34:0823(139)AR - - HHS, Public Health Service, Region IV, Atlanta, GA and NTEU Chapter 210 - - 1990 FLRAdec AR - - v34 p823
[ v34 p823 ]
The decision of the Authority follows:
34 FLRA No. 139
FEDERAL LABOR RELATIONS AUTHORITY
DEPARTMENT OF HEALTH AND HUMAN SERVICES
PUBLIC HEALTH SERVICE, REGION IV
NATIONAL TREASURY EMPLOYEES UNION
February 14, 1990
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to the award of Arbitrator J. Earl Williams filed by the National Treasury Employees Union, Chapter 210 (the Union) under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Department of Health and Human Services, Public Health Service, Region IV, Atlanta, Georgia (the Agency) filed an opposition to the Union's exceptions.
In his award, the Arbitrator ruled that the grievant, a GS-4 clerical employee, was entitled to a retroactive temporary promotion with backpay for time spent performing GS-5 duties. The Union then filed a request for attorney fees, asserting that fees were warranted in the interest of justice because the Agency knew or should have known that it would not prevail in the arbitration. The Arbitrator denied the Union's request for attorney fees.
The Union contends that the Arbitrator erred in ruling that attorney fees were not warranted. We agree. For the following reasons, we will modify the Arbitrator's award to grant the grievant reasonable attorney fees in an amount to be determined on resubmission of the award to the Arbitrator.
II. Background and Arbitrator's Award
The grievant filed a grievance in which she alleged that she performed the duties of a GS-5 secretary position while assigned to a GS-4 clerk-typist position. The Agency maintained that the grievance concerned a classification matter and was, therefore, nonarbitrable. In the award on the merits, the Arbitrator held that the grievance was arbitrable. The Arbitrator found that the Agency violated the collective bargaining agreement when it did not give the grievant a temporary promotion to GS-5. He ordered the Agency to pay the grievant backpay for the difference between the GS-4 rate and GS-5 rate for the period in question.
The Union subsequently filed a petition for attorney fees with the Arbitrator. The Union contended that the grievant was entitled to an award of attorney fees under the requirements set out in Naval Air Development Center, Department of the Navy and American Federation of Government Employees, Local 1928, AFL-CIO, 21 FLRA 131 (1986). The Union maintained that an award of attorney fees was warranted "in the interest of justice." Award at 3. The Arbitrator noted that the Union relied on the five examples set forth in Allen v. United States Postal Service, 2 MSPR 420 (1980) (Allen) to illustrate what was in "the interest of justice" and noted the Union's assertion that "it was in the interest of justice to award attorney expenses and fees, for the Agency 'knew, or should have known that it would not prevail on the merits.'" Award at 3-4.
The Arbitrator noted the following arguments made by the Union to support its contention that the Agency knew or should have known that it would not prevail in arbitration: (1) by exercising its right to assign work to the grievant, the Agency knew which tasks it was assigning her; (2) the Agency clearly was aware of the relevant contract provisions, having litigated prior arbitration cases with similar issues, including one case which was cited repeatedly by the Union during the course of the grievance; (3) the grievant's first supervisor evaluated her "carefully" at the GS-5 level; (4) the grievant's second supervisor attempted to assist her in being upgraded; (5) the Step 2 official in the grievance chain concluded that the grievant had performed at the GS-5 level; and (6) the grievant's current supervisor testified that her current work as a GS-5 Secretary was identical to the work she did throughout the contested period. Award at 4.
The Arbitrator stated that the Agency agreed with the Union that the key element of the matter was whether the award of attorney fees would be in the "interest of justice" and agreed on the applicability of the Allen criteria. The Arbitrator noted the following arguments made by the Agency to support its position that the payment of attorney fees would not be in the interest of justice: (1) the testimony at the hearing showed that the grievant spent most of her time typing, rather than performing secretarial duties; (2) the grievant's first supervisor appraised her as a GS-5 Secretary, when she was a GS-4, and the grievant knew the evaluation was on the wrong basis but did not tell the supervisor; (3) to the extent that the grievant was obtaining secretarial experience during the period in question, she was required to update her work experience in her Official Personnel Folder and there is no way the Agency could have known without such updating; (4) the Step 2 grievance official's decision to pay the grievant at the GS-5 level for the period May 5, 1984 to July 1, 1985, was based on the presumption that she was performing GS-5 duties, although management later reviewed her Official Personnel Folder and decided that she did not qualify as a GS-5 Secretary as of July 2, 1986; (5) her current supervisor testified that, even now, he does not use the grievant as a secretary; and (6) based upon its review of other arbitration awards, including an earlier decision by the same Arbitrator in another case, the Agency believed that this case was nonarbitrable and that it would be remiss in not proceeding with its case. Award at 5-6.
