United States District Court, Northern District of Illinois, E.D
December 22, 1981
LORRAINE B. PRATTE, PLAINTIFF,
NATIONAL LABOR RELATIONS BOARD, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Lorraine Pratte ("Pratte") has sued the National Labor Relations Board
("NLRB"), its General Counsel and the Regional Director of its Region 13
(headquartered in Chicago), seeking injunctive and declaratory relief
because of NLRB's claimed unlawful revocation of Pratte's appointment as
a staff lawyer. By agreement of the parties, their written submissions
(the verified Complaint and affidavits) constitute the evidentiary record
for this Court's ruling under Fed.R.Civ.P. ("Rule") 65(a). In accordance
with Rule 52(a) this memorandum opinion and order reflects the Court's
findings of fact and conclusions of law.
Findings of Fact
Pratte is a June 1981 graduate of Harvard Law School, where she
established a fine record (among other things, as Articles Editor of the
Civil Rights-Civil Liberties Law Review). Because she decided on labor
law as a field of interest, she applied to NLRB's national office and the
Chicago Regional Office.*fn1 In mid-January 1981*fn2 NLRB offered her
employment as a Law Clerk-Trainee (Grade GS-9) at an initial salary of
$18,585 a year. Pratte accepted the offer with alacrity, turning down a
higher-paying position as an Assistant District Attorney in Philadelphia
and abandoning any other placement efforts.
On February 3 (just a week after Pratte's prompt acceptance) the same
NLRB person who had extended the offer*fn3 wrote to say NLRB was "unable
to honor the written commitment which was made to you after November 5,
1980." That action was occasioned by President Reagan's January 20
announcement of an immediate hiring freeze for all civilian employees of
government agencies. But the letter went on:
We regret the necessity for this action; however, we
will place your application in the group who will be
given first priority for positions with this Agency
when we are able to renew our hiring program. The
instructions from the Office of Management and budget
provide that agency heads may request exemptions from
the freeze where they believe that circumstances
warrant such action. We intend to submit such a
request to OMB concerning your situation and we will
advise you of the results once they are received from
We sincerely regret any inconvenience that the hiring
freeze has placed on you, and we hope that your
interest in working for the NLRB will continue.
True to its word, NLRB wrote Pratte March 17:
In my letter of February 3, 1981, I regretably [sic]
had to advise you that this Agency could not honor the
written offer of employment which had been made to you
after November 5, 1980. I am now pleased to inform you
that the National Labor Relations Board has recently
received its new authorized personnel ceilings for
Fiscal Year 1982 from the Office of Management and
Budget. We are now able to extend offers of employment
for professional positions.
It therefore offered employment on the same terms as before. Just as with
the initial offer the Toback letter said:
You will be assigned to our Chicago Regional Office,
and we will expect you to enter on duty on or about
October 5, 1981, which is the beginning of Fiscal Year
1982. If our budget permits, some new employees may be
able to enter on duty prior to October 5, 1981. If you
accept our offer, please indicate when you will be
available to commence work.
Toback's letter was confirmatory of the telephone call that had been
made to Pratte by NLRB's Deputy General Counsel March 10. At that time
she was told to "hold on" if she could because NLRB had been informed by
the Office of Management and Budget that "the money would be coming
through." Just three days after receiving the new Toback letter Pratte
visited his office in Washington and drafted and delivered a handwritten
acceptance letter. She had already forwarded the requested security
clearance forms at the time of the original offer, so that she understood
all systems were "go."
By letters dated August 5 and August 31 NLRB confirmed Pratte's
appointment. Its August 5 letter spoke in future terms ("You will be
appointed as a Law Clerk-Trainee . . . effective October 5, 1981"). August
31 converted that to the present:
This will confirm your Accepted Appointment as Law
Clerk (Trainee), GS-904-09, $18,585 per annum.
Assignment is in our Chicago Regional Office located
at the Everett McKinley Dirksen Building, 219 South
Dearborn Street, Chicago, Illinois. This is a
sensitive position and the appointment is subject to a
Full Field Investigation under Executive Order 10450.
It is also subject to an Administrative Trial Period
of One year. All other conditions will remain as
stated in Mr. Toback's letter to you dated 8-5-81.
A tentative reporting date of October 4, 1981, has
been set pending receipt and approval of your medical
We look forward to your joining the National Labor
Relations Board staff.
