U.S. Department of Veterans Affairs, Medical Center, Ann Arbor, Michigan (Agency) and American Federation of Government Employees, Local 2092 (Union)
[ v56 p216 ]
56 FLRA No. 26
U.S. DEPARTMENT OF VETERANS AFFAIRS
MEDICAL CENTER, ANN ARBOR, MICHIGAN
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 2092
March 30, 2000
Before the Authority: Donald S. Wasserman, Chairman; Phyllis N. Segal and Dale Cabaniss, Members.
Decision by Chairman Wasserman for the Authority
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Thomas Roumell 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 exceptions.
The Arbitrator sustained a grievance alleging that certain employees are entitled to receive environmental differential pay (EDP) for exposure to asbestos. For the following reasons, we modify the award insofar as it orders a specific amount of back pay for affected employees. We also modify the portion of the award regarding the payment of attorney fees. We deny the Agency's remaining exceptions.
II. Background and Arbitrator's Award
The Union filed a grievance alleging that all Wage Grade (WG) employees exposed to airborne asbestos were entitled to EDP. When the grievance was not resolved, it was submitted to arbitration on the following issues, as framed by the Arbitrator:
whether and for what periods [b]argaining [u]nit employees have worked or are working in areas where airborne concentrations of asbestos fibers may expose employees to potential illness or injury[;] and [ v56 p 217 ]
whether protective devices or safety measures have practically eliminated the potential for such personal illness or injury.
Award at 40.
As an initial matter, the Arbitrator found that resolution of these issues was predicated on 5 U.S.C. § 5343 and Article 25, section 1 of the parties' bargaining agreement. According to the Arbitrator, 5 U.S.C. § 5343 governs an employee's entitlement to a wage differential for exposure to asbestos. In addition, the Arbitrator noted that Article 25, section 1 provides:
In accordance with the criteria set forth in FPM Supplement 532-1, the appropriate environmental differential will be paid to an employee who is exposed to . . . a working condition meeting the standards described under the categories in Appendix J.
Applying Appendix J to the facts of this case, the Arbitrator determined "the evidence presented establishes conclusively that friable asbestos is present throughout all of the buildings comprising the [VA Medical Center in Ann Arbor]" and that "much of the friable asbestos . . . is in damaged condition[.]" Id. at 41, 42. According to the Arbitrator, such damaged conditions have existed for many years and the Agency's own asbestos assessment surveys show that there is "`significantly damaged' or `damaged' ACM [asbestos containing material] present in every floor of the main building and in numerous locations throughout the [Agency]." Id. at 43. [n2] The Arbitrator further found that these surveys show that historically the Agency has done little, if anything, to eliminate or even address the dangerous asbestos conditions.
The Arbitrator next addressed the issue of what standard should be applied to determine the level of exposure for which EDP can be paid. The Arbitrator noted in this regard that VA Circular 00-88-6 states that "[t]he VA recognizes that asbestos fibers have a deleterious effect on health when inhaled, and that there is no known cure for asbestos diseases." Id. at 48. The Arbitrator stated that OSHA, the EPA and NIOSH have all determined that there is no safe level for asbestos exposure that does not entail potential health risks to persons exposed. The Arbitrator further noted that the Agency's principal asbestos exposure consultant has recognized that even low level asbestos exposure entails significant health risk to those so exposed. Based on this and other similar evidence, the Arbitrator determined that there is no safe level of asbestos exposure.
In determining to apply this standard, the Arbitrator rejected the Agency's contention that low level asbestos exposure entails no potential health risk. The Arbitrator found that the Agency had presented no substantive evidence in support of this position and that the weight of medical authority did not support it. The Arbitrator also found that the Agency's contention ignored the "overwhelming (and undisputed) evidence that there has been and continues to be substantial quantities of damaged friable asbestos throughout [its facilities, as well as] the evidence that the Agency has failed to manage such asbestos in accordance with OSHA and VA asbestos management regulations." Id. at 49.
The Arbitrator also rejected the Agency's contention that employees are not entitled to EDP unless exposure levels exceed the OSHA Permissible Exposure Levels (PELs). The Arbitrator found that this contention is contrary to the EDP standard which specifically requires that EDP be paid where employees are exposed to airborne asbestos fibers that may expose them to potential illness or injury. The Arbitrator also found that the OSHA regulations establishing the PEL do not address its use "as a threshold of determining whether employees are entitled to EDP." Id. at 51. In this connection, the Arbitrator observed that the Authority has [ v56 p 218 ] consistently awarded EDP for exposure to levels far below the PEL standard for workplace exposure to asbestos.
Applying the forgoing standard to the evidence in this case, the Arbitrator concluded that the Agency's bargaining unit employees have worked in areas where the airborne concentrations of asbestos fibers may have exposed them to potential illness or injury. The Arbitrator correspondingly concluded that the evidence fails to establish that protective devices or safety measures have eliminated the potential for such illness or injury.
As his award, the Arbitrator determined that affected employees are entitled to EDP and that it should be calculated from November 28, 1988, which is six years prior to the date on which the grievance was filed. [n3] Based on the documentation provided by the Union, as well as his finding that the Agency employed at least 150 WG employees for each year covered by the award, the Arbitrator calculated that the Agency owed $5,739,728.00. The Arbitrator also awarded the law firms representing the Union 33 1/3 percent of the back pay due, pursuant to a contingency fee agreement, and attorney fees in the amount of $296,133.00. The Arbitrator retained jurisdiction for the purpose of resolving any disputes concerning the affirmative relief granted.
