48:1281(136)CA - - Treasury, IRS, Austin Compliance Center and NTEU, Chapter 247 - - 1994 FLRAdec CA - - v48 p1281

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[ v48 p1281 ]
48:1281(136)CA
The decision of the Authority follows:


48 FLRA No. 136

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

UNITED STATES DEPARTMENT OF TREASURY

INTERNAL REVENUE SERVICE

AUSTIN COMPLIANCE CENTER

AUSTIN, TEXAS

(Respondent/Agency)

and

NATIONAL TREASURY EMPLOYEES UNION

CHAPTER 247

(Charging Party/Union)

6-CA-90506

(44 FLRA 1306 (1992))

(45 FLRA 525 (1992))

_____

DECISION AND ORDER ON MOTION

FOR PAYMENT OF ATTORNEY FEES

January 5, 1994

_____

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This unfair labor practice case is before the Authority on exceptions to the attached decision of the Administrative Law Judge filed by both the Respondent and the Charging Party. The Charging Party filed an opposition to the Respondent's exceptions.(1)

The Judge found that under the Back Pay Act, 5 U.S.C. § 5596, the Respondent was required to pay a portion of the attorney fees requested by two Union attorneys in connection with their work on a previously decided unfair labor practice case(2) and on the preparation of the instant application for fees and costs.

We adopt the Judge's findings, conclusions, and recommended Order only to the extent that they are consistent with this decision. For the following reasons, we find that the Respondent is required to pay attorney fees for the activities for which the Judge awarded fees. We further find that the Respondent is required to pay attorney fees for time spent on certain additional activities. Finally, we remand this case to the Judge for further findings consistent with this decision.

II. Background

The facts relating to the underlying unfair labor practice proceeding are set forth in 44 FLRA 1306. In that decision, the Authority adopted the Judge's findings that the Respondent violated: (1) section 7116(a)(1), (5), and (8) of the Federal Service Labor-Management Relations Statute (the Statute) by failing to comply timely with an arbitration award when it unreasonably delayed offering reinstatement to an employee and delivering the backpay check to the employee; and (2) section 7116(a)(1) and (8) of the Statute by failing and refusing to comply fully with the award of backpay when it denied the employee backpay for a 2-week period. The Authority further found, contrary to the Judge, that the Respondent violated: (1) section 7116(a)(1), (5), and (8) of the Statute by failing to comply timely with the arbitration award when it unreasonably delayed processing the employee's backpay claim; and (2) section 7116(a)(1) and (8) of the Statute by failing and refusing to comply fully with the arbitration award when it improperly deducted the employee's outside overtime and "moonlighting" earnings from the award of backpay.

To remedy the unfair labor practices, the Authority ordered the Respondent, among other things, to comply promptly and fully with the arbitration award by paying the employee backpay for the disputed 2-week period and by reimbursing the employee for any overtime or "moonlighting" earnings which were improperly deducted from the backpay award.

The Respondent subsequently filed a motion for reconsideration of the Authority's Decision and Order in 44 FLRA 1306. The motion was denied in 45 FLRA 525.

On June 29, 1992, the Union filed an application for attorney fees with the Authority requesting an award of attorney fees under the Back Pay Act. The Union requested fees at the Washington, D.C. market rate which totalled $31,586.00 or, in the alternative, using the cost-plus formula in the amount of $11,494.50 for legal services performed by Union counsel Michael Wolf and supervisory counsel Dennis Schneider. By Order dated July 20, 1992, the Authority referred the Union's application to the Office of Administrative Law Judges, and the case was assigned to an Administrative Law Judge. The parties filed various submissions with the Judge. Subsequently, on his own motion, the Judge issued an Order to the parties dated January 25, 1993, granting the Union leave to file evidence showing the market rate of fees for Austin, Texas in view of the Authority's decisions in United States Department of Justice, Bureau of Prisons, Washington, D.C. and Bureau of Prisons, Federal Correctional Institution, Ray Brook, New York, 46 FLRA 1002 (1992) (Bureau of Prisons) and U.S. Customs Service, 46 FLRA 1080 (1992) (Customs Service). The Union filed an affidavit supporting the market rate of $150 per hour in Austin, Texas. The Judge gave the Respondent and the General Counsel leave to respond to the Union's submission. The Respondent filed a response disputing the sufficiency of the evidence offered by the Union to support the market rate for Austin, Texas during the relevant time periods. The General Counsel did not file a response.

III. Administrative Law Judge's Decision

The Judge's findings, which are set forth fully in the Judge's decision, are summarized below.

The Judge found that 5 U.S.C. § 7701(g)(1) applied in this case as the basis for determining whether the Union attorneys were entitled to an award of fees.(3)

The Judge examined the four requirements set forth in section 7701(g)(1) and found, first, that there was "no dispute that an attorney-client relationship existed between [the employee] and Mr. Wolf and that Mr. Wolf rendered legal services on behalf of [the employee.]" Judge's Decision at 6.

Second, the Judge found that the employee was the prevailing party.

Third, the Judge examined whether an award of fees was warranted in the interest of justice pursuant to Allen v. United States Postal Service, 2 MSPR 420, 434-35 (1980) (Allen). The Judge found that the Respondent's failure and refusal to comply timely with the arbitrator's award after it had become final was "without merit and wholly unjustified[.]" Id. at 8. The Judge further found that the Respondent "knew, or should have known, that, because it had failed and refused to timely reinstate the [employee] and otherwise timely to comply with the final award, it would not prevail on the merits in the unfair labor practice proceeding." Id. The Judge rejected the Respondent's argument that in examining the Respondent's compliance with the award, the Judge should focus solely on how the Respondent calculated backpay pursuant to the award. The Judge also rejected the Respondent's contention that Wolf's alleged "unethical conduct" at the hearing in acting as the Union's attorney and testifying as a witness for the General Counsel "prohibits the award of attorney fees[.]" Id. (citation omitted). The Judge found that nothing in the Authority's Rules and Regulations prohibits an attorney for a party from testifying as a witness in the same case. Further, the Judge stated that the unfair labor practice forum was not the forum to determine whether Wolf's conduct violated the Texas Code of Professional Responsibility, as alleged by the Respondent. The Judge concluded that Wolf was eligible for fees under the Back Pay Act.