The Arbitrator stated that "the key is whether or not the awarding of fees would be in the interest of justice." Award at 6. He referred to the book Grievance Arbitration in the Federal Service, Federal Personnel Management Institute (1987), and noted that one of the editors of that book stated "the award of such [attorney] fees was apparently intended only for relatively extraordinary circumstances in which the employee prevailed and some additional consideration militates in favor of providing additional recovery." Id. at 7. The Arbitrator stated that "it is clear that much caution must be used in order to determine if relatively extraordinary circumstances took place." Id.
The Arbitrator found as follows:
1. It was not clear that the labor relations officials responsible for handling the grievance were aware of what tasks were assigned to the grievant and "it was somewhat difficult to get a handle on the tasks being assigned." Award at 8.
2. The labor relations officials incorrectly thought that because the grievant performed typing duties most of the time, she was properly classified at GS-4. In view of that incorrect conclusion, the Agency "had no idea that it would not prevail in arbitration." Id. at 9.
3. Although the grievant's first supervisor evaluated her at the GS-5 level, management knew that the evaluation should have been at the GS-4 level. "Clearly evaluating at the wrong level did not suggest to Management that it could not prevail in arbitration." Id.
4. It is not clear that the Agency was aware of an attempt by the grievant's second supervisor to assist the grievant to be upgraded. The information on that point at the hearing "was fuzzy" and "would not convince Management that it could not prevail on the merits." Id.
5. The Agency's personnel specialists reviewed the grievant's official personnel folder and rated the grievant at the GS-4 level. "It is normal for Management to accept such classifications at face value. In fact, they would think that they would prevail in arbitration with such an evaluation." Id. at 10. Even though the evaluations were incorrect because the grievant's actual duties were not entered into the personnel folder, "the fact remains that the Labor Relations officials relied upon the evaluation without the knowledge that it had not been upgraded." Id.
6. If management had known that the grievant was performing GS-5 duties, it would have known that it could not prevail at arbitration. "However, it is evident that the Management advocate was unaware that the present supervisor would testify to such a fact. In fact, when he did so, the advocate appeared to be in a complete state of shock." Id.
7. Management incorrectly concluded that the difference between GS-4 and GS-5 duties was that the GS-5 secretary was the personal assistant to the head of the office. However, the labor relations officials handling the grievance believed that was the difference at the time of the grievance procedure. Id. at 10-11.
8. The Agency labor relations officials "did not believe that the grievant was performing higher level work" and relied on case law to conclude "that the essential nature of a grievance was concerned with the grade level of the duties performed and thus, under the law, was a classification issue." Id. at 12. However, the Agency improperly relied on an earlier award by the Arbitrator in which he held that the issue was one of classification and not arbitrable. The Agency "erred by not closely examining the factual basis of the two cases in order to determine if there were structural differences." Id. In the instant case, "there was no contention that any position was misclassified or an attempt to reclassify any position. In fact, it was acknowledged that the GS-4 and GS-5 positions were classified correctly." Id. at 13. The Arbitrator noted that the Agency advocate "is highly competent and professional and maintains such a high degree of integrity that she would not pursue a case on its merits when she knew that she could not prevail." Id.
In conclusion, the Arbitrator found that the problems stemming from the Agency's handling of the case, including the lack of awareness of the higher-graded duties performed by the grievant and the Agency's "excessive reliance" on the Arbitrator's award in another case, led to the "inevitable decision" that the grievance was arbitrable. Award at 14. However, he stated that "the Agency advocate was boxed in by the absence of facts in significant areas, fuzzy information, improper assumptions, inappropriate analyses by Personnel specialists, excessive reliance upon a past arbitral decision, etc. Thus, it must be concluded that, from her frame of reference, she strongly felt that the issue was not arbitrable and that, if heard on the merits, the Agency would prevail." Id.
The Arbitrator made the following award:
Based upon the above analysis, it cannot be concluded that the Agency knew, or should have known, that it could not prevail on the merits of the action. Thus, it would not be "in the interest of justice" to award attorney fees and expenses. The petition for same is denied.
Award at 15.
III. Positions of the Parties
A. Union's Exceptions
The Union contends that the Arbitrator's denial of attorney fees is contrary to law because the Arbitrator misapplied the fifth standard set forth in Allen. Under that standard, attorney fees are in the interest of justice if the agency "knew or should have known that it could not prevail on the merits" when it brought the proceeding. Exceptions at 4, citing Allen, 2 MSPR at 435.
The Union also contends that the Arbitrator improperly found that awards of attorney fees are intended for "relatively extraordinary circumstances." Exceptions at 6. The Union contends that "it is clear that the arbitrator overlayed an 'extraordinary circumstances' standard upon accepted criteria for the award of fees." Id., footnote omitted. The Union maintains that because of the improper "extraordinary circumstances" standard, the Arbitrator "took a deferential view of the Agency's conduct" and "allowed the burden of the Agency's misconduct to fall equally upon Management and the Union." Id. at 8.