III. Positions of the Parties
A. Agency's Exceptions
The Agency challenges the Arbitrator's award on a variety of grounds. First, the Agency contends that the award is based on nonfact. In support of this contention, the Agency cites numerous findings made by the Arbitrator which, it maintains, are based upon nonfact or an incorrect application of law. For example, the Agency alleges that the Arbitrator erroneously concluded that airborne asbestos is recirculated throughout the Ann Arbor medical facilities via a single, central air circulation unit. See Exceptions at 3. However, the Agency submits that the testimony of its chief engineer refutes the Arbitrator's conclusion. In the Agency's view, this error was significant because the Arbitrator found this matter to be of "great concern." Id. at 4.
An additional "nonfact" error advanced by the Agency was the Arbitrator's reliance on the testimony of the Union's expert witness -- Laurence Molloy -- concerning the health risks associated with exposure to asbestos. According to the Agency, Molloy was not qualified to testify to such matters, "even in a rudimentary fashion." Id. at 5. The Agency also contends that the Arbitrator disregarded Molloy's testimony concerning numerous issues that was elicited on cross-examination.
As a second ground, the Agency submits that the Arbitrator was biased. The Agency states that at the hearing, one of the lawyers seated with the Union had served as the arbitrator in a prior Agency grievance involving EDP. The Agency further states that in that case, Allen Park Veterans Administration Medical Center, Allen Park, Michigan and American Federation of Government Employees, Local 933, 28 FLRA 1166 (1987), the arbitrator sustained the grievance and awarded EDP to affected employees. The Agency contends that at the hearing in this case, the arbitrator in the Allen Park case conversed with the Arbitrator at every break. Although the Agency contacted the Arbitrator after the hearing and expressed its concerns, it nevertheless maintains that the "ex parte communication . . . resulted in a continuation of the Allen Park proceedings and bias against the Agency[.]" Id. at 20. In support of this exception, the Agency submits the affidavits of several individuals who attended the hearing. The Agency also cites various statements in the award to support its allegation.
The third ground the Agency advances is that the award is contrary to law. The Agency argues, citing O'Neall v. United States, 797 F.2d 1576 (Fed. Cir. 1986) (O'Neall), that the Arbitrator erred in assuming that the burden of proof belonged to the Agency. The Agency states that during the hearing it attempted to correct the Arbitrator's mistaken assumption but asserts that he "never accepted" that the Union had the burden of proof or that the Agency could present a defense through the cross-examination of Union witnesses. Exceptions at 25. According to the Agency, the Arbitrator completely ignored its presentation as well as the legal requirement that the Union had the burden to prove entitlement to EDP.
The Agency also argues that the award is contrary to law based on its view that Authority precedent erroneously permits arbitrators to set their own threshold for the payment of EDP to WG employees. The Agency submits that this precedent is inconsistent with the court's ruling in O'Neall that "[a] quantitative level of exposure reasonably related to `potential illness' must be set as a condition precedent to entitlement to EDP[.]" Id. at 26. The Agency also argues that it results in "wild - even inexplicable" variations in EDP awards. Id. at 28. The Agency points out that in order for GS employees to receive HDP, the OSHA PEL standard must have [ v56 p 219 ] been violated. The result, the Agency explains, "is either an inequity based on equal protection principles, for GS employees, or a windfall to WG employees who encounter an arbitrator who adopts the impossible `zero tolerance' standard permitted by the Authority." Id. The Agency maintains that to deny a differential to a GS employee for exposure to asbestos while granting a differential to a WG employees working in the same facility "gives rise to a strong equal protection dilemma." Id. at 29. The Agency adds that by equal protection it means equal protection as defined by the Fourteenth Amendment.
In addition, the Agency submits that the Arbitrator's award of attorney fees is "premature, excessive, contrary to law [and] reflective of the bias shown throughout the underlying proceeding." Id. at 30. The Agency argues, in this regard, that the fee award is premature because exceptions to the Arbitrator's opinion have been filed and it is not yet final and binding. According to the Agency, under Authority precedent, such as Allen Park Veterans Administration, Medical Center and American Federation of Government Employees, Local 933, 34 FLRA 1091 (1990) (VA Medical Center II), the employing agency must have an opportunity to respond to a request for payment of reasonable attorney fees. The Agency claims that it was provided only with redacted copies of billing statements and did not have a reasonable period of time within which to review them. [n4] The Agency further claims that it cannot be assessed more than reasonable fees and that "the grievants cannot be expected to pay [33 1/3 percent] as a contingency with counsel receiving funds over that amount and no credit resulting therefrom." Exceptions at 33. According to the Agency, the Award does not comport with the standards set forth in section 7701(g). The Agency does not, however, specify how the award fails to satisfy these standards.
As a final ground, the Agency argues that the award is contrary to the Back Pay Act. In this connection, the Agency asserts that the Arbitrator simply accepted the Union's computations and, because these computations are only an estimate, they fail to comport with the Back Pay Act's more specific requirements. The Agency also disputes the Arbitrator's assertion that it assented to the estimate and explains that it "merely observed that the methodology used in the estimate was acceptable to that extent." Id. at 35.