Fourth, the Judge examined whether the requested fees were reasonable. The Judge found that the Union maintains a separate account for the receipt of attorney fee awards for funding administrative and judicial proceedings and that, consistent with Authority precedent, the Union was entitled to fees based on the prevailing market rate in Austin, Texas.(4) To determine the appropriate hourly rate, the Judge examined the affidavit of one Austin, Texas attorney submitted by the Union in which the attorney provided his firm's billing rates for attorneys and paralegals based on their years of experience. The affidavit stated that, in the attorney's opinion, the firm's rates were at or below the prevailing community rates for similar work. The Judge noted that the Respondent challenged the rates provided in the affidavit but that the Respondent "made no showing whatever as to what the prevailing rates in Austin, Texas, are." Id. at 12. The Judge concluded that "in the absence of any evidence or testimony challenging or disputing the showing of prevailing rates in Austin[] established by the affidavit" submitted by the Union, the Union "has met its burden of producing satisfactory evidence of prevailing rates in Austin, Texas." Id. at 13. Accordingly, the Judge accepted the statement in the affidavit that the hourly rate in Austin for attorneys with experience similar to the attorneys in this case is $150.

The Judge also examined whether and to what extent the Union's attorneys were entitled to fees for time spent on specific activities. The Judge found that, consistent with Hensley v. Eckerhart, 461 U.S. 424, 440 (1983) (Hensley), the Union may not recover fees for an unsuccessful claim that was distinct in all respects from the successful claims. The Judge found that, pursuant to Hensley, the Union should not recover fees for its claims that the complaint should have been amended to state that the Respondent was obligated to comply with the award as of April 14, 1989, and that the employee should be compensated for adverse tax consequences due to the timing of the backpay award. The Judge found that the Union "did not prevail on these two claims" and that "[t]hese two claims were distinct from the claims which were successful[.]" Id. at 16. Having concluded that the hours spent on these unsuccessful claims should be excluded from a reasonable fee, the Judge reduced the number of hours claimed by Wolf for time spent on those claims in drafting the post-hearing brief and exceptions to the Judge's initial decision.

Further, relying on Bureau of Prisons, the Judge excluded from the fee application 8 hours claimed by Wolf for activity that is "customary to an attorney-client relationship" but which made "no contribution whatever to prosecution of [the] case . . . ." Id. The Judge found that although an attorney "must consult with his client(s) in preparing for trial[,]" time spent on matters such as telephone calls to update the employee or speak to Union representatives or time spent studying the Judge's and the Authority's decisions "did not contribute to [the] General Counsel's efforts in prosecuting the case." Id. at 17. The Judge also found that the fees should exclude the time spent by Wolf "in preparing to testify as a witness" and testifying "as a witness inasmuch as he was not then acting as an attorney in the litigation of this case[.]" Id. at 8.(5) The Judge further found that the time charged for a "FOIA [Freedom of Information Act] request" has "no known relevancy" to this case and, therefore, disallowed that time. Id. at 17. Moreover, the Judge stated that the 39.5 hours spent on "unreliable and confusing" backpay calculations was excessive. Id. However, because the computation of backpay liability "was important to establish both that overtime had been earned and the hours of [the employee's] employment," the Judge found that 19.5 hours for that activity was reasonable. Id. at 18.

With respect to the time claimed by Schneider, the Judge disallowed the 3.9 hours claimed in 1990 and 1991 for consulting with Wolf because he found that that activity "did not contribute to [the] General Counsel's efforts in prosecuting the case[.]" Id. However, the Judge found that the time spent by Schneider and Wolf preparing the attorney fees brief is "fully allowable to the extent that any attorney's fee is granted." Id.

Finally, the Judge examined the time spent by Wolf as a whole and stated that the issues raised by the Union "were all raised, litigated and briefed by [the] General Counsel" and that the Union "did not prevail on any of the separate issues it raised, litigated and briefed." Id. (emphasis in original). The Judge found that "although [the Union's] efforts in prosecuting this case either totally duplicated the efforts of the General Counsel" or related to unsuccessful claims, "there were, nevertheless, services which were not duplicative for which it is entitled to recover attorney fees[.]" Id. In addition to the time previously noted for backpay computation and preparation of the application for attorney fees, the Judge allowed the Union to recover fees for time spent on activities such as telephone calls to the General Counsel's office, preparation of the charges, and witness preparation. In sum, the Judge awarded the Union $7,215 in fees for 48.1 hours of the time requested.

IV. Positions of the Parties

A. Union's Exceptions

The Union contends that the Judge erred in finding that the Union's efforts did not add significantly to the prosecution of this case. The Union emphasizes that, contrary to the Judge's finding, the Union was the sole party to advance the issue that the employee's "moonlighting" earnings should not have been deducted from his backpay award and that the Union was successful on that issue. The Union asserts that had the Union "not been involved in this case, the employee's back pay award would have been lower than what was obtained as a direct result of the Union's involvement." Union's Exceptions at 13. The Union also asserts that it "assisted the General Counsel during the investigation stage and actively participated in the hearing" and, as a result, "significantly added to the prosecution of this case." Id. at 11-12, 13.

