39:1215(104)AR - - Army, Red River Army Depot, Texarkana, TX and NAGE Local R14-52 - - 1991 FLRAdec AR - - v39 p1215
[ v39 p1215 ]
The decision of the Authority follows:
39 FLRA No. 104
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF THE ARMY
RED RIVER ARMY DEPOT
NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
March 15, 1991
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to the supplemental award of Arbitrator Donald Austin Woolf filed on behalf of 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 Agency did not file an opposition to the Union's exceptions.
In his supplemental award, the Arbitrator denied the Union's motion for attorney fees in connection with his original award. The Union contends that the Arbitrator's denial of its request for attorney fees is erroneous and contrary to law.
For the reasons discussed below, we conclude that the Arbitrator's supplemental award is deficient. We will remand the matter of the Union's request for attorney fees to the parties for further proceedings consistent with this decision.
The grievance in this case alleged that the Agency violated the parties' collective bargaining agreement by not granting the grievant a cash award for the exceptional/outstanding performance rating she received on her annual performance evaluation. The dispute centered on whether the recently executed agreement providing for such cash awards applied to the grievant's performance evaluation. The Arbitrator sustained the grievance, finding that because the Agency had acted on the grievant's performance evaluation after the effective date of the new agreement, the language of the new agreement was controlling. The Arbitrator directed the granting of the cash award, citing the Back Pay Act as the statutory authority for the Agency to provide such relief. Original Award at 14.
The Union then filed with the Arbitrator a motion for an award of attorney fees pursuant to the Back Pay Act. The Union, citing Allen v. U.S. Postal Service, 2 MSPR 420 (1980) (Allen); O'Donnell v. Department of the Interior, 2 MSPR 445 (1980) (O'Donnell); and other cases, argued that: (1) the grievant had incurred attorney fees; (2) the grievant was the prevailing party; and (3) an award of attorney fees was warranted in the "interest of justice." With regard to the interest-of-justice standard, the Union contended that the Agency's action was clearly without merit, wholly unfounded and made in bad faith and that the Agency knew or should have known it would not prevail.
The Union also contended, citing to Naval Air Development Center, Department of the Navy and American Federation of Government Employees, Local 1928, AFL-CIO, 21 FLRA 131 (1986) (NADC), that "[n]ot only was the [A]gency's position without merit, by maintaining this action an important service was rendered to the [F]ederal work force at the Red River Army Depot, that is, uniformity in treatment." Motion for Attorney Fees at 4.
The Union sought an award of attorney fees based on a lodestar calculation. The Union submitted an affidavit attesting to the qualifications of counsel, the hours worked, and the types of work performed by counsel during the representation of the grievant. It also provided a similar affidavit of his law clerk. The Union requested that the attorney be compensated at the prevailing market rate and for expenses.
The Agency opposed the award of attorney fees. It contended that the parties' agreement does not provide for the award of fees. It further contended that even if the agreement provided for such awards, the criteria for an award of attorney fees found in the relevant authorities were not met.
III. Arbitrator's Supplemental Award
The Arbitrator framed the issue before him as:
Is the Agency required by the Agreement between the Parties to pay attorney's fees and expenses incurred by the Union in the arbitration of grievances where the Union prevails, and, if so, in what amount?
Supplemental Award at 3.
The Arbitrator noted that this case involves a violation of the collective bargaining agreement. He found that "[w]hile arbitrators have applied 'external law' in some instances, the practice is controversial and not encouraged; moreover, there is little to suggest that it is needed in the disposition of the issue herein." Id. at 12.
The Arbitrator ruled that the Agency was not required by the agreement to pay attorney fees and expenses incurred by the Union in the arbitration of grievances where the Union prevails. In support of this ruling, the Arbitrator found that the collective bargaining agreement makes no mention of legal fees or other expenses incurred by either party and contains only the relatively uncommon provision that the losing party pay the fee and expenses, if any, of the Arbitrator. Further, he found that no evidence was provided by the Union, in the form of past practice or bargaining history, to show that the payment of attorney fees was intended or contemplated by the parties.
The Arbitrator also made findings as to whether attorney fees were warranted under the Back Pay Act. In this regard, the Arbitrator found that the tenor of statutory provisions and decisions of the Merit Systems Protection Board (MSPB) and the Authority imply that attorney fees should be awarded where there appears to be malice, gross negligence, or serious procedural error on the part of an agency and that the Back Pay Act specifically authorizes such awards in grievance proceedings. He concluded that the record before him did not show malicious intent or gross negligence on the part of the Agency. He also found that it neither had been charged nor supported that the apparent intent or the effect of the Agency's actions was to harass the Union, so as to exhaust its scarce resources.