B. Union's Opposition
The Union asserts that the Agency's exceptions should be denied because they fail to demonstrate that the award is deficient. In particular, the Union contends that the Agency's nonfact exception should be rejected because the alleged errors or misconceptions made by the Arbitrator and on which the Agency relies are, instead, accurate statements reasonably drawn from the record as a whole. The Union also challenges the Agency's allegation that the Arbitrator's casual conversations with the former arbitrator in the Allen Park proceedings improperly influenced his disposition of this case. According to the Union, there is absolutely no evidence that these conversations had anything to do with this case.
As concerns the Agency's contention that the Arbitrator improperly allocated the burden of proof, the Union asserts that a review of the award demonstrates that there is no basis for this claim. The Union states that the overwhelming evidence presented at the hearing "clearly established the employees' entitlement to EDP irrespective of whether the burden of proof was assigned to the Union or the Agency." Opposition at 67. The Union similarly challenges the Agency's claim that the Arbitrator improperly rejected its equal protection argument, which is based on the hazardous duty pay standard for GS employees. The Union points out that the Agency has cited no precedent to support this contention and asserts that it ignores the substantial differences in the employment standards and protections afforded GS employees as compared with WG employees.
In response to the Agency's exception regarding the Arbitrator's award of attorney fees, the Union notes, citing a portion of the transcript, that the Agency previously acknowledged that the Arbitrator had the authority to include attorney fees in the award. The Union further notes that this argument is not supported by Authority precedent. With regard to the Agency's argument that it was not provided time for substantive review of the Union's fee request, the Union states that the Arbitrator provided the Agency with ten days. The Union also states that "the contingency fee percentage will be paid only by the grievants pursuant to the contractual agreement between the Union's attorneys and the Union" and that the agreement "is not relevant to and has no bearing upon the statutory attorney's fees and expenses awarded by the Arbitrator." Id. at 77. The Union also states that the award sufficiently articulated the Arbitrator's reasoning, findings, and determinations with respect to the attorney fees. [ v56 p 220 ]
Finally, the Union contends that the Arbitrator's award of EDP is not contrary to the Back Pay Act. The Union asserts in this regard that the evidence conclusively establishes that the Agency employed at least 150 bargaining unit employees for each year covered by the award. The Union further asserts that applicable interest rates, wage rates, and annual pay increases were utilized by a computer program to calculate the amount of EDP owed and the interest thereon, as reflected in the award. The Union submits that the Agency did not, and does not now, dispute the accuracy of the wage rates, interest rates, employee numbers or the methodology utilized by the Union in calculating the back pay amount. The Union argues that the fact that the exact amount of EDP to which each employee is entitled has not yet been calculated does not provide a basis upon which to find the award deficient. According to the Union, such calculations can be accomplished during the implementation phase of the award. The Union adds, citing Robins Air Force Base, Warner Robins, Georgia and American Federation of Government Employees, AFL-CIO, Local 987, 18 FLRA 899 (1985), that the Authority has previously upheld an arbitrator's lump sum award of EDP covering a period of years where there had been no showing that employees were actually exposed to toxic chemicals on each workday of the relevant period.
IV. Analysis and Conclusions
A. The Award is Not Based on Nonfact
As an initial ground, the Agency argues that the award is based on nonfact. To establish that an award is deficient on this basis, the appealing party must demonstrate that a central fact underlying the award is clearly erroneous, but for which the arbitrator would have reached a different result. U.S. Department of the Air Force, Lowry Air Force Base, Denver, Colorado and National Federation of Federal Employees, Local 1497, 48 FLRA 589, 593 (1993). The mere fact that an appealing party disputes an arbitral finding does not provide a basis for concluding that an award is based on a nonfact. Federal Employees Metal Trades Council, Local 127 and U.S. Department of the Navy, Mare Island Naval Shipyard, Mare Island, California, 51 FLRA 1259, 1261 (1996). It is well-settled that parties choose arbitrators for the purpose of observing witnesses and evaluating their testimony. United Paperworkers v. Misco, Inc., 484 U.S. 29, 45 (1987).
The Agency asserts that the Arbitrator based his findings on the testimony of witnesses that was elicited on direct examination and ignored all contradictory testimony that was elicited by the Agency on cross-examination. The Agency argues that these findings constitute nonfacts. However, a review of the examples cited by the Agency shows that in each instance, the matter was disputed by the parties before the Arbitrator. Indeed, as the Agency presented no witnesses of its own, its cross-examination served as the primary vehicle for putting matters in dispute. Consequently, the Agency's assertions provide no basis for finding that the award is deficient as based on a nonfact.
B. The Arbitrator Was Not Biased
The Authority will find an arbitration award deficient when the appealing party establishes that there was bias, partiality, or corruption on the part of the arbitrator. To establish that an award is deficient on this ground, the appealing party must demonstrate one of the following: (1) the award was procured by improper means; (2) there was partiality or corruption on the part of the arbitrator; or (3) the arbitrator engaged in misconduct that prejudiced the rights of the appealing party. E.g., Department of the Army, Headquarters, 101st Airborne Division (Air Assault) and Fort Campbell, Fort Campbell, Kentucky and American Federation of Government Employees, Local 2022, 7 FLRA 18, 19 (1981).
