54:1594(137)AR - - NAGE Local R4-6 and Army, Fort Eustis, Virginia - - 1998 FLRAdec AR - - v54 p1594
[ v54 p1594 ]
The decision of the Authority follows:
54 FLRA No. 137
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
U.S. DEPARTMENT OF THE ARMY
FORT EUSTIS, VIRGINIA
November 30, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members.
Decision by Chair Segal for the Authority.
I. Statement of the Case
This matter is before the Authority on an exception to an award of Arbitrator Frederick U. Reel 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 Regulations. The Agency filed an opposition to the Union's exception.
On remand from the Authority, the Arbitrator addressed the Union's request for attorney fees and determined that the Union was entitled to attorney fees in an amount equaling one-fourth of that which it requested.
For the reasons that follow, we conclude that the Union has not established that the award is deficient under section 7122(a) of the Statute. Accordingly, we deny the Union's exception.
II. Background and Arbitrator's Award
In National Association of Government Employees, Local R4-6 and U.S. Department of the Army, Fort Eustis, Virginia, 52 FLRA 1522 (1997), the Authority denied, in part, and granted, in part, the Union's exceptions to the Arbitrator's initial award in this case. In the initial award, the Arbitrator resolved the Union's grievance requesting 8 hours of administrative leave to remedy the Agency's alleged violation of the parties' collective bargaining agreement when it closed for 1 day and granted administrative leave to all employees except the grievants. The Arbitrator found that the Agency violated the parties' agreement, as alleged in the grievance, but determined that the grievants should be granted only 2 hours of administrative leave to remedy the violation. The Arbitrator also determined that the grievants were not entitled to attorney fees because an award of leave did not constitute an award of backpay under the Back Pay Act.
On review, the Authority denied the Union's exceptions to the portion of the Arbitrator's award granting the grievants 2 hours of leave. However, the Authority found that the Arbitrator's determination that attorney fees could not be awarded was contrary to the Back Pay Act. The Authority remanded the award to the parties for submission to the Arbitrator for consideration of the issue of attorney fees.
On remand, the Arbitrator first found that the Union was the prevailing party in the underlying arbitration because the grievance had been sustained. Second, the Arbitrator found that an award of fees in this case was warranted in the interest of justice because the Agency had disregarded the parties' agreement in denying the grievants' administrative leave. Third, the Arbitrator found that the fees were incurred by the Union pursuant to its retainer of counsel.
Finally, the Arbitrator, noting that the Agency did not challenge the amount of fees claimed by the Union, found that the requested fee rate was reasonable. However, the Arbitrator declined to award all of the attorney fees sought at that rate by the Union. Specifically, the Arbitrator determined that because he "sustained the grievance to the extent of one-fourth of the amount claimed" -- 2 hours of administrative leave rather than 8 hours -- the Union was entitled to only one-fourth of the attorney fees requested. Award at 2. In making this determination, the Arbitrator quoted Texas State Teachers v. Grievant Independent School District, 489 U.S. 782, 790 (1989) (Texas State Teachers) (emphasis in original), in which the Supreme Court stated that "the degree of the plaintiff's success in relation to the other goals of the lawsuit is a factor critical to the determination of the size of a reasonable fee[.]" See Award at 2. The Arbitrator concluded that although the Union was entitled to attorney fees, a reasonable fee award in this case was one-fourth of that sought by the Union.
III. Positions of the Parties
A. Union's Exception
The Union claims that the award is deficient because it is inconsistent with the standards set forth in 5 U.S.C. § 7701(g)(1). The Union claims that nothing in section 7701(g)(1) or Merit Systems Protection Board (MSPB) case law permits an arbitrator to reduce an award of fees. The Union argues that the grievants are the prevailing parties because they received some relief, and therefore, the Union is entitled to the full amount of attorney fees sought in connection with the grievance. The Union also claims that the Arbitrator failed to "arrive at a fully articulated, reasoned decision on the issue of reasonable attorney fees[.]" Exception at 5.
B. Agency's Opposition
The Agency claims that "there is nothing in [section] 7701(g) which prohibits an arbitrator from reducing an attorney fee request because of the limited degree of success obtained by the grievant." Opposition at 3 (emphasis in the original). The Agency asserts that the Union's argument--that it is entitled to the entire fee request because the grievants are the prevailing party--is misplaced. According to the Agency, the Arbitrator's decision to reduce the fee award was based on his determination regarding the "reasonableness" of the fee, which is a determination that is "separate and distinct" from the "prevailing party" determination. Id.
The Agency also argues that the award should be "set aside" in its entirety. Id. at 6. Specifically, the Agency asserts that it agrees with the Union that the Arbitrator failed to provide a fully articulated, reasoned fee decision. In this respect, the Agency claims that the award is deficient because the Arbitrator failed to articulate his finding that the Union was the "prevailing party." Id. at 5.
IV. Analysis and Conclusions
A. The Agency's Exception Set Forth In Its Opposition Is Dismissed
In its opposition, the Agency requests that the Arbitrator's award be "set aside" because the Arbitrator failed to fully articulate his finding that the Union was the prevailing party. Id. at 6. Although the Agency asserts that it is agreeing with the Union, the Agency is actually making a new argument regarding the deficiency of the award. In this regard, the Union disputes the adequacy of the Arbitrator's reasonableness determination, and the Agency is challenging the adequacy of the Arbitrator's prevailing party determination. Further, the Union is seeking to have the fee award increased, and the Agency is seeking to have the award set aside in its entirety. Because the Agency is asserting a separate and distinct ground for finding the award deficient, the Agency's argument constitutes a separate exception to the award.
