45 CFR §261.70

1. (a)An adult taking part in a work activity outlined in § 261.30 may not fill a vacant employment position if:
   1. (1)Another individual is on layoff from the same or any substantially equivalent job; or
   2. (2)The employer has terminated the employment of any regular employee or caused an involuntary reduction in its work force in order to fill the vacancy with an adult taking part in a work activity.
2. (b)A State must establish and maintain a grievance procedure to resolve complaints of alleged violations of the displacement rule in this section.
3. (c)This section does not preempt or supersede State or local laws providing greater protection for employees from displacement.