In applying this ground, the Authority has examined the approach of Federal courts in reviewing awards in the private sector. In National Gallery of Art and American Federation of Government Employees, Local 1831, 39 FLRA 226, 233-234 (1991), the Authority noted that when a claim of partiality is made, Federal courts require the appealing party to prove specific facts establishing improper motives; the courts ascertain from such record as is available whether the arbitrator's conduct was so biased and prejudiced as to destroy fundamental fairness. Federal courts will find bias or evident partiality when: (1) a reasonable person would conclude that the arbitrator was partial; (2) the circumstances are powerfully suggestive of bias; or (3) the evidence of impropriety is direct, definite, and capable of demonstration. Id. at 233-34.
Here, the Agency submitted the affidavits of several individuals who witnessed the Arbitrator conversing with the former Allen Park arbitrator during breaks in the instant proceedings. Although the affidavits establish that these individuals conversed on two occasions, none of the affidavits provide any insight into the substantive content of the conversations. Nor has the Agency submitted any evidence to establish that the conversations concerned the merits of this case and were, therefore, improper. See, e.g., U.S. Department of the Air Force, Air Force Logistics Command, Hill Air Force Base, Utah and American Federation of Government Employees, Local 1592, 34 FLRA 986, 990 (1990) [ v56 p 221 ] (denying exception alleging bias where ex parte communication between agency and arbitrator had occurred).
As concerns the Agency's allegation that various statements in the Arbitrator's decision illustrate his bias, we note that the record does show that the Arbitrator viewed the Agency's approach to defending this case to be inadequate. For example, as the Agency points out, at the outset of his decision, the Arbitrator observes that "the Agency seems to have been consumed with total indignation that these proceedings have been instituted and begun." Award at 4. The Arbitrator then states that he is "quite puzzl[ed] and amaz[ed] why the Agency has declined and/or avoided . . . the opportunity to present a defense through competent witnesses[.]" Id. At another point in the decision, the Arbitrator states, "[e]xcept for the cross-examination of the Union's two expert witnesses which essentially failed to disturb their highly impressive testimony and observations, the Agency has disregarded the need to have had testimony in support of its overall and general position which would resist and reject the Union's presentations." Id. at 25.
Contrary to the Agency, when viewed in totality, these statements are simply indicative of the Arbitrator's dissatisfaction with the Agency's defense strategy. They do not, however, establish that the Arbitrator was biased or partial under any of the tests applied by the Authority or the Federal courts in private sector labor cases. See, e.g., American Federation of Government Employees, Local 4042 and U.S. Department of Defense, Army Air Force Exchange Service, Waco Distribution Center, Waco, Texas, 51 FLRA 1709, 1714 (1996) (finding that arbitrator's opinion, sharply critical of the union's actions, failed to establish that the arbitrator was biased). In these circumstances, we conclude that the Agency has not demonstrated any impropriety by the Arbitrator that destroyed the fundamental fairness of the arbitration proceedings. As such, we deny this exception.
C. The Award Is Not Contrary to Law as set forth in O'Neall
In circumstances where a party's exceptions involve an award's consistency with law, we review the question of law raised by the arbitrator's award and the party's exceptions de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)).
1. The Arbitrator Properly Allocated The Burden of Proof
The Agency contends, based on O'Neall, that the award is contrary to law because the Arbitrator placed the burden of proof on the Agency, rather than the Union. We disagree with the Agency's contention.
It is well-established under Authority precedent that if a standard of proof is set forth in law, rule, regulation or a collective bargaining agreement, an arbitrator's failure to apply the prescribed standard will constitute a basis for finding the award deficient as contrary to law, rule, regulation, or as failing to draw its essence from the agreement. See U.S. Department of the Navy, Naval Aviation Depot, Norfolk, Virginia and International Association of Machinists and Aerospace Workers, Local 39, 36 FLRA 217, 222 (1990); American Federation of Government Employees, Local 2250 and U.S. Department of Veterans Affairs, Medical Center, Muskogee, Oklahoma, 52 FLRA 320, 323-24 (1996). However, in the absence of a specified standard of proof, arbitrators have the authority to establish whatever standard they consider appropriate and the Authority will not find an award deficient because a party claims that an incorrect standard was used. Id. at 324.
In O'Neall, the Federal Circuit placed the burden of establishing entitlement to EDP on the claimants. 797 F.2d at 1582-83. In this case, the Union was acting on behalf of the employees for whom entitlement to EDP was sought. Therefore, under the standard set forth in O'Neall, the Union was required to prove an entitlement to EDP for exposure to asbestos. The Arbitrator effectively determined, consistent with O'Neall, that the Union had satisfied its burden of proof by demonstrating that the Agency's bargaining unit employees have worked in areas where the airborne concentrations of asbsetos fibers may have exposed them to potential illness or injury. The Arbitrator further determined that the evidence fails to establish that protective devices or safety measure have eliminated the potential for such illness or injury. We, therefore, find that this exception should be rejected. See U.S. Department of Veterans Affairs Medical Center, Huntington, West Virginia and American Federation of Government Employees, Local 2344, 46 FLRA 1160, 1166-67 (1993) (VA Huntington).
2. The Award Does Not Violate the Statute or Constitutional Principles
The Agency also argues that Authority precedent erroneously permits arbitrators to set their own threshold for the payment of EDP to WG employees. According to the Agency, Authority precedent is at variance [ v56 p 222 ] with the standard set forth in O'Neall, that "a quantitative level of exposure reasonably related to `potential illness' must be set as a condition precedent to entitlement to EDP[.]" Exceptions at 26. The Agency further contends that as different standards and criteria are applicable to the payment of EDP for WG employees and the payment of Hazardous Duty Pay for GS employees, "a strong equal protection dilemma" arises. Id. at 29. We find no merit to either of these arguments.