Further, the Arbitrator found that the Union's case failed to meet the criterion of the award of fees being in the interest of justice. The Arbitrator noted that the Union had the burden of proof to show that the personnel practice was prohibited, that the action was clearly without merit or was wholly unfounded, that the action was in bad faith, and that the Agency should have known it would not prevail.
The Arbitrator further concluded that his ruling that the Agency's action was prohibited by the agreement did not lead to a finding that "the requirements of the [Civil Service] Reform Act, the Back Pay Act, [and the cases cited,] have automatically been met." Id. at 14. He found that "[t]o so rule using external law as a basis rather than the contract, the record, and the submission agreement would appear to require that attorney fees of Union Counsel be paid in all instances where the Union prevailed under all contracts between [agencies and unions]." Id. The Arbitrator found that no effort has been made to show that this was the intent of Congress, the Merit Systems Protection Board, or the Authority. The Arbitrator found that the action of the Agency was not a prohibited personnel practice within the meaning of either the Civil Service Reform Act or the Back Pay Act.
In addition, the Arbitrator concluded that because the issue on the merits involved a differing interpretation of the agreement by the parties, the matter involved a good faith difference of opinion. Further, the Arbitrator found that as the matter involved entitlement to a benefit, no guilt or innocence, as in the Allen criteria, was at issue and that the criterion concerning bad faith had not been met. As there had been a substantial history of past practice and this was the first time the Agency's conduct had been challenged in this regard, the Arbitrator found the same reasoning applied to the criterion of foreknowledge of the outcome of the case.
As to the reasonableness of the fee, the Arbitrator did not come to a conclusion. However, he noted the difference between a case granting actual expenses and one allowing market rates as a basis. The Arbitrator noted that the case allowing market rates involved "clear foreknowledge" by the agency of the likely outcome, in contrast to this case, which did not. Id. at 11. He also stated that in this case NADC requires a determination based on actual expenses. Id. at 12.
In summary, the Arbitrator made the following conclusions:
1. Attorney's fees were incurred;
2. They were incurred by the prevailing party;
3. The award of fees in this instance would not be "in the interest of justice" within the meaning of the Allen criteria;
4. Reasonableness of the fee charged is in question because of disparate rulings and because of the [Authority] ruling in [NADC].
Id. at 15. The Arbitrator further concluded that:
Even if all Allen criteria were fully satisfied, the overriding factor is the intent of the Parties in the Agreement between them. The Arbitrator is bound by that Agreement, the record, and the submission agreement.
As the Arbitrator ruled that the Agency was not required by the Agreement to pay attorney fees and expenses incurred by the Union, he denied the Union's motion.
IV. Union Exceptions
The Union excepts to the Arbitrator's finding that the Agency was not required by the agreement to pay attorney fees and expenses incurred by the Union in connection with the arbitration, contending that the award is contrary to law. The Union also excepts to the Arbitrator's other findings that attorney fees were not warranted and that counsel was not entitled to market rates for his fee.
The Union argues that in Philadelphia Naval Shipyard and Philadelphia Metal Trades Council, 32 FLRA 417 (1988) (Philadelphia Naval Shipyard), the Authority addressed the same issues as presented here and determined that the Back Pay Act confers jurisdiction on an arbitrator to consider an attorney fee request. In addition, it argues that Article II, Section 1 of the parties' agreement makes all laws, including the Back Pay Act, applicable to the agreement. The Union contends that the Arbitrator's award must be reversed because it hinged on his erroneous opinion that the Agency would not be required to pay attorney fees unless such a provision was specifically provided for in the agreement.
Further, the Union disputes the Arbitrator's finding that fees were not warranted in the interest of justice. It argues that the Agency's action constituted an "unjustified and unwarranted" action which the Union was forced to correct at its expense. The Union claims that the Arbitrator specifically found that the Agency's action in making cash awards to some employees of the same grade receiving the same performance rating but not to others was "arbitrary and capricious" on its face. It argues that such a finding would warrant fees. In addition, it contends, the Agency's refusal to make a cash award to the grievant was in direct violation of the clear language of the current agreement and was unreasonable and unwarranted. The Union argues that the new agreement imposed a measure of consistency on the Agency and that it was clearly without merit for the Agency to attempt to impose the prior practice beyond the effective date of the new agreement. In this regard, it contends that the Agency's refusal to follow the plain language of the agreement was in bad faith and wholly unfounded. It also contends that the Agency should have known it would not prevail.