The time limit for filing an exception to an arbitration award is 30 days beginning on the date the award is served on the filing party. 5 C.F.R. § 2425.1. The Arbitrator's award was dated and served on the parties on July 31, 1997. The Agency's exception contained in its opposition to the Union's exception was filed on October 1, 1997, more than 30 days after the Arbitrator's award was served on the parties. Consequently, the Agency's exception to the Arbitrator's award is untimely, and we dismiss the exception. See U.S. Department of Veterans Affairs, West Los Angeles Medical Center, Los Angeles, California and American Federation of Government Employees, Local 1061, 46 FLRA 853, 859-60 (1992)(dismissing as untimely the Union's exception set forth in its opposition).
B. The Award Of Attorney Fees Is Not Contrary To 5 U.S.C. § 7701(g)(1)
The Union's exception involves the award's consistency with law. Thus, we review the questions of law raised by the Union's exception to the Arbitrator's 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). In applying a de novo standard of review, the Authority assesses whether the arbitrator's legal conclusions are consistent with the applicable standard of law. See National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
1. The Statutory Requirements for Attorney Fees
The threshold requirement for entitlement to attorney fees under the Back Pay Act, 5 U.S.C. § 5596, is a finding that the grievant was affected by an unjustified or unwarranted personnel action, which resulted in the withdrawal or reduction of the grievant's pay, allowances, or differentials. See 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). Once such a finding is made, the Act further requires that an award of fees must be: (1) in conjunction with an award of backpay to the grievant on correction of the personnel action; (2) reasonable and related to the personnel action; and (3) in accordance with the standards established under 5 U.S.C. § 7701(g), which pertains to attorney fee awards by the MSPB. See id. The standards established under 5 U.S.C. § 7701(g)(1), which apply in 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. See id. (citing American Federation of Government Employees, Local 12 and U.S. Department of Labor, Washington, D.C., 38 FLRA 1240, 1248 (1990)).
Because the Union challenges only the Arbitrator's determination regarding whether the award of fees was reasonable, we do not consider the other requirements of the Back Pay Act or section 7701(g)(1). 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).
2. Consideration of a Grievant's Degree of Success In Determining Reasonable Attorney Fees Is Not Inconsistent With 5 U.S.C. § 7701(g)
In U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 791-93 (1998) (Dependents Schools), the Authority resolved an exception to an arbitrator's award in which the agency contended that the amount of attorney fees awarded was not reasonable under 5 U.S.C. § 7701(g). As relevant here, the Authority applied the Supreme Court's formulation of "reasonableness" for attorney fees under the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988.(1) Id. at 791. In this regard, the Supreme Court held in Farrar v. Hobby, 506 U.S. 103, 114 (1992) (Farrar), that the extent to which a plaintiff prevailed in the underlying litigation is the most critical factor to consider in determining reasonable attorney fees. See also Texas State Teachers, 489 U.S. at 791-93 (finding that the extent of the plaintiff's overall success goes to the reasonableness of the award). The Court stated "that if 'a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.'" Farrar, 506 U.S. at 114 (quoting Hensley v. Eckerhart, 461 U.S. 424, 436 (1983) (Hensley). The Supreme Court has also held that, in cases involving a single successful claim, "[a] reduced fee award is appropriate if the relief, however significant, is limited in comparison to the scope of the litigation as a whole." Hensley, 461 U.S. at 440; see also id. at 435-36.
The Authority's application of the Supreme Court precedent in Dependents Schools, 54 FLRA at 791, is consistent with decisions of the MSPB. The MSPB, also applying this precedent, has held that in determining the "reasonableness" of attorney fees under 5 U.S.C. § 7701(g), it is necessary to consider whether a fee award should be reduced because the relief ordered was significantly less than what was sought. See, e.g., Stein v. United States Postal Service, 65 MSPR 685, 690 (1994) (Stein). In this respect, the MSPB has stated that in circumstances where the relief ordered is significantly less than that sought, "an award may be reduced either by identifying the hours associated with unsuccessful claims or by simply reducing it to account for the limited success." Id. (citing Smit v. Department of the Treasury, 61 MSPR 612, 619 (1994) (Smit)). The MSPB has also held that "when more than one claim for relief is made and the claims involve a common core of facts or are based on related legal theories, the fee determination should reflect the significance of the overall relief obtained in relation to the hours reasonably expended." Smit, 61 MSPR at 618-19. See also Heath v. Department of Transportation, 66 MSPR 101, 105 (1995) (finding that in determining whether a fee request should be reduced "the result [of the litigation] is what matters").
In this case, the Arbitrator found that although the grievants did not recover the full amount of leave sought in the grievance, the grievants had prevailed within the meaning of section 7701(g)(1). The Arbitrator did not, as asserted by the Union (Exceptions at 2), reduce the fees based on a finding that the grievants did not prevail. Instead, he found that the degree of the grievants' success affected what a "reasonable" fee award would be, and determined that because the grievants received only one-fourth of what they sought in the grievance, an award of the full fees requested would be unreasonable. Award at 2. This is consistent with the Court's holding in Farrar, 506 U.S. 103, decisions of MSPB, such as Stein, 65 MSPR at 690, applying that holding to fees awarded under 5 U.S.C. § 7701(g), and the Authority's decision in Dependents Schools, 54 FLRA at 791-93 following that precedent.(2)
Based on the foregoing, we conclude that the Arbitrator's award of attorney fees is n