In Allen Park Veterans Administration Medical Center, Allen Park, Michigan and American Federation of Government Employees, Local 933, 28 FLRA 1166 (1987) (VA Medical Center I), the Authority first discussed the court's decision in O'Neall and the ruling that there must be a quantitative level of asbestos exposure set as a condition precedent for entitlement to EDP. The Authority stated that "the proper application of Category 16 of Appendix J requires the consideration of a threshold quantitative level of exposure related to potential illness or injury. What the level should be and how it is derived is, of course, a matter for local determination." Id. at 1170.
In cases decided after VA Medical Center I, the Authority consistently rejected claims alleging that the award was deficient because it failed to specify a particular threshold quantitative level of exposure to asbestos for which EDP is payable. The Authority explained, in this regard, that it had repeatedly stated that the pertinent regulatory requirement, as set forth in Appendix J, category 16 (now Appendix A), conditions the payment of an environmental differential for exposure to asbestos on findings that: (1) employees are working in areas where airborne concentrations of asbestos fibers may expose them to potential illness or injury; and (2) protective devices or safety measures have not practically eliminated the potential for such personal illness or injury. The Authority further explained that Appendix J does not set forth any specified level of exposure required for the payment of EDP. Instead, the specific work situations for which EDP is payable under Appendix J are left to local determination, including arbitration. The Authority also stated that category 16 does not set forth a specified level of exposure to asbestos at which employees are exposed to potential illness or injury. Thus, "when the parties submit a dispute involving exposure to asbestos to arbitration, the arbitrator is free, consistent with the parties' collective bargaining agreement, to determine what quantitative level of asbestos exposes employees to illness or injury and to determine how that level is derived or calculated." VA Huntington, 46 FLRA at 1165.
In VA Huntington the arbitrator found that there is no known safe level of asbestos exposure which would not have the potential for illness or injury. The Authority stated, as relevant here:
[T]he court in O'Neall required the setting of a quantitative level of exposure reasonably related to potential illness as a condition precedent to entitlement to EDP. In our view, an arbitrator's finding that there is no safe level of exposure to asbestos is tantamount to the establishment of a quantitative standard and constitutes an appropriate determination of quantitative levels for purposes of entitlement to EDP.
Id. at 1166. See also VA Medical Center II, 34 FLRA at 1098. The Authority accordingly concluded that the arbitrator's determination that there was no safe level of exposure to asbestos was consistent with applicable legal requirements. [n5]
In this case, the Arbitrator's conclusion that there is no safe level of asbestos exposure is consistent with the arbitral findings set forth in VA Huntington and in VA Medical Center II. Moreover, under Authority precedent as explained in VA Huntington, an arbitrator's finding that any exposure to asbestos puts employees at risk of illness or injury within the meaning of the regulation serves to identify the quantitative threshold as anything greater than zero. As such, we conclude that both Authority precedent and the Arbitrator's award are consistent with O'Neall.
As concerns the Agency's equal protection argument, the Authority has held that neither the Fourteenth Amendment's Equal Protection Clause nor, by extension, the Fifth Amendment, assures uniformity of judicial decisions. See American Federation of Government Employees, Local 1151 and U.S. Department of Veterans Affairs, 54 FLRA 20, 27 (1998) (AFGE, Local 1151) (citing Buckley v. Valeo, 424 U.S. 1, 93 (1976). In AFGE, Local 1151, the Authority noted that although the Fourteenth Amendment does not apply to the Federal Government or its agencies, the Supreme Court has held that Federal actions may be tested under the Fifth Amendment's Due Process Clause by the same rules [ v56 p 223 ] that are employed to test the validity of a state's actions under the Fourteenth Amendment. Id. The Authority determined that an arbitration award need not be consistent with a decision of the Merit Systems Protection Board on similar matters to comply with equal protection requirements. In this case, the Arbitrator simply concluded that the Agency was required to pay EDP to affected employees based on their exposure to airborne asbestos. For the same reasons set forth in AFGE, Local 1151, there is no reason to find that the U.S. Constitution requires consistency between arbitration awards.
In view of the forgoing, we conclude that the Agency's arguments provide no basis for finding the award deficient.
D. The Portion of the Award Ordering a Specific Amount of Back Pay is Deficient
The Arbitrator found, as discussed in section II. above, that the Agency employed approximately 150 WG employees for each of the years covered by the award. The Arbitrator further estimated, in accordance with the Union's calculations, that the Agency owed the affected employees EDP in the amount of $5,739,728.00. The Agency maintains that the Arbitrator's award violates the Back Pay Act because the computations set forth therein only constitute estimates and, accordingly, fail to comport with the Back Pay Act's more specific requirements.
An award of backpay is authorized under the Back Pay Act only when an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action resulted in the withdrawal or the reduction of an employee's pay, allowances, or differentials. See U.S. Department of Health and Human Services and National Treasury Employees Union, 54 FLRA 1210, 1218-19 (1998) (Authority clarified that a requirement that the pay loss would not have occurred but for the unwarranted action is not a separate, independent requirement of the Act but merely amplifies the causal connection requirement of the Act). A violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Act. See U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 785 (1998).