The Union also reiterated its position that under NADC it is entitled to attorney fees where there is a service rendered to the Federal work force or there is a benefit to the public derived from maintaining an action. It contends that not only was the Agency's position without merit, but that by maintaining the action in this case and obtaining uniformity in treatment, the Union rendered an important service to the Federal work force at the Agency.
The Union also contends that its counsel was entitled to the prevailing market rate for his fees. In this regard, it maintains that the counsel is in private practice and that no fees are to be reimbursed to the Union.
V. Analysis and Conclusions
We conclude that the Arbitrator's denial of the Union's request for an award of attorney fees is deficient.
A. Arbitrator's Authority to Rule on Attorney Fees
We find that the Arbitrator erred in concluding that unless the provisions of the agreement specifically provided for the granting of attorney fees he lacked authorization to grant attorney fees.
In Philadelphia Naval Shipyard, the Authority discussed whether the Back Pay Act and its implementing regulations, 5 C.F.R. part 550, authorize the filing of a request for an award of attorney fees after an arbitrator has issued an award of backpay. The Authority concluded that the Back Pay Act confers jurisdiction on an arbitrator to consider a request for attorney fees either during the arbitration or within a reasonable time after the arbitrator's decision awarding backpay becomes final and binding. 32 FLRA at 420-21.
Consequently, the Arbitrator had jurisdiction under the Back Pay Act to consider and rule on the Union's request for an award of attorney fees. The Arbitrator erred in concluding that he also needed to be specifically authorized by the parties' collective bargaining agreement to award attorney fees because such authority is conferred to him by the Back Pay Act. We note, as stated in Philadelphia Naval Shipyard, that the parties can negotiate into their agreement time limits for filing a request for attorney fees. 32 FLRA at 421. Further, a union may also agree to language that clearly and unmistakably waives its statutory right to attorney fees. In the absence of such contractual limitations in this case, however, we conclude that the Arbitrator had full authority to award attorney fees if such an award complied with the requirements of the Back Pay Act. Accordingly, the Arbitrator's denial of the Union's request on the basis that the parties' collective bargaining agreement does not specifically authorize the granting of attorney fees is contrary to the Back Pay Act.
As the Arbitrator did make findings regarding whether the Union's request for attorney fees was warranted under the Back Pay Act, however, we will review those findings.
B. Entitlement to Attorney Fees Under the Back Pay Act
We find that the Arbitrator's award articulates specific findings supporting the determination that an award of attorney fees was not warranted in the interest of justice under the criteria set forth in Allen. However, we find that the Arbitrator's award is deficient because he failed to address the Union's contention that an award of attorney fees was warranted because, by maintaining the action, a service was rendered to the Federal work force, an additional criterion set forth in NADC.
Under the Back Pay Act, an arbitrator's resolution of a request for attorney fees must be in accordance with the standards established under 5 U.S.C. º 7701(g). Section 7701(g) prescribes that for an employee to be eligible for an award of attorney fees, the employee must be the prevailing party. Section 7701(g)(1), which applies to all cases except those involving allegations of discrimination, requires that an award of attorney fees must be warranted in the interest of justice, that the amount must be reasonable, and that 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 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. See NADC, 21 FLRA at 136-40.
The Arbitrator concluded that attorney fees were incurred and that the grievant was the prevailing party. These two conclusions are not at issue, and, therefore, are not before us. He also found that the "award of fees in this instance would not be 'in the interest of justice' within the meaning of the Allen criteria[.]" Supplemental Award at 15.
The MSPB in Allen held that an award of fees is warranted under the interest of justice standard in cases: involving prohibited personnel practices; where agency actions are clearly without merit or wholly unfounded, or where the employee is substantially innocent of charges brought by the agency; when agency actions are taken in bad faith to harass or exert improper pressure on an employee; when gross procedural error by an agency prolonged the proceeding or severely prejudiced the employee; or where the agency knew or should have known it would not prevail on the merits when it brought the proceeding. United States Department of the Navy, Norfolk Naval Shipyard and American Federation of Government Employees, Local 4015, 34 FLRA 725, 730 (1990). An award of fees is warranted in the interest of justice if any of the Allen criteria are met. Id.
In this case, the Union