49:0858(82)AR - - HHS, SSA, Baltimore, MD and AFGE, Local 1923 - - 1994 FLRAdec AR - - v49 p858
[ v49 p858 ]
The decision of the Authority follows:
49 FLRA No. 82
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
April 29, 1994
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Jonathan E. Kaufman filed by 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 filed an opposition to the Union's exceptions.
The Arbitrator denied the Union attorney's request for attorney fees in connection with a grievance. The Arbitrator found that the parties had agreed to the amount of attorney fees in a settlement agreement. The Arbitrator also held that, even in the absence of the settlement agreement, an award of attorney fees was not warranted under the Back Pay Act, 5 U.S.C. § 5596. For the following reasons, we conclude that the Union's exceptions fail to establish that the award is deficient and we will deny the exceptions.
II. Background and Arbitrator's Award
Prior to the arbitration in this case, the Union had filed a grievance asserting that certain Agency employees were entitled to overtime pay and night pay differentials for work performed at their homes since 1982. The grievance was not resolved and was submitted to arbitration before Arbitrator Joseph M. Stone. Arbitrator Stone issued an award in April 1989, granting in part and denying in part the grievance. Both parties filed exceptions to Arbitrator Stone's award with the Authority.
On October 31, 1990, in U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, Local 1923, 37 FLRA 1469 (1990) (SSA), the Authority found that the award was deficient, modified part of the award, and vacated that part of the award in which Arbitrator Stone denied backpay for overtime for answering telephone calls at home. The Authority directed the parties to make the determinations as to which employees were entitled to compensation and the amount of compensation to which they were entitled for answering telephone calls at home. The Authority stated that "[a]ppropriate means for making these determinations would include mutual agreement of the parties, resubmission to [Arbitrator Stone], or submission to arbitration before another arbitrator." Id. at 1479-80 (citation omitted).
On November 19, 1990, the Union's attorney, Irving Becker, submitted a request for attorney fees to Arbitrator Stone for work performed in SSA from February 23, 1988, through November 19, 1990. The parties resolved the issue of attorney fees in a settlement agreement on March 25, 1991, in which the Agency agreed to pay the Union's attorney $25,000 in attorney fees and the attorney "agreed to accept the $25,000 'in full settlement and satisfaction of all attorneys fees in connection with [SSA].'" Award at 4 (quoting Settlement Agreement As To Attorney Fees at 2).(*)
In March 1993, after a final agreement was reached on the amount of compensation for the grievants in the SSA case, the Union's attorney submitted a request for additional attorney fees for his services in the negotiation of the grievants' compensation. The Union's attorney "requested $4,584 in fees for 25 hours of work performed from 1988 through 1992" and "$18,581.25 in fees for work performed from 1991 through March of 1993." Id. The Agency denied this request and the matter was submitted to arbitration. During the arbitration proceeding, the Union's attorney also requested an additional amount of attorney fees for preparing for the arbitration. The Arbitrator framed the issue at arbitration as:
Whether claimant is entitled to attorney fees beyond the amount specified in a signed settlement agreement dated March 25, 1991.
Id. at 1.
The Union's attorney contended before the Arbitrator that "the settlement agreement [did] not preclude him from obtaining fees for work that was not a part of the original fee application submitted to Arbitrator Stone." Id. at 5. The Arbitrator noted that the Union's attorney claimed "for the first time in his response brief, that the fees he requested were for work he performed on behalf of three separate classes of claimants." Id. at 7. The Arbitrator stated that the three classes of claimants were the original grievants in SSA, employees who filed claims after the decision in SSA, and supervisors who were not claimants in SSA.
The Agency asserted before the Arbitrator that the settlement agreement precluded the Union's attorney from receiving any additional attorney fees and that the Union's attorney was not entitled to additional fees under the Back Pay Act because he did not perform legal work. Rather, the Agency contended, the work performed by the attorney was administrative. The Agency also contended that attorney fees were not appropriate for the negotiations over the amount of backpay due the grievants because the negotiations did not constitute litigation and, therefore, the grievants were not prevailing parties. The Agency maintained that the attorney fee request did not meet any of the other requirements for an award of attorney fees under the Back Pay Act, including the requirements for a showing that the fees would be in the interest of justice and that the amount requested was reasonable.