The Union further contends that the Judge should not have disallowed the Union fees for time spent pursuing the claims that were unsuccessful. The Union argues that under Hensley, fees may be disallowed only for unsuccessful claims that are "distinct in all respects from the successful claims . . . ." Id. at 4 (emphasis omitted). The Union maintains that its unsuccessful claim that the Respondent had failed to comply with the arbitration award since April 14, 1989, is not distinct in all respects from the General Counsel's successful claim that the Respondent had failed to comply with the award since July 31, 1989. The Union argues that both claims concern the Respondent's failure to comply with the award and that the "only difference between the General Counsel's claim and the Union's claim is which event triggered noncompliance." Id.

The Union also argues that its unsuccessful claim to compensate the employee for adverse tax consequences caused by the Respondent's willful noncompliance with the award is not distinct in all respects from its successful claims for overtime and "moonlighting" earnings for the employee. The Union asserts that all three claims encompass the theory that "the employee should be made whole for the [Respondent's] noncompliance" with the award and "address the harm to the employee occasioned by the noncompliance[.]" Id. at 5.

Additionally, the Union contends that the Judge erred in concluding that time spent by Union attorneys in "regular and necessary communications with the [employee], and other [Union] representatives, did not relate or add to the prosecution of this case." Id. at 9. The Union specifically asserts that the Judge improperly denied fees for time spent by Wolf on the following matters: (1) preparing a letter to the Respondent demanding compliance with the award and discussing a letter drafted by the Respondent concerning the employee's reinstatement; (2) determining that the Respondent would not comply with the award; (3) researching the forum in which to appeal the Respondent's refusal to comply with the award; (4) reviewing the theory of the case and discussing litigation strategy with the supervisory attorney; and (5) studying the Judge's and the Authority's decisions to determine if appealable issues were present.

The Union further argues that the Judge improperly disallowed fees for the time spent by Schneider consulting with Wolf on the case, preparing for the hearing, and reviewing the post-hearing brief. According to the Union, the time spent by Schneider "ensure[d] that all issues [we]re properly advanced" and that the employee was protected. Id. at 10. The Union maintains that the "lack of any rational[] basis for the exclusion of the hours claimed by Counsel Schneider is grounds for review of the [Judge's] decision." Id.

Based on the foregoing arguments, the Union contends that it should have been awarded $24,660 in fees for 152.5 hours spent by Wolf and 11.9 hours spent by Schneider on this case.(6)

B. Respondent's Exceptions

The Respondent contends that the Judge improperly granted attorney fees in this case. The Respondent argues that Wolf violated the Texas Code of Professional Responsibility by acting as both representative and witness during the hearing before the Judge and that "[t]his misconduct should prohibit [the Union] from recovering attorney fees." Respondent's Exceptions at 5. The Respondent maintains that "courts have used various sanctions against attorneys who violate ethical rules, including disallowing all fees or requiring the disgorgement of attorneys fees." Id. at 8-9 (citing Woods v. City National Bank & Trust Co., 312 U.S. 262 (1941) (Woods) and Chicago & West Towns Railways v. Friedman, 230 F.2d 364, 369 (7th Cir.) (Chicago & West Towns Railways), cert. denied, 351 U.S. 943 (1956)). The Respondent notes the Judge's finding that the practice of the Union's representative both testifying and acting as counsel for the Union is "'a poor practice and one to be avoided[.]'" Id. at 7 (quoting 44 FLRA at 1333 n.4). The Respondent maintains that allowing the Union "to benefit through or in connection with this unethical conduct is against the interests of justice" under Allen. Id. at 8.

The Respondent further excepts to the Judge's finding that it knew or should have known that it would not prevail in this case within the meaning of Allen. The Respondent asserts that in determining whether attorney fees were appropriate in this case, the Judge should have focused "on only [the backpay] portion of the case since it is [the backpay] portion of the underlying case that forms the basis for [the Union's] request for fees." Id. at 10. The Respondent argues that it calculated backpay based upon its interpretation of the applicable law and regulations and made a "good faith determination that all outside earnings were to be deducted from a backpay award." Id. (emphasis in original). As the Respondent "prevailed on all backpay issues (except the entitlement to two extra weeks of backpay) before [the] Judge[,]" the Respondent maintains that its position on the backpay issues "cannot be considered wholly unfounded." Id. at 10-11.

The Respondent further argues that an award of attorney fees is not warranted in this case because the Union did not contribute to the success of the case. The Respondent contends that the Union's efforts either duplicated the services of the General Counsel or were spent on claims upon which the Union did not prevail. According to the Respondent, the Union "did not prevail on any claims other than those also raised by [the] General Counsel." Id. at 14. The Respondent maintains that in these circumstances the Union is "not deserving of fees under the interest of justice standard." Id.

In the alternative, the Respondent argues that if the Authority determines that the Union should be awarded attorney fees, the Authority should grant fees for only the hours recommended by the Judge, but should award the fees on a cost-plus basis. The Respondent contends that where, as here, a Union attorney "committed ethical misconduct in the course of the hearing[,]" the attorney should not be awarded market-rate fees. Id. at 16.

The Respondent further argues that fees should be awarded on a cost-plus basis because the Union's single affidavit from an attorney in Austin, Texas offered "inadequate proof . . . of a proper market rate" under the Authority's decisions in Bureau of Prisons and Customs Service. Id. In this regard, the Respondent contends that the affidavit names a market rate of $150 per hour but "fails to give a specific time period (other than the present) during which rates of $150 per hour were charged in the Austin, Texas area." Id. at 17. The Respondent asserts that this failure is "critical" because the Union requested fees for work performed from March 1989 through June 1992. Id.