All the conditions referred to in the August 5 and August 31 letters have
If Pratte had been advised that the appointment was subject to any
other conditions (most specifically, possible rescission on the basis of
potential future budget reductions) she would not have accepted the
appointment. But understanding the appointment to be unconditional (except
for the purely ministerial acts that offered no problem) she did accept,
and her reliance on the appointment was extensive and uncontradicted:
(1) of course she ceased to seek other employment.
(2) Based on NLRB's requirements for lawyers, Pratte
took the bar examination in the District of Columbia,
which would permit her to practice as a government
lawyer anywhere. That necessarily made her a less
marketable commodity (particularly in the litigation
area in which her primary interests lie) in the
private practice in Illinois, where she found herself
compelled to look for employment after NLRB's later
(3) Having been advised of the need for NLRB
regional office staff lawyers to travel as part of
their work, Pratte purchased an automobile.
(4) On September 26 Pratte drove to Chicago. After
checking with the Region 13 office and receiving
confirmation of her official October 5 reporting
date, she signed a one-year apartment lease in
One day after NLRB's confirmation of her official reporting date, and
the same day on which she had signed her lease, Pratte received a
telephone call from NLRB's Washington office stating her appointment was
being "revoked" as a result of a September 24 speech by President Reagan
in which he announced he would ask Congress to approve additional budget
reductions for certain federal agencies for fiscal year 1982. On
September 30 she received a billet-doux from Toback predicated on the
proposed cut in appropriations and stating:
Therefore, we must inform you that we must rescind our
offer of employment in which you were asked to report
for duty on October 5, 1981.
This "Dear John" letter concluded in much the same tone as the earlier
February 3 "unable to honor the written commitment" letter:
We very much regret the necessity for this action.
Please be assured that you will be placed in the group
of individuals who will be given priority
consideration for positions with this Agency when we
are again in a position to permit additional
applicants to report for duty. We sincerely regret any
inconvenience which this current hiring situation has
caused you, and we appreciate your interest in working
for the National Labor Relations Board.
Finding herself unemployable as an Illinois lawyer, Pratte was able to
obtain a temporary paralegal job. As soon as she was able to confer with
counsel and prepare a Complaint and supporting documents she instituted
Conclusions of Law
There is of course no dispute as to the familiar criteria to be
employed in deciding on the propriety of preliminary injunctive relief.
They were again repeated by our Court of Appeals this month in Machlett
Laboratories, Inc. v. Techny Industries, Inc., 665 F.2d 795 (7th Cir.
1981), and require a plaintiff to show that (adapted to this case):
(1) [she] has at least a reasonable likelihood
of success on the merits,
(2) [she] has no adequate remedy at law and will
otherwise be irreparably harmed,
(3) the threatened injury to her outweighs the
threatened harm the preliminary injunction may cause
the defendants, and
(4) the granting of the preliminary injunction
will not disserve the public interest.
At the threshold the Court must inquire into the reasonable probability
of plaintiff's success on the merits. Though many of our Court of
Appeals' decisions list the factors in a different sequence, O'Connor v.
Board of Education, 645 F.2d 578
, 580 (7th Cir. 1981) has made that
On that threshold issue the government's presentation does it little
more credit than its actions as to Pratte. Its responsive memorandum
(G.Br. 10-15) deals with the arcane mysteries of "appointment" by the
federal government (a necessary condition of becoming an "employee" as
defined in 5 U.S.C. § 2105 (a)) and concludes by explaining why
Beacom v. EEOC, 500 F. Supp. 428 (D.Ariz. 1980) is distinguishable, or if
not, should not be followed. But it fails utterly to discuss or even
mention, in that context,*fn4 the most recent decision by a Court of
Appeals, National Treasury Employees Union v. Reagan, 663 F.2d 239
(D.C.Cir. 1981), which discusses, distinguishes and rejects each of the
several authorities on which the government seeks to rely.
It is unnecessary to repeat the analysis in National Treasury
the reasons there stated at length, the Court finds that the Form 50 on
which the government relied there as here (a form self-characterized as a
"Notification of Personnel Action") is not itself the personnel action
— the document constituting the "appointment." Indeed Form 50's
title itself tends to confirm that (though that is but one of the factors
pointing to the Court's conclusion).
National Treasury Employees is a thoughtful, well-reasoned and
comprehensive opinion. This Court will not essay to reinvent the wheel,
but will instead quote the persuasive and relevant portion of the opinion
stating (at 245-246):
It appears to us that the federal government played
hide-and-seek with job-seekers, assuring them that
jobs awaited them and only later — on occasion,
after the prospective employee had acted on the
assurance of a job — reversing itself. Not one
of the approximately 20,000 members of the class which
is the subject of these cases [in our case, Pratte]
received a letter stating that he had been
conditionally selected, subject to budgetary factors.