The Arbitrator examined the settlement agreement and noted that the agreement provided that the payment of $25,000 in attorney fees was "in 'full settlement' of 'all attorney's fees in connection with' the aforementioned arbitration case [in SSA]." Id. at 10 (quoting Settlement Agreement As To Attorney Fees at 2). The Arbitrator stated:
This language is quite broad. There is no reservation of [Mr. Becker's] right to make a subsequent fee request. In order for Mr. Becker's claim to go forward, therefore, he has to argue that these fees were, in effect, for a new case. In his rebuttal comments, Mr. Becker clearly adopts this view by arguing without significant reference to the prior arbitration case.
Id. at 11.
The Arbitrator noted that the case before him had a different case number and involved "claims for fees by Mr. Becker for work done on behalf of the original grievants [in the case before Arbitrator Stone in SSA], other grievants who filed after the first case, and some non-bargaining unit employees." Id. The Arbitrator stated:
The fact remains, however, that this matter principally derives itself from the original arbitration case and the subsequent FLRA decision. Both that case and the FLRA decision are referenced in the March 25, 1991 agreement. The FLRA decision, furthermore, specifically directed the parties to either negotiate over the back pay for the grievants or  submit the matter to arbitration. This is much like an appellate court that returns a matter to a trial court for further deliberation. That is not a new proceeding. In addition, the work that Mr. Becker performed and is claiming fees for directly related to his negotiations on behalf of these grievants and the subsequent filing of a request for arbitration in accordance with that FLRA decision. The "connection" between the matter before me and the aforementioned arbitration case is a direct one. Based on this, I believe that Mr. Becker already has agreed to the amount of fees he would receive in this matter.
Id. at 11-12.
With regard to the arguments concerning entitlement of the Union's attorney to attorney fees under the Back Pay Act, the Arbitrator stated that even if the settlement agreement did not cover the fees requested by the Union's attorney, he had "trouble with at least two (2) elements that need to be established for attorney's fees payments under the Back Pay Act." Id. The Arbitrator noted that the criteria for awarding attorney fees are set forth in 5 U.S.C. § 7701(g). He found that the first criterion had been met and that the attorney had an attorney-client relationship with the Union. However, the Arbitrator found that the Union had not established that it was a prevailing party in the negotiations that followed the decision in SSA. Rather, he found that the parties had merely negotiated concerning what type of information was needed in order for a claim for backpay pursuant to the decision in SSA to be considered. The Arbitrator stated that "this concept of prevailing party involves instances in which one side has been successful in a 'litigation.' Mr. Becker appears to be extending this theory to negotiation situations." Id. at 13. The Arbitrator found that there was nothing "adversarial with respect to the specific claims[,]" and he concluded that "these facts do not support a finding that the grievants were prevailing parties as defined above." Id. at 14.
The Arbitrator also found that, even if the amount of attorney fees were not limited by the settlement agreement, an award of attorney fees would not be in the interest of justice. He rejected, "for lack of testimony or persuasive evidence[,]" the argument of the Union's attorney that "the circumstances supported a finding that fees should be awarded in the interest of justice because 'some of the [A]gency officials' did not appear to accept and work with existing statutory and regulatory requirements." Id. at 15. The Arbitrator found that the interest of justice standard applied in instances in which an agency engaged in gross misconduct and "Mr. Becker did not provide sufficient evidence to establish this." Id.
The Arbitrator made the following rulings and denied the attorney fee request:
1. Mr. Becker signed a[n] Attorney's Fee Agreement on March 25, 1991, that would pay him all of his fees and was a full settlement in connection with the arbitration case.
2. That arbitration case and the subsequent FLRA decision directly spawned the additional work performed by Mr. Becker on behalf of the grievants.
3. Even if this were a separate case not governed by the March 25th agreement, Mr. Becker failed to establish that he was the 'prevailing party' or that the interest of justice' would be served by awarding him fees.
Id. at 16.
III. Positions of the Parties
A. The Union
The Union contends that the award is contrary to provisions of the Back Pay Act and rules and regulations pertaining to the awarding of attorney fees. In particular, the Union contends that the Arbitrator erred by finding that: (1) the Union was not a prevailing party in the matter of negotiating a backpay settlement pursuant to SSA; and (2) an award of backpay would not be in the interest of justice. The Union asserts that attorney fees can be awarded even in instances, such as this, in which the Union prevailed on behalf of grievants through a settlement instead of litigation. The Union maintains that the requirement that attorney fees be in the interest of justice was met because the Agency knew or should have known that it would not prevail in its efforts to reduce the amount of backpay that was due to claimants pursuant to SSA.