The Union repeats the arguments which it made to the Arbitrator to demonstrate that the Agency was aware or should have been aware of the circumstances of the grievant's assignment of duties at a higher grade. The Union contends that the Arbitrator relied erroneously on what the labor relations official actually knew about those circumstances rather than making a determination based on what the Agency "should have known." Exceptions at 11, emphasis in original.
The Union cites decisions of the Merit Systems Protection Board (MSPB) in which the MSPB held that the "interest of justice" standard requires the payment of attorney fees in cases where the agency involved was negligent in the preparation or presentation of its case or where the agency arrived at an erroneous interpretation of statutes and regulations due to a lack of careful reading. Exceptions at 11. The Union contends that the Agency's conduct in the present case amounts to negligent presentation, because the Agency labor relations official was "in a uniquely advantageous position relative to gathering information within the Agency[.]" Id. at 12, emphasis in original. The Union maintains that the "knew or should have known" aspect of the "interest of justice standard" must apply in the instant case and that the Agency's labor relations official should have known what duties the grievant was performing. Id. at 13. The Union contends that, notwithstanding the Arbitrator's opinion of the integrity of the management advocate who presented the case, the Arbitrator found numerous errors in management's preparation. The Union maintains that these errors support the conclusion that the Agency should have known that it would not prevail on the merits of the case.
B. Agency's Opposition
The Agency denies that the Arbitrator improperly imposed a standard under which attorney fees are to be awarded only under extraordinary circumstances. The Agency states that the Arbitrator meant "that not every case in which the union prevails automatically equates to payment of attorney fees and expenses." Opposition at 2. The Agency maintains that the Arbitrator relied on the entire record in the case to determine that attorney fees were not warranted. The Agency contends that the Union's exceptions "simply constitute a repetitive claim of disagreement with the judgement (sic) of the Arbitrator." Id.
The Agency states that the Union omits the following facts which support the Agency's position: (1) the grievant spent 95 percent of her time typing; (2) the grievant's work experience showed that she did not meet the requirements for a GS-5 secretary position; (3) the grievant knew she was not in a GS-5 position but allowed her supervisor to appraise her for that position; (4) even after the grievant was promoted to the GS-5 position her duties consisted primarily of typing; and (5) the Agency believed that this case paralleled a prior case which the Arbitrator declared to be nonarbitrable because it involved a classification matter. Opposition at 3-4.
A. Award of Attorney Fees Under the Back Pay Act
When exceptions are filed to arbitration awards resolving requests for attorney fees under the Back Pay Act, 5 U.S.C. § 5596, the Authority's role is to ensure that the arbitrator complies with applicable statutory standards. A threshold requirement for entitlement to attorney fees under the Back Pay Act is a finding that the grievant was affected by an unjustified or unwarranted personnel action which resulted in the withdrawal or reduction of the grievant's pay, allowances, or differentials. The Back Pay Act further requires that an award of attorney fees must be: (1) in conjunction with an award of backpay to the grievant on correction of the personnel action; (2) reasonable and related to the personnel action; and (3) in accordance with the standards established under 5 U.S.C. § 7701(g). U.S. Patent and Trademark Office and Patent Office Professional Association, 32 FLRA 375, 378 (1988).
The prerequisites for an award of attorney fees under section 7701(g)(1), which applies to all cases except those involving allegations of discrimination, are as follows: (1) the employee must be the prevailing party; (2) the award of fees must be warranted in the interest of justice; (3) the amount of the fees must be reasonable; and (4) the fees must have been incurred by the employee. The standards established under section 7701(g) further require a fully articulated, reasoned decision setting forth the arbitrator's specific findings supporting the determination on each pertinent statutory requirement, including the basis on which the reasonableness of the amount was determined when fees are awarded. Id.
The issue to be addressed by the Authority in this case is whether an award of attorney fees "is warranted in the interest of justice" under 5 U.S.C. § 7701(g)(1). If attorney fees are warranted, there must be a finding as to a reasonable amount. We conclude that an award of attorney fees to the grievant in this case would be in the interest of justice. Therefore, we will modify the Arbitrator's award to grant attorney fees to the grievant and remand the award to the parties to obtain a determination by the Arbitrator as to a reasonable amount of fees.