Not one received a letter stating that he had been
conditionally selected, subject to the discretion of
the appointing officer to change his mind at any time
prior to the completion of the Standard Form 50. All
class members received letters stating that they had
been selected for employment and should report for
work on a certain date in the future.
Underlying this system of apparent government
indifference to the consequences of its actions has
been the fiction of the Form 50, backed by predictions
of the dire consequences that would follow if the
fiction were to be retired. A fiction supported by
speculation cannot, however, bear the burden urged
upon it by the Government. On the basis of our
analysis of the appointment procedures in use in these
cases, as established by the Personnel Manual and the
other evidence, we believe that the completion of the
Form 50 was not the "last act" required of the
appointing authorities within the meaning of Marbury.
The members of the class before us were appointed to
the positions for which they were unconditionally
Just so Pratte received a letter from NLRB saying in essence, "You are
hired, You are one of our lawyers," without the slightest reference to
any aspect or condition of budgetary restraints. For the reasons so well
expressed in National Treasury Employees and fully applicable here, the
Court holds that Pratte was in fact "appointed" by her acceptance of the
August 5 Toback letter and the August 31 confirmation of appointment.
That however brings Pratte only part-way home. Because Pratte had not
entered into "performance of the duties of [her] position" before NLRB
reversed its field and told her not to report, she was not technically an
"employee" within the definition of 5 U.S.C. § 2105 (a). That meant
that she was lacking the statutory protection afforded "employees." Baker
v. United States, 614 F.2d 263, 266 (Ct.Cl. 1980) so teaches, and
National Treasury Employees confirmed that proposition and went on to
define the nonstatutory protection of an appointee. It said (at 247), "An
appointee remains appointed, of course, until [her] appointment is
properly revoked." And it continued (id. n. 13), "It would appear that a
properly authorized refusal to allow [an appointee] to enter on duty on
the date previously selected would be an effective revocation."
Certainly NLRB's September 29 letter was such a "refusal." Thus the
question was whether the refusal — the revocation — was
"proper" as National Treasury Employees would require.
National Treasury Employees provides no answer beyond that stage of the
inquiry. At that point the opinion went on to deal with the class
issues. It did however recognize quite specifically that (at 253), "It is
possible that there exists a third group of class members: those whose
appointments were not properly revoked and who did not enter onto duty."
Accordingly this case resolves itself to the question of the propriety
of the attempted revocation, really a question of timeliness. Its answer
depends on whether detrimental reliance of the type that would give rise
to an estoppel, occurring before an attempted revocation, precludes the
revocation from being timely and thus proper.
Our Court of Appeals is not among those that use the simplistic
terminology that the government may never be estopped. Instead it
recognizes estoppel against the government in appropriate circumstances,
although it urges great caution. Gressley v. Califano, 609 F.2d 1265,
1267-68 (7th Cir. 1979); United States v. Fox Lake State Bank,
366 F.2d 962, 965-66 (7th Cir. 1966).
This opinion has already identified Pratte's substantial reliance on
her appointment. She ceased seeking other employment. She took the
District of Columbia bar examination in reliance on NLRB's requirements,
rather than taking the bar in the jurisdiction where she contemplated
working — this made her much less employable locally in private
practice. Because of the travel requirements for an NLRB staff attorney
she bought an automobile. She signed a one-year apartment lease after
speaking with NLRB personnel just a week before she was due to report
— and after having been given no warning.
Reliance then is established. Estoppel however requires that reliance
be reasonable. On that score it seems to the Court that it is bizarre in
the extreme for the government to say on the one hand that Pratte should
have been on notice of a possible repeat performance of the original
offer and withdrawal, and on the other hand that the government was not.
What the government really advances is the extraordinary notion that the
agency had no reason to believe that the budgetary state of affairs would
change so drastically in September, yet may hold Pratte to a more strict
standard than that. Which of the parties really knew the facts? Had NLRB
stated the risk or had it included any caveat when it renewed the offer
and later confirmed Pratte's appointment, she would not have taken the
job. Instead NLRB's only reference to budget was not in restrictive, but
rather in expansive, terms. Its March 17 offer effectively said, "Maybe
if we get more money you can report earlier." It gave her every reason to
believe that the original problem that had caused the withdrawal of its
initial offer had been resolved. Indeed it was NLRB and not Pratte that
was on notice of the potential of reduction by June 1981, when Congress
enacted a final budget for fiscal 1981 rescinding $1 million out of
NLRB's prior approval. Nevertheless it sent her a confirmation of
appointment nearly three months later.
