HUD Legally Exempted PHA from Civil Service Regulations

Facts: Employees of the New Orleans Housing Authority claimed that HUD improperly exempted the housing authority from Louisiana civil service laws and that the Louisiana Civil Service Commission (LCSC) improperly acceded to HUD's action, which resulted in the government agencies discriminating against them. The federal district court ruled in favor of HUD, dismissing the case. The employees appealed.

Decision: The appeals court upheld the lower court's decision in favor of HUD.

Reasoning: HUD's action in exempting the housing authority from civil service regulations was based on a memorandum that outlined various impediments to the authority's mission, focusing especially on compensation limits that kept the authority from hiring the employees it needed, such as project managers to rebuild housing stock depleted by Hurricane Katrina, and substantial administrative burdens involved in both retaining necessary employees and terminating low-performing or unneeded employees, the appeals court reasoned.

HUD properly exempted the housing authority from Louisiana's civil service laws, the appeals court concluded. Even assuming LCSC had a duty to try to convince HUD to change its decision to exempt the housing authority, the employees pointed to no evidence that such efforts would have succeeded, the court concluded.

• McGowan v. U.S. Department of Housing and Urban Development, July 2010