With respect to the Arbitrator's enforcement of the settlement agreement, the Union contends that the Arbitrator based his award on nonfacts and that the award is not based on the evidence. The Union maintains that the Arbitrator misunderstood the Authority's decision in SSA and that he erroneously regarded that decision as a remand, rather than a final decision. The Union asserts that the award is based on a nonfact because "[t]here is no evidence whatsoever that the fees referred to in the Settlement Agreement of March 25, 1991, dealt with fees which would be incurred in the future." Exceptions at 12. The Union maintains that "there is no basis whatsoever for the Arbitrator to speculate, or conjecture that the purpose of the Agreement of March 25, , was to forever bar the Applicant to file for fees for work performed subsequent to November 21, 1990." Id. at 13. The Union also maintains that the award is incomplete because the Arbitrator did not address the claim for attorney fees for representing employees who were not parties to the original grievance in SSA.
B. The Agency
The Agency asserts that the Arbitrator properly interpreted the plain language of the settlement agreement to conclude that the Union's attorney had agreed with the Agency to accept $25,000 in settlement of all attorney fees in connection with SSA. The Agency maintains that the Union's attorney was aware of what he agreed to and that he signed the agreement voluntarily. The Agency contends that the Union is merely disagreeing with the Arbitrator's interpretation and application of the settlement agreement.
The Agency further contends that the Arbitrator correctly found that the Union was not a prevailing party and that an award of attorney fees was not in the interest of justice. The Agency maintains that the Union has failed to establish that the negotiation of the backpay settlement arising out of SSA constituted litigation in which the Union was a prevailing party. Finally, the Agency contends that the award is complete and that the Arbitrator did address the Union's claims for attorney fees in connection with the backpay claims of employees who were not among the original grievants in SSA.
IV. Analysis and Conclusions
When exceptions are filed to arbitration awards resolving requests for attorney fees under the Back Pay Act, the Authority's role is to ensure that the arbitrator has complied with applicable statutory standards. See Federal Deposit Insurance Corporation, Chicago Region and National Treasury Employees Union Chapter 242, 45 FLRA 437, 453 (1992). When the exceptions concern the standards established under 5 U.S.C. § 7701(g), the Authority applies the decisions of the Merit Systems Protection Board (MSPB) and the U.S. Court of Appeals for the Federal Circuit. Id.
In this case, the issue before the Arbitrator concerned whether the Union's attorney was entitled to additional fees beyond those specified in the settlement agreement of March 25, 1991. In cases similar to this, the MSPB, the Federal Circuit, and another court of appeals have recognized that parties to a dispute for which attorney fees may be awarded can agree as to the appropriate amount of such fees. In such cases, the party requesting fees can effectively waive its claims to attorney fees beyond the amount agreed upon. See Paderick v. Office of Personnel Management, 54 MSPR 456 (1992), citing Greco v. Department of the Army, 852 F.2d 558, 560-61 (Fed. Cir. 1988) (Greco) and Wakefield v. Matthews, 852 F.2d 482 (9th Cir. 1988). In Greco, the court found, based on the language in a settlement agreement covering attorney fees, that the agreement was applicable to all aspects of the underlying case, including compliance. With respect to the argument that the settlement agreement should not be interpreted to extend to future proceedings arising from the case, the court stated:
While it may be true that the parties could not have foreseen the protracted compliance proceeding which developed, it is clear that the parties' intent was to end their dispute. Final resolution of the case could only be achieved upon petitioner's restoration, as far as practicable, to the status quo ante. In our view it would be unreasonable to read the agreement in a manner so narrow as to defeat the intent of the parties.
Greco, 852 F.2d at 561.
In this case, the Arbitrator interpreted the parties' settlement agreement and concluded, based on the plain language of the agreement, that the parties intended for the Union's attorney to receive $25,000 to cover all attorney fees in connection with SSA. The Arbitrator further concluded that the work for which additional attorney fees were claimed was work performed in connection with SSA. Consequently, we find that the Arbitrator was enforcing the provisions of a settlement agreement on attorney fees in a manner that was consistent with the procedures used by MSPB and Federal courts in the above cases.