Finally, the Respondent objects to the Judge's "implication that the Respondent should have offered evidence to support a lower market rate if it believed $150.00 per hour was too high." Id. at 18. The Respondent contends that the party requesting fees has the burden of supporting the claimed market rate and that "this burden should not shift to the Respondent." Id. As the Union failed to provide sufficient evidence to support its fee request, the Respondent asserts that if the Authority finds that fees are warranted, the Authority should either lower the hourly rate or award fees on a cost-plus basis.

C. Union's Opposition

The Union contends that the Judge properly considered the Respondent's actions as a whole in determining that fees were appropriate in the interest of justice. The Union asserts that the "FLRA, MSPB [Merit Systems Protection Board] and the courts all hold that once an award of back pay is issued under [the Back Pay Act] to remedy an unwarranted or unjustified personnel action, a government agency's actions as a whole are reviewed to determine if the award was in the interest of justice." Opposition at 5. Moreover, the Union argues that even assuming that the Respondent's actions with respect to backpay are viewed separately, the Respondent's actions still justify an award of fees.

The Union further contends that Wolf is not disqualified from receiving fees. The Union disputes the Respondent's reliance on the Texas Code of Professional Responsibility. The Union argues that "the Authority is not the forum in which to determine whether an attorney has violated" state ethical rules. Id. at 7. The Union also argues that, in any event, Wolf did not violate the state ethical rules.

The Union also disputes the Respondent's assertion that the Union "'did not prevail on any claims other than those also raised by the General Counsel.'" Id. at 14 (quoting Respondent's Exceptions at 14). The Union argues that, contrary to the Respondent's assertion, the Union was the sole party to advance the "moonlighting" claim before the Authority, and the claim was successful. The Union also argues that the work performed by its attorneys in preparing the case for hearing and filing exceptions to the Judge's decision "had a sufficient impact on the favorable resolution of this case." Id. at 16.

The Union further contends that the Judge properly found that $150 per hour was a reasonable market rate for Austin. The Union asserts that it provided an affidavit of an Austin attorney who has practiced Federal sector labor law for approximately the same amount of time as the Union attorneys in this case. The Union notes that the Respondent failed to provide evidence of a different prevailing rate and that in view of the limited number of attorneys practicing Federal sector labor law in that area, the Union's evidence is sufficient to establish a reasonable market rate for Austin.

The Union further contends that, as acknowledged by the Respondent, the Judge applied Authority precedent in awarding fees at the market rate rather than on a cost-plus basis.

Finally, the Union asserts that it is entitled to an additional 5 hours of fees for the time that Schneider spent preparing the opposition to the Respondent's exceptions.

V. Analysis and Conclusions

A. Entitlement to Attorney Fees

As noted previously, the Union requested attorney fees pursuant to the Back Pay Act. The Back Pay Act, 5 U.S.C. § 5596(b)(1) provides in part that an employee who is found to have been "affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee" is entitled to receive "all or any part of the pay, allowances, or differentials" which the employee normally would have earned or received during the period if the personnel action had not occurred and "reasonable attorney fees . . . awarded in accordance with standards established under section 7701(g) of this title . . . ." 5 U.S.C. § 5596(b)(1)(A)(i) and (ii).

The parties do not dispute that the employee in this case was affected by an unwarranted personnel action and received backpay consistent with the requirements of the Back Pay Act. The prerequisites for an award of attorney fees under 5 U.S.C. § 7701(g)(1), which apply 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. U.S. Department of Defense, Defense Mapping Agency, Hydrographic/Topographic Center, Washington, D.C. and American Federation of Government Employees, Local 3407, 47 FLRA 1187, 1191-92 (1993) (Defense Mapping Agency). 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. See Customs Service, 46 FLRA at 1091.

The Judge found, and the parties do not dispute, that the employee was the prevailing party and that fees were incurred by the employee within the meaning of section 7701(g)(1). The Judge further found that fees were warranted in the interest of justice because the Respondent's failure and refusal to comply timely with the arbitrator's award after it had become final was "without merit and wholly unjustified" and that the Respondent "knew, or should have known, that, because it had failed and refused to timely reinstate the grievant and otherwise timely to comply with the final award, it would not prevail on the merits in the unfair labor practice proceeding." Judge's Decision at 8. The Respondent disputes the Judge's finding that fees were warranted in the interest of justice.

An award of fees is warranted in the interest of justice in cases: (1) involving prohibited personnel practices; (2) where agency actions are clearly without merit or wholly unfounded, or where the employee is substantially innocent of charges brought by the agency; (3) when agency actions are taken in bad faith to harass or exert improper pressure on an employee; (4) when gross procedural error by an agency prolonged the proceeding or severely prejudiced the employee; (5) where the agency knew or should have known it would not prevail on the merits when it brought the proceeding; or (6) where there is either a service rendered to the Federal work force or there is a benefit to the public derived from maintaining the action. Overseas Education Association and U.S. Department of Defense, Office of Dependents Schools, 45 FLRA 214, 216 (1992) (citing U.S. Department of the Army, Red River Army Depot, Texarkana, Texas and National Association of Government Employees, Local R14-52, 39 FLRA 1215, 1222-23 (1991) (Army Depot)). An award of fees is warranted in the interest of justice if any one of these criteria is met. Army Depot, 39 FLRA at 1222.

