53:1657(148)AR - - FDIC, Division of Information Resources Management, Atlanta, GA and NTEU - - 1998 FLRAdec AR - - v53 p1657
[ v53 p1657 ]
The decision of the Authority follows:
53 FLRA No. 148
FEDERAL LABOR RELATIONS AUTHORITY
FEDERAL DEPOSIT INSURANCE CORPORATION
DIVISION OF INFORMATION RESOURCE MANAGEMENT
NATIONAL TREASURY EMPLOYEES UNION
March 31, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S.
Wasserman and Dale Cabaniss, Members.
I. Statement of the Case
This matter is before the Authority on an exception to an award of Arbitrator James L. Sherman filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exception.
The Arbitrator awarded the Union attorney fees and expenses. The Agency fails to establish that the award is deficient. Accordingly, we deny the Agency's exception.
II. Background and Arbitrator's Awards
In his initial award, the Arbitrator reversed the grievant's suspension and awarded her backpay. Thereafter, the Union filed a motion for attorney fees that included 210.45 hours of work by the Union's field representative, a professionally trained paralegal, 10 hours of work by the Union's national counsel, an attorney, and $72.00 in travel expenses for the field representative. In opposition, the Agency contended that the fees were not incurred within the meaning of the Back Pay Act, 5 U.S.C. § 5596. The Agency maintained that there was no attorney-client relationship between the Union's national counsel and the grievant, that the Union's field representative handled all aspects of the grievance, and that the field representative was not entitled to fees.
The Arbitrator ruled that there was an attorney-client relationship between the grievant and the national counsel and that attorney fees were awardable for the services of the field representative. He concluded that attorney fees are proper for non-attorney representatives when they are directly supervised in all functions by an attorney. Fee Award at 4-5 (citing Anderson v. Government Printing Office, 55 MSPR 548 (1992) (Anderson); Mitchell v. U.S. Postal Service, 6 MSPR 22 (1981) (Mitchell)).
In awarding fees, the Arbitrator found that the national counsel had exclusive authority to evaluate the merits of the grievant's case, to decide whether to invoke arbitration, and to direct all aspects of the field representative's preparation and presentation of the grievant's case. Accordingly, the Arbitrator concluded that the field representative had acted as the national counsel's agent. The Arbitrator also reviewed the time records that showed that the field representative and the national counsel met to discuss the case on 10 occasions for a total of 10 hours. In the Arbitrator's judgment, this constituted supervision by the national counsel.
For these reasons, the Arbitrator determined that the amount of fees requested had been incurred. Finding that all other requirements of the Back Pay Act had been met, the Arbitrator awarded the Union attorney fees and expenses in the amount requested.
III. Positions of the Parties
A. Agency's Exception
The Agency asserts that in determining whether to award fees under the Back Pay Act, an arbitrator must conform to the standards established under the Civil Service Reform Act. See Exception at 6 (citing Naval Air Development Center, Department of the Navy and American Federation of Government Employees, Local 1928, AFL-CIO, 21 FLRA 131 (1986) (Naval Air Development Center)). The Agency contends that the award is contrary to those standards because the grievant did not incur the fees awarded by the Arbitrator for the services of the field representative.
The Agency asserts that fees are incurred when an attorney-client relationship exists and the attorney has rendered legal services on behalf of the grievant. The Agency maintains that essential elements of an attorney-client relationship are a client's belief that the client is consulting an attorney and the client's manifest intention to seek professional legal advice, elements that are lacking in this case. The Agency maintains that there is no evidence that the grievant ever consulted the national counsel for legal advice and that there can be no attorney-client relationship between the grievant and the field representative because he is not an attorney. The Agency distinguishes the field representative's actions from paralegal services in conjunction with an appropriate award of fees to an attorney. The Agency alleges that the field representative held himself out as the grievant's sole representative, not as a paralegal.
