defendant) to administer a federal benefits program through which workers who lose their jobs due to outsourcing may apply for federal benefits, including the cost of job training and related travel costs if a training center is outside of the worker’s usual commute. The act required PDOLI to approve training that was appropriate and reasonably priced. DOL regulations required that training be denied if cheaper training that was sufficiently similar in quality, substance, and results was available. In reviewing requests, PDOLI applied a one-half tuition standard by which training programs were denied if the travel costs amounted to over half of the program tuition and fees if a comparable training program was available at a lower cost. Pennsylvania industrial workers (plaintiffs) applied for travel-cost reimbursement for programs over 50 miles from their homes. After signing waivers agreeing to accept only $5 per day, the workers filed suit, claiming that PDOLI’s $5 cap was an inappropriate cost-cutting mechanism and that the half-tuition standard was an improper blanket policy that resulted in automatic denial of expensive training programs. PDOLI contended that the $5 rate was negotiated in acknowledgment that the travel costs were exceptionally high. PDOLI further contended that the one-half tuition policy was not a blanket policy and permitted exceptions as appropriate. Thereafter, DOL issued guidance clarifying that the act did not permit states to negotiate travel allowances. PDOLI began paying the full cost of travel but did not reimburse the workers for costs incurred prior to the policy change. The district court concluded that no evidence was presented that the one-half tuition policy was a blanket policy. The court of appeals reversed, finding that the act did not permit agencies to place arbitrary limits on training-program travel reimbursements. PDOLI appealed.

Rule of Law

Issue

Holding and Reasoning (Fuentes, J.)

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