The Respondent argues that in determining whether it knew or should have known that it would not prevail, the Judge should have focused solely on the Respondent's calculation of backpay and not on the Respondent's other actions throughout the case. For the reasons stated in the Judge's decision, we find that the Judge properly focused on the Respondent's failure and refusal to comply timely and fully with the arbitration award in concluding that the Respondent's actions were clearly without merit. In particular, we find that, in addition to noting the Respondent's failure to provide the employee with backpay for a 2-week period and the Respondent's improper deduction of outside overtime and "moonlighting" earnings from the backpay award, the Judge properly took into account that the Respondent failed and refused to comply with the arbitration award when it unreasonably delayed in offering to reinstate the employee, in processing the employee's backpay claim, and in delivering the backpay check to the employee. See Customs Service, 46 FLRA at 1092 (having found that the agency's "refusal to comply with the award was an action clearly without merit, the [j]udge was not required to set forth his findings with any greater degree of specificity") and Department of the Air Force Headquarters, 832d Combat Support Group DPCE, Luke Air Force Base, Arizona, 32 FLRA 1084, 1097-98 (1988) (Luke AFB) (agency refusal to comply with arbitration award constituted action clearly without merit). Accordingly, we adopt the Judge's finding that an award of fees in this case is in the interest of justice. Having found that the Respondent's actions were clearly without merit, we need not address the Respondent's arguments on any of the other criteria noted in Allen and Army Depot. See, for example, 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 attorney fees is in the interest of justice if any one of the Allen criteria, including a finding that an agency action was clearly without merit, is met).

Further, we reject the Respondent's argument that the Union is not entitled to fees because Wolf's conduct at the hearing violated the Texas Code of Professional Responsibility. This case is distinguishable from Woods and Chicago & West Towns Railways, cited by the Respondent, because the courts in those cases reduced or disallowed attorney fees only after specifically finding that the attorneys requesting fees had created impermissible conflicts of interest in representing their clients. There has been no such finding in this case. Rather, the Judge found, and we agree, that Wolf's conduct was not prohibited by the Authority's Rules and Regulations and that the proceeding before the Judge was not the proper forum for determining whether Wolf acted in violation of the Texas Code of Professional Responsibility. In these circumstances, we find that Wolf's conduct at the hearing does not preclude the Union from receiving fees.

Finally, for the reasons discussed below, we find that the Union's efforts contributed to the success of the case. Therefore, we reject the Respondent's argument that the Union's efforts duplicated those of the General Counsel and that fees are not warranted in the interest of justice on that basis.

B. Reasonableness of Fees

The Back Pay Act requires that an award of attorney fees be reasonable. In order to fashion an attorney fee award, it is necessary to determine the number of hours reasonably expended in the litigation and whether the applicant's request for an award at a particular hourly rate is reasonable. Bureau of Prisons, 46 FLRA at 1008. The hours expended multiplied by the rate establish "'an objective basis on which to make an initial estimate of the value of a lawyer's services.'" Luke AFB, 32 FLRA at 1100 (quoting Hensley, 461 U.S. at 433).

The Union and the Respondent both filed exceptions to the Judge's findings on the reasonableness of the fees requested by the Union. We will first address the components of the fee request to determine the extent to which fees may be awarded for the hours expended by the attorneys. Second, we will address the rate at which the fees should be calculated.

1. Components of the Fee Request

The Authority has previously described the requirements that are necessary for determining the reasonableness of fee awards under the Back Pay Act. See id. at 1098-1101. See also Overseas Education Association and U.S. Department of Defense Dependents Schools, 39 FLRA 1261, 1267 (1991) (OEA). In general, fee requests must be closely examined to ensure that the number of hours expended were reasonable. Customs Service, 46 FLRA at 1092. Any reduction in fees must be clearly explained. Id. Further, requests for attorney fees in connection with unfair labor practice cases must be carefully scrutinized to determine whether, and to what extent, participation by outside counsel contributed to the General Counsel's efforts in prosecuting a case. Id.; United States Department of Housing and Urban Development, Region VI, 24 FLRA 885 (1986) (HUD).

As a preliminary matter, we note that the Respondent does not specifically except to the 48.1 hours of fees awarded by the Judge. Rather, the Respondent argues that if the Authority determines that the Union should be awarded attorney fees, the Authority should grant fees for only the hours recommended by the Judge. As we have already determined that the Union is entitled to receive attorney fees and as no exceptions were filed specifically with respect to the 48.1 hours of fees awarded by the Judge, we adopt the Judge's conclusion that the Union may receive fees for those 48.1 hours.

We next examine whether, as contended by the Union, the Judge should have awarded the Union additional fees.

(a) Fees that Should Have Been Allowed

The Judge found that the issues raised by the Union "were all raised, litigated and briefed by [the] General Counsel" and that the Union "did not prevail on any of the separate issues it raised, litigated and briefed." Judge's Decision at 18 (emphasis in original). Accordingly, the Judge denied fees for time spent by Wolf preparing the post-hearing brief and the exceptions to the Judge's initial decision. The Union argues that the Union significantly added to the prosecution of the case. The Respondent argues that the Union's efforts duplicated those of the General Counsel because the Union "did not prevail on any claims other than those also raised by [the] General Counsel." Respondent's Exceptions at 14.

We find that the Union's post-hearing brief and exceptions did not primarily duplicate, or fail to contribute to, the General Counsel's efforts in prosecuting the case. The Authority's Rules and Regulations provide that a party to an unfair labor practice case has, among other things, the right to appear at any hearing with counsel and the right to file a post-hearing brief to the Judge. See 5 C.F.R. §§ 2423.16 and 2423.25. Because "these aspects of participation are entitlements under the Authority's Rules and Regulations, [the Authority] will not second-guess a party's decision to seek legal representation" for an unfair labor practice proceeding. HUD, 24 FLRA at 891. "Nor will [the Authority] conclude, absent a specific showing, that participation by outside counsel was either duplicative of, or failed to make a substantial contribution to, the General Counsel's efforts in prosecuting the case." Id. (citations omitted).