In its exceptions, the Union does not claim that the Arbitrator's interpretation of the settlement agreement is erroneous, but rather that the award is based on a nonfact and is incomplete. We will find an award deficient under the Statute because it is based on a nonfact if the central fact underlying the award is clearly erroneous, but for which the arbitrator would have reached a different result. U.S. Small Business Administration, Washington, D.C. and American Federation of Government Employees, Local 2532, 42 FLRA 890, 899 (1991) (SBA). However, the Union has not demonstrated that the Arbitrator made any factual errors in reaching his conclusion that the settlement agreement limited the amount of attorney fees to $25,000. Instead, the Union is merely disagreeing with the Arbitrator's conclusion in that regard. In similar circumstances, we have determined that where "disputed conclusions by the [a]rbitrator are not facts, the [u]nion has failed to demonstrate that the award is deficient because it is based on nonfacts." SBA, 42 FLRA at 899. See also American Federation of Government Employees, Local 2921 and U.S. Department of Defense, Army and Air Force Exchange Service, Dallas, Texas, 47 FLRA 446, 452 (1993) (exception constituted mere disagreement with an arbitrator's interpretation of the parties' agreement and did not demonstrate that an award was based on a nonfact). Consequently, the Union has failed to demonstrate that the award is deficient because it is based on a nonfact.
Rather, we find that the Union's exceptions that the Arbitrator erred in his findings concerning the effect of the settlement agreement and that the award is incomplete constitute a contention that the award fails to draw its essence from the parties' agreement. To demonstrate that an award is deficient on this ground, a party must show that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact, and so unconnected with the wording and the purpose of the agreement as to manifest an infidelity to the obligation of the arbitrator; (3) evidences a manifest disregard for the agreement; or (4) does not represent a plausible interpretation of the agreement. See U.S. Department of the Army, Red River Army Depot, Texarkana, Texas and National Association of Government Employees, Local R14-52, 46 FLRA 1292, 1294 (1993).
As noted above, the Arbitrator found that: (1) the settlement agreement provided that the Union's attorney agreed to accept the amount of $25,000 in full satisfaction of all attorney fees claimed; and (2) the additional fees claimed for work performed in the negotiations over specific backpay for each claimant, including those claimants who were not original grievants in SSA, were covered by the agreement. The Union has not shown that the Arbitrator's conclusions and interpretation of the settlement agreement are irrational, implausible, or unconnected to the wording and purpose of the agreement. Consequently, the Union has not established that the award fails to draw its essence from the agreement and we will deny this exception.
With respect to the Union's other exceptions, we note that the basis on which the Arbitrator resolved the attorney fee request was the settlement agreement. As additional alternative grounds for his award denying the attorney fee request, the Arbitrator set forth his opinion that, in the absence of the settlement agreement as a basis for denying the request, he would also have denied the request on the grounds that the Union was not a prevailing party and that the additional attorney fees would not be in the interest of justice under the standards of 5 U.S.C. § 7701(g)(1). However, inasmuch as the parties had agreed that attorney fees were warranted and had fixed the amount of attorney fees in the settlement agreement, it was not necessary for the Arbitrator to examine the requirements of 5 U.S.C. § 7701(g)(1) in order to render an award resolving the specific issue before him. His interpretation and application of the settlement agreement provided a sufficient basis for the award in these circumstances. Consequently, it is not necessary for us to discuss the Union's allegations that the award is contrary to law and regulations. See Greco, 852 F.2d at 561 ("Because we decide this case on the basis of the settlement agreement, we do not reach the merits of petitioner's 5 U.S.C. § 7701(g) claim."). Accordingly, we do not address the Union's contentions regarding 5 U.S.C. § 7701(g) or the Arbitrator's conclusions with respect to the application of 5 U.S.C. § 7701(g) in this case.
The Union's exceptions are denied.
The "Settlement Agreement As To Attorney Fees" provides, in relevant part:
1. The Agency agrees to pay the Attorney the sum of Twenty-five thousand dollars ($25,000) in full settlement and satisfaction of all attorneys fees in connection with [U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, Local 1923, 37 FLRA 1469 (1990)].
2. The Attorney agrees to accept the payment of the sum of Twenty-five thousand dollars ($25,000) in full settlement and satisfaction of attorneys fees in connection with [U.S. Department of Health and Human Services, Social Security Administratio