The Agency asserts that attorney fees are precluded when the employee is represented by a non-attorney. See id. at 9-10 (citing National Gallery of Art and American Federation of Government Employees, Local 1831, 39 FLRA 226, 236 (1991) (National Gallery of Art); Horton v. U.S. Postal Service, 7 MSPR 232 (1981) (Horton)). The Agency claims that Mitchell and Anderson, on which the Arbitrator relied, are distinguishable because in each case the employee initially retained the services of an attorney. The Agency also relies on an arbitration award of Arbitrator Jacks, who ruled that, for charges for the services of paralegals to be awarded, the services must be ancillary to the principal legal services performed by an attorney. The Agency claims that the paralegal services in this case were not ancillary to the legal services of the national counsel.
The Agency also contends that because the field representative is not entitled to attorney fees, he is not entitled to reimbursement of his expenses, as awarded by the Arbitrator.
B. Union's Opposition
The Union contends that the Arbitrator properly found that an attorney-client relationship existed between the grievant and the Union's national counsel and that the grievant incurred the attorney fees awarded by the Arbitrator. The Union also contends that the Agency's failure to except to the award of fees for the legal services rendered on behalf of the grievant by the national counsel is an admission by the Agency of the existence of the attorney-client relationship between the grievant and the national counsel.
The Union argues that, as found by the Arbitrator, Mitchell and Anderson are controlling. The Union claims that the Agency's reliance on National Gallery of Art and Horton is misplaced because in each case no attorney supervised or directed the non-attorney representative. The Union also claims that the Agency's reliance on the arbitration award of Arbitrator Jacks is misplaced because arbitration awards are not precedential and because, in any event, the award is inconsistent with Mitchell and Anderson.
IV. Analysis and Conclusions
The Agency's exception involves the consistency of the award with law. Consequently, we review the questions of law raised by the exception and the award de novo. See National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995).
A. Statutory Requirements for Entitlement to Attorney Fees
The fees in this case were awarded pursuant to the Back Pay Act. 5 U.S.C. § 5596. That statute requires, among other things, that an award of fees must be in accordance with the standards established under 5 U.S.C. § 7701(g), which pertains to attorney fee awards by the Merit Systems Protection Board (MSPB). See 5 U.S.C. § 5596(b)(1)(A)(ii); U.S. Department of Defense, Defense Distribution Region East, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 51 FLRA 155, 158 (1995) (DDRE). Section 7701(g)(1) applies to all cases except those involving allegations of employment discrimination and applies in this case. When exceptions concern the attorney fee standards established under section 7701(g)(1), the Authority looks to the decisions of the MSPB and the U.S. Court of Appeals for the Federal Circuit for guidance. See DDRE, 51 FLRA at 160 n.5.
Among the requirements for an award of attorney fees under section 7701(g)(1) is the requirement that the fees must have been incurred by the employee. See DDRE, 51 FLRA at 158. Because the Agency only challenges the Arbitrator's determination that the fees were incurred, we do not need to consider the other requirements of the Back Pay Act. See U.S. Department of Veterans Affairs Medical Center, North Chicago, Illinois and American Federation of Government Employees, Local 2107, 52 FLRA 387, 398 n.9 (1996).
B. Incurring Attorney Fees for the Work of Non-attorneys
Attorney fees are incurred by an employee within the meaning of section 7701(g)(1) when an attorney-client relationship exists and the attorney has rendered legal services on behalf of the employee. See U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 48 FLRA 1040, 1047 (1993). Both the Authority and the MSPB have interpreted this requirement as requiring the denial of fees to non-attorney representatives. See National Gallery of Art; Horton. In addition, regulations implementing the Back Pay Act provide that "attorney fees shall be allowed only for the services of members of the Bar and for the services of law clerks, paralegals, or law students, when assisting members of the Bar." 5 C.F.R. § 550.807(f).
In National Gallery of Art, the Authority overturned an arbitrator's award of attorney fees for an individual who appeared on behalf of the union at the hearing. As pertinent here, the Authority concluded that the award conflicted with section 550.807(f). The Authority noted that as the individual was neither a member of a law firm nor a union-employed attorney, it was not apparent that the individual's participation warranted an award of attorney fees. In Horton, the MSPB ruled that an employee was not entitled to an award of attorney fees when he was represented by an individual who was not an attorney. 7 MSPR at 235.