With respect to the post-hearing brief, we find that although the Union raised some of the same successful arguments as the General Counsel, the Union's brief presented the arguments in different ways and presented additional arguments not raised by the General Counsel. In particular, only the Union analyzed the development of the "'Moonlighting Rule'" and argued that the Respondent improperly deducted wages the employee could have earned concurrently in a "moonlighting" job. Union's Post-Hearing Brief at 18-20. Accordingly, we reject the Judge's finding, and the Respondent's assertion, that the Union did not prevail on any of the issues it raised that were different from those raised by the General Counsel. In the absence of a specific showing to the contrary by the Respondent, we conclude that the Union's brief did not primarily duplicate, or fail to contribute to, the General Counsel's efforts in prosecuting the case. See HUD. See also Luke AFB, 32 FLRA at 1105 (the union's brief is not "primarily duplicative" of the General Counsel's where the union's brief raises an issue raised by the General Counsel but also raises an issue based on a theory different from that used by the General Counsel).

With respect to the Union's exceptions, we find that rather than repeating the General Counsel's exceptions, the Union incorporated two of them by reference and concentrated on its successful argument, not pursued by the General Counsel, that the Respondent improperly deducted amounts that the employee could have earned in a concurrent "moonlighting" job. In these circumstances and in the absence of a specific showing to the contrary by the Respondent, we find that the Union's exceptions did not primarily duplicate, or fail to contribute to, the General Counsel's efforts in prosecuting the case.

The Judge also denied fees for time that the Union spent in its post-hearing brief and exceptions on the unsuccessful claims that the complaint should have been amended to allege that the Respondent was obligated to comply with the award as of April 14, 1989, and that the employee should have been compensated for adverse tax consequences. The Judge found that, pursuant to Hensley, "[t]hese two claims were distinct from the claims which were successful[.]" Judge's Decision at 16. The Union argues that the Judge improperly denied fees for the two claims because the claims were not distinct in all respects from claims that were successful.

The standards in Hensley are applicable to requests for attorney fees under the Back Pay Act. See Luke AFB, 32 FLRA at 1100. The Supreme Court stated in Hensley that a "fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit." Hensley, 461 U.S. at 435 (citation omitted). The Court further stated that "[l]itigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee." Id. The Court in Hensley "distinguished that situation from one where the prevailing party's different claims for relief are based on different facts and legal theories." Hanson v. Department of Transportation, Federal Aviation Administration, 28 MSPR 176, 181 (1985) (Hanson). Where the plaintiff has failed to prevail on a claim that is "distinct in all respects" from the successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of a reasonable fee. Hensley, 461 U.S. at 440. However, "[w]here a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have [the] attorney's fee reduced simply because the district court did not adopt each contention raised." Id.

The Judge and the Authority rejected the Union's claim that the complaint should have been amended to state that the Respondent was obligated to comply with the arbitration award as of April 14, 1989, rather than July 31, 1989. We find, contrary to the Judge, that this unsuccessful claim is not distinct in all respects from the successful claims. The Union's claim is based on the Respondent's failure to comply with the same arbitration award with which the General Counsel alleged, and the Authority found, the Respondent had failed to comply since July 31, 1989. The Union ultimately was successful in convincing the Judge and the Authority that the Respondent had failed to comply with the award and was unsuccessful only as to the specific date when the Respondent's failure began. As the Union's claim merely disputes the date from which to measure the Respondent's compliance with the same arbitration award, we find that the claim is related to the successful claim that the Respondent failed to comply with the award. Therefore, consistent with Hensley, we conclude that fees should have been allowed for time spent on this claim. See Hanson, 28 MSPR at 181 (no reduction of fees for unsuccessful claims where "all claims advanced by appellant, including those upon which he did not prevail, were based on the same facts").

The Judge rejected the Union's claim that the employee should have been compensated for adverse tax consequences,(7) but found that the employee should receive backpay for an additional 2-week period. In 44 FLRA 1306, the Union successfully argued to the Authority that the employee should not have had his overtime and "moonlighting" earnings deducted from the backpay award and won substantial relief for the employee. We find, contrary to the Judge, that the Union's unsuccessful claim that the employee suffered adverse tax consequences due to the Respondent's willful failure to comply with the award is not distinct in all respects from the successful remedial claims for additional backpay and for overtime and "moonlighting" earnings. All of these claims arise from the Respondent's failure to comply with the award and address the losses allegedly suffered by the employee. Consistent with Hensley, we find that because the Union won substantial relief, it "should not have [the] attorney's fee reduced simply because the [Judge] did not adopt each contention raised." Hensley, 461 U.S. at 440.

We find that the Judge improperly deducted fees for the time spent in preparing the Union's post-hearing brief and exceptions on the unsuccessful claims. Accordingly, consistent with our findings noted above, we conclude that the Union should have been allowed, as requested, fees for 36.5 hours spent preparing the post-hearing brief and 22.7 hours spent preparing the exceptions.

(b) Fee Denials that Need More Explanation

The Judge denied fees for time spent by Wolf: (1) preparing a letter to the Respondent demanding compliance with the award and discussing a letter drafted by the Respondent concerning the employee's reinstatement; (2) determining that the Respondent would not comply with the award; (3) researching the forum in which to appeal the Respondent's refusal to comply with the award; (4) consulting and updating the employee; (5) consulting with the supervisor and various Union representatives; and (6) studying the Judge's and the Authority's decisions. The Judge found that although some of these activities were "customary to an attorney-client relationship[,]" none of the activities "contribute[d] to [the] General Counsel's efforts in prosecuting the case." Judge's Decision at 16, 17.

