PRIVATE INDUS. COUNCIL OF SOUTHEAST LOS ANGELES, INC. v. Employment Dev. Dept.

The California Employment Development Department, which dispenses federal job training funds under the Job Training Partnership Act (JTPA) issued a directive requiring local job training agencies to spend at least 80 percent of the funds allocated to them in a given year or “face recapture” of the funds. Petitioner contends this directive is invalid and unenforceable because it was not promulgated as a regulation under the Administrative Procedures Act and because it conflicts with a controlling provision of the JTPA which gives agencies three years to spend all the job training funds allocated in a given year. We agree with petitioner’s contention the directive is invalid because it violates binding federal law. We do not reach the Administrative Procedures Act issue.

Facts and Proceedings Below

Petitioner Private Industry Council of Southeast Los Angeles County, Inc. (Council) is a nonprofit corporation created to administer federal job training funds in southeast Los Angeles County pursuant to the JTPA, 29 United States Code section 1501 et seq.

Respondent Employment Development Department (EDD) is the state agency charged with the duties of establishing regulations…