With regard to the first requirement for back pay awards, the Arbitrator specifically found that affected employees "hav[e] been required to work in an area or areas where airborne concentrations of asbestos fibers may expose or may have exposed [them] to potential illness or injury[.]" Award at 62. The Arbitrator additionally found that the use of protective devices or safety measures have not practically eliminated the potential for illness or injury. See id. Based on these findings, the Arbitrator concluded that affected employees are entitled to EDP. Accordingly, the Arbitrator effectively found that the Agency violated Article 25, section 1 of the parties' bargaining agreement. We find these findings sufficient to warrant a conclusion that the Agency committed an unjustified or unwarranted personnel action.
With regard to the second requirement for back pay awards, the Authority has found that the loss of a differential, such as EDP for exposure to asbestos, constitutes a withdrawal or reduction of an employee's pay, allowances or differentials. See U.S. Department of Veterans Affairs and American Federation of Government Employees, 43 FLRA 207, 212 (1991). The Agency contends, however, that the Arbitrator's findings fail to justify his award of back pay because the computations upon which the Arbitrator relied do not comport with the Back Pay Act's more specific requirements.
The Arbitrator found, as relevant here, that affected employees are "entitled to recover EDP wage payments as computed in the Wage Calculation Document for the period of November 28, 1988 to the date of September 30, 1998 and for such additional amount that may accrue until this matter reaches final status for settlement and payment of amounts due." Award at 69 (emphasis added). [n6] In addition, the Arbitrator stated that the calculation for the period between November 28, 1988, and September 30, 1998, "is $5,739,728.00." Id. at 64.
The Authority routinely enforces arbitration awards in which the arbitrator has not specifically calculated the amount of back pay owed. See, e.g., U.S. Department of the Treasury, U.S. Customs Service, El Paso, Texas and National Treasury Employees Union, Chapter 143, 55 FLRA 553, 560 (1999) (NTEU, Chapter 143); U.S. Department of Justice, Federal Bureau of Prisons, Federal Correctional Institution, Sheridan, Oregon and American Federation of Government Employees, Local 3979, 55 FLRA 28, 29 (1998). If, however, an arbitrator does determine to calculate the amount of back pay, such calculations must accurately reflect the individual entitlements of affected employees. The Back Pay Act requires, in this regard, that on correction of an unjustified or unwarranted personnel [ v56 p 224 ] action, the employee is entitled to receive for the period for which the personnel action was in effect "an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred[.]" 5 U.S.C. § 5596(b)(1)(A)(i). Indeed, by its plain wording, the Back Pay Act sets a ceiling on the amount of back pay that an employee can receive and contemplates that any amounts payable pursuant thereto will be based on calculations applicable to individual employees. [n7]
In this case, it is undisputed that the amount of EDP awarded by the Arbitrator was based only on an estimate. We, therefore, find that as it was not based on specific calculations, the portion of the award ordering a specific amount of back pay must be set aside. Nevertheless, the calculation of the amount of back pay owed does not implicate the requirements of the Back Pay Act, but rather implicates a matter of compliance and implementation. See, NTEU, Chapter 143, 55 FLRA at 560. Therefore, as the award of EDP satisfies the requirements of the Back Pay Act in all other respects, we will modify this portion of the award only with regard to the amount of back pay owed.
E. The Portion of the Award Ordering the Payment of Attorney Fees is Consistent with Section 7701(g)
1. Statutory Requirements for Entitlement to 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 Back Pay Act further requires that an award of attorney 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 pertain to attorney fee awards by the Merit Systems Protection Board. Id.
Section 7701(g)(1) applies to all cases except those involving allegations of employment discrimination and therefore applies here. The prerequisites for an award of attorney fees under 5 U.S.C. § 7701(g)(1) 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. An arbitrator's award resolving a request for attorney fees under section 7701(g)(1) must set forth specific findings supporting determinations on each pertinent statutory requirement, including the basis on which the reasonableness of the amount was determined when fees are awarded. See id. If an award fails to contain the findings necessary to enable the Authority to assess the arbitrator's legal conclusions, and those findings cannot be derived from the record, the case will be remanded to the parties for submission to the arbitrator so that the requisite findings can be made. 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).
2. The Fee Award was not Premature
The Authority has long held that an arbitrator is not required to refrain from granting a request for attorney fees until after the Authority resolves any exceptions that may have been filed to the underlying award. See Department of Defense Dependents Schools, Pacific Region and Overseas Education Association, Pacific Region, 30 FLRA 1206, 1216 (1988), reconsideration granted as to other matters, 32 FLRA 757 (1988). Consistent with this precedent, we find no merit in the Agency's contention that the fee award is premature because exceptions to the underlying award have not yet been resolved. As such, we conclude that this contention provides no basis for finding the award deficient.
3. The Agency was Given a Reasonable Time Within Which to Respond
The Agency also contends that the fee award is deficient because the Arbitrator did not give it a reasonable period of time within which to respond to the Union's request for attorney fees. The Agency additionally states that it was only provided with redacted copies of billing statements.
As concerns the first contention, a review of the evidence shows that in a letter to the parties dated August 11, 1998, the Arbitrator gave the Agency ten days from its receipt of the Union's fee request within which to submit a response. The record further shows [ v56 p 225 ] that on August 17, 1998, the parties met with the Arbitrator concerning the case. The transcript of the meeting shows that the subject of the Union's request for attorney fees was discussed at that time. However, the Union did not submit its request until August 21, 1998. In the cover letter accompanying the request, the Union stated that it was the Union's understanding that the Agency would have ten days from receipt of the request within which to present objections.