Frankly the Court considers the government's position somewhat.
disingenuous. NLRB induced action by Pratte when that suited its needs.
This Court's many years as a law firm hiring partner make plain what NLRB
did here: When hiring is done it is done pursuant to the employer's
contemplated needs, and with the firm expectation that the hired
associate will in fact report for work. Any defeated expectation can
create serious disruption for the employer in a seller's market. Today
however we are in a buyer's market for young law graduates, and it
appears quite obvious that NLRB has seriously disadvantaged Pratte.
It is however not necessary to decide the ultimate issue of whether
estoppel will lie. At this point in the proceedings the only question is
whether Pratte has demonstrated a reasonable likelihood of success on
that issue. That, it seems to the Court, cannot be gainsaid in light of
the Seventh Circuit decisions on estoppel, the Beacom case and the
holding in National Treasury Employees.
Determination of the reasonable likelihood of success also controls the
question of what constitutes the status quo, an issue on which each
party's argument is somewhat circular. NLRB's assertion that the status
quo is non-appointment hinges on its argument that Pratte was never
"appointed." In much the same way Pratte's contention that the government
is seeking to change the status quo, while she is trying to preserve it,
hinges on her argument that she was "appointed."
With the threshold having been crossed, we turn to the "adequate remedy
at law" or "irreparable harm" issue. In this case, that is peculiarly
within the ken of lawyers: We are dealing with the impact on a lawyer of
this kind of conduct. Many of the major burdens on Pratte, it is true,
are financial, though incidentally some might pose difficulties in terms
of recovery. Though she wouldn't otherwise have bought a car, presumably
she got value for what she paid. Much the same applies to her apartment
lease. Presumably her lost earnings during the employment period would be
recoverable if she succeeds on the merits.
But how do remedies at law deal with the long-term career impact, the
loss of placement opportunities,*fn5 the loss of valuable experience and
of promotion opportunities? Law students with top records from top-ranked
national law schools are highly salable commodities, but that is much
less true of a law graduate forced into a market at a time when hiring
generally has become more uncertain and in an unseasonable period in
relation to the normal hiring season. All those factors, amplified as
they are by Pratte's decision as to which bar exam to take (a decision
made in reliance on NLRB), satisfy the second condition for preliminary
injunctive relief. This is much like the familiar situation in which a
wrongdoer is not heard to assert that the plaintiff can't show harm,
where it is really the wrongdoer's own conduct that created the
difficulty in doing so.
As to the third factor, the balancing of harms, the government argues
that the harms just outlined as to Pratte are outweighed by harms to the
government. That contention is without merit. First, neither side has
focused on one significant factor, though Pratte does argue that the
government predicates its decision not on present harm (at this point
NLRB still has the funds needed to honor its hiring commitments in
hand*fn6) but on possible future effects. More to the point is that if
Pratte is successful on the merits, NLRB is liable for her salary in
damages in any case. Thus any harm to NLRB arising out of an injunction
is really no different from the damages it confronts by reason of the
claim. Second, the current decision is of very limited scope.
Circumstances applicable to Pratte may well not apply to anyone else, let
alone to the entire group of appointees NLRB has now sought to reject. In
any balancing of harms the Court then concludes Pratte must prevail.
Finally the Court turns to consideration of the public interest. There
is a paramount public interest in government responsibility — a
quality singularly lacking on the uncontroverted facts here. What
countervailing public interest does the government advance? Teaching
young lawyers to watch out when they deal with government? If the public
interest lies in promoting the orderly operation of the agency, NLRB
might better address its arguments to the administration and to Congress
rather than to Pratte or this Court.
All criteria for issuance of a preliminary injunction have been met.
One last comment may nevertheless be in order. In substantial part the
government seeks to rely on authorities that deny preliminary injunctive
relief where complete retroactive relief is available in administrative
proceedings, or in judicial review of such proceedings. But Pratte
occupies the no-man's land*fn7 between appointment and service: She
dcesn't have the benefit of administrative proceedings, precisely because
she is not an "employee." Consequently the Court concludes that the
otherwise-existing right to a preliminary injunction is not lost for the
reason advanced by the government.
Rule 65(a) has been dealt with, but Rule 65(c) remains. Because
Pratte could not provide the funds necessary for any significant bond
required under that Rule, and NLRB has not made any showing of damages in
any case, the Court determines that no bond should be required under Rule
65(c) and waives the provision of such a bond.
Counsel are requested to prepare and submit a draft order granting a
preliminary injunction as prayed in the Complaint and approved in this