In determining whether awards of attorney fees are warranted in the "interest of justice" under 5 U.S.C. § 7701(g)(1), the Authority applies the five criteria set forth by the MSPB in Allen. See United States Department of the Navy, Norfolk Naval Shipyard and American Federation of Government Employees, Local 4015, 34 FLRA No. 126 (1990), citing Federal Aviation Administration, National Aviation Facilities Experimental Center and National Federation of Federal Employees, Local 1340, 32 FLRA 750, 752 (1988), and United States Department of Housing and Urban Development, Region VI and United States Department of Housing and Urban Development, Region VI, San Antonio Area Office, 24 FLRA 885, 887-88 (1986). We will find that an award of fees is warranted in the interest of justice if any one of the following criteria is met:
1. [T]he agency engaged in a "prohibited personnel practice" (§ 7701(g)(1));
2. [T]he agency's action was "clearly without merit" (§ 7701(g)(1)), or was "wholly unfounded," or the employee is "substantially innocent" of the charges brought by the agency;
3. [T]he agency initiated the action against the employee in "bad faith," including:
a. Where the agency's action was brought to "harass" the employee;
b. Where the agency's action was brought to "exert improper pressure on the employee to act in certain ways";
4. [T]he agency committed a "gross procedural error" which "prolonged the proceeding" or "severely prejudiced" the employee;
5. [T]he agency "knew or should have known that it would not prevail on the merits" when it brought the proceeding.
See 34 FLRA No. 126, slip op. at 6.
B. Attorney Fees Are Warranted In the "Interest of Justice" Under Criterion 5
There is no contention that attorney fees are warranted in this case on the basis of the first four criteria. The issue is whether attorney fees are warranted under criterion 5, because the Agency knew or should have known that it would not prevail on the merits in arbitration. Based on the facts set forth in the Arbitrator's opinion and award, we conclude that the Agency should have known that it would not prevail in the arbitration proceeding.
The Arbitrator's factual findings demonstrate that the Agency failed to gather and present relevant information and evidence pertaining to the grievant's performance of higher-graded duties. That information was exclusively within the possession and control of the Agency. If Agency management, represented by its labor relations officials, had been aware of that information and evidence, then the Agency should have known that it would not prevail.
The Arbitrator found that the record in the case fully supported the Union's contention that the grievant performed the duties of a GS-5 secretary position. For instance, the Arbitrator found that the Agency's labor relations officials were not aware of what duties management assigned the grievant and were not aware that the grievant performed the same duties both before and after she was promoted to GS-5. Award at 8 and 10. The Arbitrator found that management was aware that the grievant's supervisor incorrectly evaluated her at the GS-5 level. Id. at 9. The Arbitrator stated that the advocate was unaware that the grievant's present supervisor would testify that the grievant was performing at the GS-5 level and when the supervisor testified to that, "the advocate appeared to be in a complete state of shock." Id. at 10. The Arbitrator found that the Agency relied on the incorrect conclusion of its personnel specialist that the main difference between the GS-4 and GS-5 positions "was that the GS-5 Secretary was the personal assistant to the head of the office." Id. at 11.
Those findings of the Arbitrator establish that Agency management and the Agency's advocate in the arbitration proceeding relied on incomplete facts and information when preparing the case for arbitration. If the complete facts and information which were available within the Agency had been obtained, then the advocate and Agency management should have known that the Agency would not prevail in its contention that the grievant was not performing higher-graded duties. See Tarrant v. Department of Transportation, Federal Aviation Administration, 25 MSPR 129 (1984) (if agency had made reasonable inquiry into facts and records within its possession, it should have ascertained that an action was without merit).
Further, the Arbitrator stated that the Agency erroneously believed that the Arbitrator would rule that the instant case concerned a classification matter because he had so ruled in another case. However, the Arbitrator pointed out that the Agency "erred by not closely examining the factual basis of the two cases in order to determine if there were structural differences." Award at 12. The Arbitrator stated that while the other case "clearly was a classification issue[,]" in the instant case "there was no contention that any position was misclassified or an attempt to reclassify any position." Id. at 13. He noted that the Agency should have been aware of the distinction between classification and assignment of duties at a higher level. He concluded that "there was excessive reliance upon a previous award of this Arbitrator." Id. at 14.
In summary, we find as a matter of law that the Arbitrator erred when he ruled that attorney fees were not warranted. The Arbitrator's ruling is not consistent with his factual findings concerning the Agency's lack of knowledge of the duties performed by the grievant and the Agency's misunderstanding of the prior arbitration award. It is apparent from the Arbitrator's opinion and award that the Agency advocate should have been aware of the facts and information relating to the grievant's duty assignments because those matters were wholly within the Agency's control. The Agency and its advocate were responsible for making a proper investigation into the matter and ascertaining that information. Further, as the Arbitrator stated, the Agency advocate should have distinguished between the prior arbitration case which "clearly was a classification issue" and the instant case which involved assignment of duties at a higher level. See Award at 12-13. The Agency and its advocate should have, "by making reasonable inquiry," determined that the Agency would not prevail at arbitration. Sprenger v. Department of the Interior, 34 MSPR 664, 667 (1