As section 550.807(f) makes clear, however, compensation is available for clerks, paralegals, or law students who are assisting in representation provided by an attorney. The rationale for including charges for such non-attorneys in fee awards is that they provide necessary services which, were they performed by attorneys, would be more costly. See Social Security Administration v. Goodman, 33 MSPR 325, 337 (1987); see also Cook v. Brown, 68 F.3d 447, 453 (Fed. Cir. 1995).
In Mitchell and Anderson, the MSPB awarded attorney fees under section 7701(g)(1) for the services of a legal assistant and law students, respectively. In Mitchell, the employee was represented at the hearing by a law school graduate, who was a legal assistant to an attorney with the retained law firm, but who was not a member of the bar. In Anderson, the employee retained an attorney, who was employed by a law school and practiced with a law school clinic. The employee was represented at the hearing by law students from the clinic. In both cases, the MSPB ruled that an award of fees for the services of the non-attorneys was appropriate because an attorney-client relationship existed and the involvement of the nonattorneys was under the direct supervision of, and as agent for, the retained attorney. Anderson, 55 MSPR at 551; Mitchell, 6 MSPR at 23.
C. The Arbitrator's Decision Is Consistent with These Standards
In this case, the Arbitrator found that the national counsel, an attorney, was responsible for directing and overseeing all aspects of the case. In addition, he found that the field representative performed services as a paralegal under the supervision of, and as the agent for, the national counsel. Under these circumstances, the Arbitrator's finding of an attorney-client relationship and the award of fees for the paralegal services of the field representative is consistent with case precedent and section 550.807(f). In particular, the award is consistent with Mitchell and Anderson and distinguishable from National Gallery of Art and Horton. Further, we do not agree with the Agency that a different result is dictated by the Authority's statement, in Naval Air Development Center, 21 FLRA at 136, that "[a]n attorney-client relationship must exist and the attorney must have rendered legal services on behalf of the appellant." The Arbitrator found that the appropriate relationship existed and the regulation indicates that the services at issue may be considered compensable legal services.
We are not persuaded by the Agency's arguments that Mitchell and Anderson are not controlling in this case. We reject the Agency's attempt to distinguish these cases on the basis that the representative here was not a law school graduate or student. There is nothing in Mitchell or Anderson that precludes an award of fees for paralegal services. Moreover, section 550.807(f) specifically provides for an award of fees for the services of paralegals, in addition to providing for fees for the services of law clerks and law students.
We also reject the Agency's argument that because there is no evidence that the grievant ever consulted with the national counsel, there necessarily was no attorney-client relationship in this case. Certainly, in the usual case, an attorney-client relationship is initiated by a client's intent to seek legal advice from an attorney. However, the Agency fails to establish any deficiency in the Arbitrator's finding that an attorney-client relationship existed under the circumstances of this case.
The Arbitrator found that, in the context of the Union's representation of the grievant, the grievant's awareness of the attorney's role was not critical. He reasoned that "with an attorney representing the Agency, she, and all employees, most likely assume that their union dues includes payment for legal representation when necessary." Award at 7. Furthermore, the Agency has not excepted to the Arbitrator's award of fees for the 10 hours of work performed by the national counsel on the case. Thus, the Agency has, in effect, conceded that an attorney-client relationship existed between the national counsel and the grievant.
Finally, we reject the Agency's argument that the field representative was not acting as a paralegal assisting an attorney, but as the grievant's representative. The Agency's reliance on the arbitration award of Arbitrator Jacks to this effect is misplaced because arbitration awards are not precedential, see American Federation of Government Employees, Local 2250 and U.S. Department of Veterans Affairs Medical Center, Muskogee, Oklahoma, 52 FLRA 320, 323 (1996), and because the award of Arbitrator Jacks is not consistent with Mitchell or Anderson.
In both Mitchell and Anderson, the employees were represented by non-attorneys before the administrative judges and nothing in either decision indicates that these individuals were not acting as the employees' representatives. There is nothing to suggest that the governing standards go beyond the requirements expressly set out in Mitchell and Anderson: (1) the existence of an attorney-client relationship; and (2) the functioning of t