The Union argues that the Judge improperly denied fees for these activities.

We stated above that consistent with Customs Service, any reduction in fees must be clearly explained. The Judge's only explanation for denying fees for the above-noted activities is that the activities did not contribute to the prosecution of the General Counsel's case as required by Authority case law. We find that the Judge's explanation is conclusory. That is, the Judge has not clearly explained the reason for denying fees for these activities within the meaning of Customs Service. Accordingly, we will remand the case to the Judge for a clear explanation of whether, or to what extent, fees should be granted or denied for these activities. See National Association of Government Employees, Local R5-188 and U.S. Department of the Air Force, Seymour Johnson Air Force Base, North Carolina, 46 FLRA 458, 465-66 (1992) (the Authority remanded an attorney fee award where the award was conclusory and failed to set forth a detailed and reasoned explanation on the reasonableness of denying or awarding fees for certain activities). See also Defense Mapping Agency, 47 FLRA at 1197-98.

The Judge also denied fees for time claimed by Schneider in 1990 and 1991 for consulting with Wolf because the Judge found that that activity "did not contribute to [the] General Counsel's efforts in prosecuting the case[.]" Judge's Decision at 18. The fact that an attorney's participation in a case was limited to administrative or supervisory functions is not, by itself, a sufficient basis for denying attorney fees. OEA, 39 FLRA at 1268. A denial of fees to an attorney whose participation is limited to supervisory functions should be based on a finding that the functions performed by that attorney were either insufficiently related to the case or were duplicative of work performed by the principal counsel. See OEA, 39 FLRA at 1268-69. We find that the Judge's explanation is conclusory. That is, the Judge has not clearly explained the reason for denying fees for these activities within the meaning of Customs Service. Accordingly, we will remand the case to the Judge for a clear explanation of whether, or to what extent, fees should be granted or denied for this activity.

The Judge also failed to award fees for time spent by Wolf on the following activities: (1) a phone call to one of two Union representatives on August 29, 1989;(8) (2) a call to the employee on October 6, 1989; (3) reviewing the answer on March 3, 1990; (4) various communications with the Respondent's attorney in 1990 and 1991; (5) studying the General Counsel's and the Respondent's post-hearing briefs; (6) matters relating to the hearing on January 29 and 30, 1991; (7) telephone calls to the General Counsel on August 27, 1991, and June 22, 1992, and to the Authority on June 9, 1992; (8) reviewing the transcript prior to filing the post-hearing brief; (9) filing and reviewing motions for extensions of time to file post-hearing briefs; and (10) reviewing the transcript on October 8, 1991, and the Respondent's motion for reconsideration on June 22, 1992. The Union objects to the Judge's failure to award fees. The Judge stated that the activities for which he awarded fees were those which did not duplicate the efforts of the General Counsel. However, the Judge did not specifically state why he disallowed fees for these particular activities and it is not apparent from the record whether these activities duplicated the efforts of the General Counsel or whether the time spent on any of these activities is excessive. As we are unable to determine from the record whether fees should be granted or denied for these activities, we will remand the case to the Judge for a clear explanation of whether, or to what extent, fees should be granted or denied for these activities.

The Judge also denied fees for time spent by Wolf on January 28, 1991, "in preparing to testify as a witness" and testifying "as a witness inasmuch as he was not then acting as an attorney in the litigation of this case[.]" Judge's Decision at 8. We find that the Judge has clearly explained the reason for denying fees for this activity within the meaning of Customs Service. However, because we are unable to determine from the record how much time should be deducted from January 28, 1991, for this activity, we will remand the case to the Judge to make that determination.

(c) Fees that Were Properly Denied

As we noted previously, the Union argues that the Judge should not have denied fees for any of the activities for which fees were requested except for 20 hours relating to backpay computation. In the absence of specific exceptions by the Union, we adopt the Judge's finding that 20 of the 39.5 hours requested for backpay computation should be denied.

The Judge denied fees for .4 hours spent relating to a FOIA request on February 13, 1991, and March 8, 1991, because the Judge determined that the request had "no known relevancy" to the case. Id. at 17. In the absence of any specific explanation by the Union as to the relevancy of the FOIA request, we find that the Judge has clearly explained the reason for denying these fees within the meaning of Customs Service.

The Judge further denied fees for 3.9 hours spent in relation to the Union's supplemental reply to the Respondent's opposition to the Judge's initial decision. The Judge offered no specific explanation for this deduction. However, the Authority's Rules and Regulations do not specifically provide for a supplemental reply to an opposition, and permission for supplemental submissions must be requested and granted pursuant to section 2429.26 of our Rules and Regulations. As the Union was not granted permission to file its reply and as the Authority in 44 FLRA 1306 specifically denied the Union's request that we consider its reply, we find that the fees were properly denied. See Logan v. U.S. Department of Housing and Urban Development, 23 MSPR 345, 351 (1984) (counsel should not be compensated for preparing a motion for reconsideration by the presiding official where 5 C.F.R. § 1201.111 et seq. makes no provision for such a motion).

(d) Additional Fees

The Union requests an additional 5 hours of fees for the time that Schneider spent preparing the opposition to the Respondent's exceptions in this case. Noting that the General Counsel filed no submissions with the Authority relating to the attorney fee award, we find that the Union has not duplicated the efforts of the General Counsel and has contributed to the case. See Luke AFB, 32 FLRA at 1106 (award of fees appropriate where the applicant's brief was the only opposition to the agency's exceptions). Accordingly, we find that the request is reasonable and that Union may receive fees for that time.

