Adams and Becker, Circuit Judges, and Newcomer, District Judge.*fn*
This proceeding requires us to determine whether the Secretary of Labor properly awarded backpay to two workers who allegedly were wrongfully furloughed by the City of Philadelphia while employed under the Comprehensive Employment and Training Act (CETA).*fn1 Because it appears that the Administrative Law Judge (ALJ) misunderstood the legal standard for awarding backpay to CETA employees, we remand.
As part of the termination of some 300 CETA positions, Gerald Savino and Philip Robinson were furloughed by the City of Philadelphia in March 1980. These employees filed a complaint, alleging inter alia that their termination violated the regulation requiring that CETA employees receive the same treatment as comparable non-CETA civil servants. 29 C.F.R. § 98.24 (1980). In particular, the employees claimed that the City disregarded the Pennsylvania Veterans' Preference Act, 51 Pa. Cons. Stat. § 7107, by failing to include their years of military service in calculating their seniority.
An Administrative Hearing Examiner determined that the employees should have received seniority credit for their military service and that they would not have been laid off from March through September 1980 if their seniority had been correctly calculated. The Hearing Examiner ordered the City to reinstate both employees, but did not mention backpay for the period of the improper furlough. A Grant Officer affirmed the Hearing Examiner, holding that the denial of backpay was within the Examiner's discretion so long as the employees were not discriminatorily terminated.
On appeal to an ALJ, however, the denial of backpay was reversed. The ALJ's disposition, ordering reinstatement and backpay, became the final decision of the Secretary of Labor, 20 C.F.R. § 676.91(f) (1982), and the City now petitions this Court for review. 29 U.S.C. § 817(a) (Supp. V 1981). Before us, the City contends that the ALJ erred in awarding backpay.*fn2
Without question, the Secretary of Labor has the authority to award backpay in appropriate circumstances. In its 1978 amendments to the CETA legislation, Congress expressly authorized the Secretary "to order such corrective measures, as necessary, with respect to . . . . [an] aggrieved person" who has been "unlawfully denied . . . . a benefit to which that person is entitled under the provisions of this Act or the Secretary's regulations." CETA Amendments of 1978, Pub. L. No. 95-524, § 106, 92 Stat. 1926, codified at 29 U.S.C. § 816(f). Pursuant to this new legislative authority, the Secretary promulgated 20 C.F.R. § 676.91(c) (1979), specifying backpay as one permissible remedy for unlawfully discharged CETA workers:
Orders for relief may provide for . . . . such . . . . sanctions (including awards of back pay) . . . . as are consistent with and will effectuate the purpose of the Act and regulations issued thereunder . . . .
Even under pre-1978 law, which was silent regarding backpay, Courts of Appeals have upheld the Secretary's authority to order this form of relief. Comm. of Kentucky Dept. of Human Resources v. Donovan, 704 F.2d 288 (6th Cir. 1983); City of Boston v. Secretary of Labor, 631 F.2d 156 (1st Cir. 1980) (the Secretary's authority is assumed); but see City of Great Falls v. U.S. Dept. of Labor, 673 F.2d 1065 (9th Cir. 1982).
The issue then, is whether the standard applied by the ALJ in determining the propriety of backpay in the present case is consistent with the grant of authority to order this remedy. As we read his opinions, the ALJ believed that an improperly furloughed CETA employee should ordinarily be granted backpay:
In view of the interest fostered by back pay relief and the purpose which it serves, an award may be appropriate in cases of this type absent circumstances which render it inequitable. The record before me fails to reveal circumstances ...