On September 16, 1998, the Agency responded to the fee request. In the response, the Agency specifically challenged the Union's statement concerning the ten day time period for submitting objections, asserting that the statement did not "comport with the recollections of any Agency personnel who attended the meeting . . . or the transcribed record of that session." Exceptions, Appendix C, tab 13. According to the Agency, the Arbitrator stated, in this regard, that:
Yes. Well, I'm of that opinion too. We should not take anything, receive anything at this time.
The Authority does not appear to have previously considered the amount of time a party should be given to respond to an application for attorney fees. We note, however, that the Authority has held that parties can negotiate into their collective bargaining agreement time limits and other procedures to govern the filing of requests for attorney fees. See U.S. Department of Defense, Defense Logistics Agency, Defense Distribution Region East, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 47 FLRA 791, 794-96 (1993). We see no reason why this precedent would not be equally applicable to the filing of a response.
In this case, there is no evidence to indicate that the parties negotiated an agreement governing the period of time during which a response to a request for attorney fees must be filed. However, as discussed above, the evidence does show that the fee request was submitted on August 21, 1998, and the Agency's response thereto was submitted on September 16, 1998. Notwithstanding the fact that the Agency's response was filed outside of the ten day time period, the Arbitrator did not decline to consider it. We, therefore, reject the Agency's claim that it was not provided a reasonable period of time within which to respond.
Although not specifically raised in the Agency's exceptions, we note the Agency's assertion, set forth in its response, that the ten day time period was inconsistent with a statement made by the Arbitrator at the meeting held on August 17, 1998. Our review of the record, however, shows that this assertion is without merit. Rather, when placed in context, the Arbitrator's statement shows only that he was not prepared to take testimony regarding the Union's request for attorney fees at the August 17 meeting. It does not show that the Arbitrator changed his position regarding the request for attorney fees set forth in his August 11 letter, as the Agency contends.
With regard to the Agency's assertion that it was only given copies of redacted billing statements, we note that in the fee request the Union states that the billing statements and records "have been produced in a redacted format so as to preclude the disclosure of privileged communications and work product." Exceptions, Appendix A, tab 3 at 3. In its exceptions, the Agency does not, however, challenge the Union's assertion of privilege. Moreover, a review of the billing statements shows that the redaction was only done with regard to the subject of certain telephone conversations and other communications. There is no evidence that the redaction was such that it precluded the Agency from conducting a review. Accordingly, we reject the Agency's allegation that it was not provided sufficient time within which to respond to the Union's request for attorney fees.
4. The Award of Fees Meets the Standards set forth in section 7701(g)
The Agency also contends that the fee award fails to comport with the standards set forth in section 7701(g)(1). The Agency argues, in this regard, that it cannot be assessed more than "reasonable fees" and that "the grievants cannot be expected to pay [33 1/3 percent] as a contingency with counsel receiving funds over that amount and no credit resulting therefrom." Exceptions at 33. Although the Agency adds that the fee award violates section 7701(g) "separate and apart" from the reasonableness of the fees, the Agency provides no argument to support this assertion. Id.
In determining the reasonableness of attorney fees, the Authority considers whether the number of hours expended were reasonable and whether those hours, multiplied by the rate, "establish an objective basis on which to make an initial estimate of the value of [the] lawyer's services." U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and National Treasury Employees Union, 48 FLRA 931, 935 (1993) (Internal Revenue Service) (quotations and citations omitted). In doing so, the Authority examines an attorney's customary rates and the terms of any applicable fee agreement. [n8] See 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, 1192 (1993). [ v56 p 226 ]
The Arbitrator reviewed the information and documentation provided in the Union's request for attorney fees. As concerns the request submitted by Gray & Becker, for work performed by Mr. Brian Bishop, the Arbitrator found that half of the 508 hours that had been billed at $250.00 per hour should be reduced to $175.00 per hour. The Arbitrator based this reduction on the fact that much of the time had been spent performing in-office services, such as telephone calls, and for travel time. According to the Arbitrator, this type of work did not merit the $250.00 hourly rate.
As concerns the fee request submitted by Ellman and Ellman, the Arbitrator similarly reduced one third of the 270 hours that had been billed at $180.00 per hour to $140.00 per hour. In making this reduction, the Arbitrator stated that $140.00 was the current rate charged by attorneys in the Washtenaw County, Michigan, area for in-office work. The Arbitrator rejected, however, as "vague and excessive" the Union's request for an additional sum of money to cover fees and expenses incurred in the event of an appeal. Award at 67. Although the Agency disagrees with the Arbitrator's findings, it has failed to provide any information to establish that the fee award was not reasonable under section 7701(g)(1). We, therefore, reject this contention.
In connection with his award of attorney fees, the Arbitrator noted that the two law firms referenced above have an employment contract with the Union that provides for the payment of 33 1/3 percent of whatever Back Pay is ultimately awarded. The Arbitrator found that "the provisions of the contract between the law firms and the Union [are] to be honored" and ordered the Agency to issue three checks: one for attorney fees, one for 33 1/3 percent of the sum total of the back pay due, and one for the remaining balance of the back pay, out of which distributions are to be made to WG employees. Id. at 70. The Agency argues that this aspect of the fee award is incorrect. For the reasons set forth below, we agree.