2. Rate of Fees

The Respondent contends that the Judge should have awarded fees on a cost-plus rather than a market-rate basis because Wolf committed ethical misconduct during the hearing and because the Union offered insufficient proof of the market rate in Austin. The Union argues that the Judge properly found that market-rate fees should be awarded and that $150 per hour was a reasonable market rate for Austin.

Where attorney fees are awarded under the Back Pay Act to successful employees represented by union attorneys, the Authority will use the market rate to calculate fees when the union places the fees in a separate legal representation fund. See Customs Service, 46 FLRA at 1094-95; Bureau of Prisons, 46 FLRA at 1006-07. Where a fee applicant has a prior billing history, the reasonable hourly rate will be counsel's established billing rate. "[T]he rates charged in private representations may afford relevant comparisons" in determining the market rate. Blum v. Stenson, 465 U.S. 886, 895-96 n.11 (1984) (Blum). In addition, to obtain an award at a customary billing rate, an applicant must furnish precise information concerning billing rates during the relevant time periods. Customs Service, 46 FLRA at 1095; Bureau of Prisons, 46 FLRA at 1008. Where the attorney involved is also an employee of a nonprofit organization, such as a union, which does not have a customary billing rate, it is necessary to consider evidence as to whether the rate requested is in line with the prevailing rate in the community during the relevant time periods. See U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and National Treasury Employees Union, 48 FLRA 931, 935 (1993). The fee applicant has the burden of producing "satisfactory evidence--in addition to the attorney's own affidavits--that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum, 465 U.S. at 895-96 n.11.

The Judge found, and the parties do not dispute, that the Union in this case maintains a separate legal representation fund. Accordingly, consistent with Customs Service and Bureau of Prisons, we find that the Union should be awarded fees based on the market rate.

We reject the Respondent's argument that fees should be awarded on a cost-plus basis because Wolf allegedly committed ethical misconduct during the hearing. As we stated previously, the Judge found, and we agree, that Wolf's conduct during the hearing was not prohibited by the Authority's Rules and Regulations and that the unfair labor practice proceeding was not the proper forum for determining whether Wolf's conduct violated the Texas Code of Professional Responsibility.

We find, however, that the Union has not produced satisfactory evidence, within the meaning of Blum, of the market rate in Austin for 1989 through 1992.(9) Although the affidavit submitted by the Union specifies rates in the Austin community for "similar work by attorneys, law clerks and paralegals of comparable qualifications[,]" nothing in the affidavit indicates what the billing rates were during many of the particular time periods relevant to this case. Affidavit and Sworn Declaration of B. Craig Deats at 2. We found previously that the Union is entitled to receive fees for certain services performed from at least May 30, 1989, through June 4, 1993.(10) However, the affidavit, dated January 19, 1993, lists one set of rates and does not specify what time period, other than 1993, those rates cover. We noted above that, to obtain an award of fees at a customary billing rate, the applicant has the burden of producing satisfactory evidence of the prevailing rates and that the applicant must furnish precise information, within the meaning of Customs Service and Bureau of Prisons, concerning billing rates during the relevant time periods.

As the Union has failed to furnish precise information concerning billing rates in Austin, Texas for 1989 through 1992, and has thereby failed to provide satisfactory evidence of that market rate, we will remand this case to the Judge for further findings on the prevailing market rate for Austin for those years. See Defense Mapping Agency, 47 FLRA at 1197-98 (the Authority remanded an attorney fee award where the award properly established the entitlement to attorney fees but failed to establish, among other things, what rate was charged).

C. Summary

In summary, we conclude that the Judge properly found that the Union is entitled to attorney fees under the Back Pay Act. We find that fees may be awarded for the 48.1 hours noted in the Judge's decision, 36.5 hours spent on the Union's post-hearing brief, 22.7 hours spent on the Union's exceptions to the Judge's initial decision, and 5 hours for the Union's opposition in the instant case. We further find that fees may not be awarded for 20 of the 39.5 hours spent on backpay computations, .4 hours relating to a FOIA request, and 3.9 hours spent on the Union's reply to the Respondent's opposition. Finally, we remand the case for further findings on the remainder of the application and on the prevailing market rate for Austin, Texas from 1989 to 1992.

VI. Order

The Motion for Attorney Fees is remanded for action consistent with this decision.




FOOTNOTES:
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1. The Charging Party argues that a portion of the Respondent's exceptions is deficient and should be dismissed pursuant to section 2423.27(b) of the Authority's Rules and Regulations. We conclude that the Respondent's exceptions are sufficiently clear so as to satisfy the requirements of section 2423.27.

2. United States Department of Treasury, Internal Revenue Service, Austin Compliance Center, Austin, Texas, 44 FLRA 1306 (1992), motion for reconsideration denied, 45 FLRA 525 (1992).

3. 5 U.S.C. § 7701(g)(1) provides, in relevant part, that:

an administrative law judge . . . designated to hear a case, may require payment by the agency involved of reasonable attorney fees incurred by an employee . . . if the employee . . . is the prevailing party and the . . . administrative law judge . . . determines that payment by the agency is warranted in the interest of justice . . . .

4. The Judge noted that: (1) both attorneys were located in Austin; (2) the case arose in Austin; and (3) the attorneys performed their work on this case in Austin. Accordingly, the Judge rejected the Union's assertion that the market rate of Washington, D.C. was the appropriate market rate for the award of attorney fees in this case.

5. The Judge noted that such non-employee witnesses are entitled to compensation solely pursuant to section 7132(c) of the Statute.

6. The Union states that the "only amount that arguably should be properly deducted from the Union's [a]pplication is the 20 hours already deducted by the [Judge] in the area of bac