As discussed above, the award of fees calculated on an hourly basis encompasses all of the legal work performed. Moreover, the Arbitrator expressly adjusted various fees and expenses included in the Union's fee request and ultimately awarded an amount of attorney fees that he determined to be reasonable under the Back Pay Act. As the Arbitrator made an award of fees that he determined to be reasonable, we conclude that ordering the Agency to pay an additional one third contingency amount, taken from the back pay owed, would not constitute a "reasonable" award of attorney fees under the Back Pay Act. [n9]
We also note that the payment of one third of the back pay awarded appears to be prohibited by 5 C.F.R. § 550.311(a). The Federal Circuit has noted, in this regard, that this provision permits pay deductions only for very limited purposes -- union dues, charity, income tax, alimony and child support, and savings. Section 550.311(a) does not, as the court points out, authorize deductions for the benefit of attorneys or for creditors in general. See Knight v. United States, 982 F.2d 1573, 1579 (Fed. Cir. 1993). Authority to permit other pay deductions is vested in the "head of an agency" under section 550.311(c). However, as the Agency does not argue that the fee award is contrary to 5 C.F.R. § 550.311(a), this issue is not before us.
Finally, we note that the Agency also contends that the award does not comport with the standards set forth in section 7701(g). Under section 2425.2 of the Authority's Regulations, a party filing an exception to an arbitration award has the burden of creating a record upon which the Authority can make a decision, including setting forth in full "[a]rguments in support of the stated grounds [for review], together with specific reference to the pertinent documents and citations of authorities[.]" U.S. Department of the Treasury, U.S. Customs Service, El Paso, Texas and National Treasury Employees Union, Chapter 143, 55 FLRA 553, 558 (1999). Other than its contention that the Arbitrator's award of attorney fees is not reasonable, discussed above, the Agency does not explain how the award fails to satisfy these standards. As such, the Agency has not demonstrated that the award is not in accordance with section 7701(g). We, therefore, deny this exception.
The award is modified to strike the specific amount of back pay owed to affected WG employees. The award is further modified to strike the payment of one third of the employees' back pay as a portion of the attorney fees. The Agency's remaining exceptions are denied.
Footnote # 1 for 56 FLRA No. 26
FPM Supplement 532-1, Appendix J was promulgated to implement 5 U.S.C. § 5343. Effective December 31, 1994, the FPM was abolished. The standards and legal requirements identical to those previously contained in the FPM have been codified at 5 C.F.R. 511, Appendix A (Appendix A) and we normally apply Appendix A in EDP cases. See American Federation of Government Employees, Local 1482 and U.S. Department of the Navy, Marine Corps Logistics Base, Barstow, California, 50 FLRA 572, 573 n* (1995). In this case, however, the parties' bargaining agreement was in effect at the time the FPM was abolished and incorporates Appendix J. Therefore, Appendix J governs resolution of the instant grievance. See U.S. Department of Defense, Defense Contract Audit Agency, Central Region and American Federation of Government Employees, Local 3529, 37 FLRA 1218, 1227 (1990) (DCAA).
Nevertheless, as pointed out in DCAA, a government-wide regulation becomes effective upon expiration of the bargaining agreement. Id. at 1227-28. It appears from Jt. Exh. 1, Appendix B, that the bargaining agreement involved here is in a roll-over status and the record does not establish its date of expiration. Because the grievance was filed prior to the abolition of the FPM, it is clear that Appendix J applies to the largest portion of the grievance period. Accordingly, and as there is no practical difference between Appendix A and Appendix J, we apply Appendix J to this proceeding.
Footnote # 2 for 56 FLRA No. 26
The Arbitrator noted that "significantly damaged" ACM is defined as "exposed, friable ACM in airstream or plenum; ACM that has been or is likely to be disturbed and/or damaged resulting in an exposure hazard to maintenance/service workers[.]" Id. at 43.
Footnote # 3 for 56 FLRA No. 26
Footnote # 4 for 56 FLRA No. 26
Footnote # 5 for 56 FLRA No. 26
On the other hand, the Authority has upheld awards in which the Arbitrator applied the permissible exposure level utilized by OSHA. See American Federation of Government Employees, Local 2250 and U.S. Department of Veterans Affairs, Medical Center, Muskogee, Oklahoma, 52 FLRA 320 (1996); American Federation of Government Employees, Local 2635 and U.S. Department of the Navy, Naval Computer Telecommunications Station, Cutler, Maine, 56 FLRA No. 11 (2000).
Footnote # 6 for 56 FLRA No. 26
Footnote # 7 for 56 FLRA No. 26
Footnote # 8 for 56 FLRA No. 26
In determining the market rate, "the Authority has held that `where an applicant for a fee award has a prior billing history, the reasonable hourly rate will be counsel's established billing rate.'" Internal Revenue Service, 48 FLRA at 935 (quoting Department of the Air Force Headquarters, 832D Combat Support Group DPCE, Luke Air Force Base, Arizona, 32 FLRA 1084, 1109 (1988)).
Footnote # 9 for 56 FLRA No. 26
The parties' contingency fee arrangement may, however, be enforceable as a private contract matter. The Supreme Court has stated, as relevant here, that contingency fee agreements can coexist with statutory fee awards, at least under section 1988 civil rights cases. See Venega