Alabama Association of Civilian Technicians (Union) and U.S. Department of Defense, Alabama State Military Department, Alabama National Guard (Agency)
[ v56 p231 ]
56 FLRA No. 29
ALABAMA ASSOCIATION OF
U.S. DEPARTMENT OF DEFENSE
ALABAMA STATE MILITARY DEPARTMENT
ALABAMA NATIONAL GUARD
March 31, 2000
Before the Authority: Donald S. Wasserman, Chairman; Phyllis N. Segal and Dale Cabaniss, Members. [n1]
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator James E. Giblin 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 exceptions.
The Arbitrator denied the request for attorney fees sought pursuant to 5 U.S.C. § 5596(b)(1)(A)(ii). For the following reasons, we remand the case to the parties for submission to a new arbitrator to grant the Union's request for attorney fees and determine what amount of fees would be reasonable.
II. Background and Arbitrator's Award
This is the fourth time that the issue of the Union's entitlement to attorney fees in this case has been before the Authority. [n2] In the initial award, the Arbitrator found that the Agency failed to compensate the grievant at the appropriate rate of pay after he had accepted a temporary promotion to a supervisory position. The Arbitrator ordered that the grievant receive backpay but declined to retain jurisdiction to award attorney fees or to allow the Union to file its request for attorney fees.
The Union excepted to the Arbitrator's failure to award attorney fees or to retain jurisdiction to allow a request for such fees. The Authority denied the Union's exception on the ground that, as the Union had not submitted a request for fees, the Arbitrator did not err in failing to award them. Noting that the award in the case had not become final and binding until the Authority ruled on the Union's exceptions, the Authority stated that "even though the Arbitrator did not retain jurisdiction, the Union may file a request for fees, within a reasonable time from [the date of the Authority's decision], consistent with the Arbitrator's statutory jurisdiction over [the matter of attorney fees under the Back Pay Act]." ACT I, 51 FLRA at 1264.
Approximately 4 weeks after the decision in ACT I, the Union submitted a request for an award of attorney fees. The Arbitrator declined to exercise jurisdiction on the ground that he was functus officio. The Union excepted to the award on the ground that it was inconsistent with the Authority's decision in ACT I. The Authority upheld the exceptions stating that where, as in this case, the Back Pay Act confers authority on an arbitrator to consider an attorney fee request, "the functus officio doctrine does not preclude the arbitrator from considering the request." ACT II, 52 FLRA at 1388. The Authority set aside the award and remanded the attorney fee question to the parties "for joint resubmission to the Arbitrator." Id. at 1389. Upon resubmission by the parties, the Arbitrator issued a third award, stating in its entirety as follows: "This Arbitrator has thoroughly reviewed the Arbitration, Exhibits, Decisions, and Correspondence in this case and finds [that] [t]he Union's request for Attorney's fees in [this case] is herewith denied." Act III, 54 FLRA at 230-231.
The Union again filed exceptions, claiming attorney's fees pursuant to the Back Pay Act and arguing that the decision of the Arbitrator was unsubstantiated as he made no findings of fact or delineated any of his reasoning for the decision. The Authority reviewed the record and concluded that it could not find sufficient arbitral findings in the record to permit it to assess the legal sufficiency of the Arbitrator's award. Id. at 233. Accordingly, the case was remanded to the parties for resubmission to the Arbitrator for "specific findings resolving the Union's request for attorney fees under the pertinent statutory requirements." Id. at 234. [ v56 p 232 ]
The parties again submitted this matter to the Arbitrator, who issued an award that summarized the statutory provisions of 5 U.S.C. § 5596 and 5 U.S.C. § 7701(g) and briefly outlined the tests for awarding attorney fees under both provisions. The Arbitrator then stated that the request for attorney fees was not reasonable and related to the personnel action (under 5 U.S.C. § 5596), and that the award of attorney fees was not warranted in the interest of justice and the amount of fees claimed was not reasonable (under 5 U.S.C. § 7701(g)). The Arbitrator concluded by stating, "If this does not satisfy the Authority, I request that it not be remanded to me again." Award at 2.
III. Positions of the Parties
A. Union's Exception
The Union claims that the Arbitrator's award is contrary to law because it is entitled to attorney fees under the Back Pay Act, "[g]iven the arbitrator's findings and back pay award on the underlying grievance." Exceptions at 3. The Union then cites the underlying arbitration award, where the Arbitrator held:
[A]ll errors are on the part of the Agency. There is not one error in this case that can be attributed to the Union nor the Grievant . . . . [The Agency's position] is an incredible positio[n]. In its brief, the Agency refers to the Grievant being "detailed" to his position. Every piece of paperwork refutes this.
Id. at 3-4. Based upon these various earlier findings by the Arbitrator, the Union asserts that the 5 U.S.C. § 5596 and 5 U.S.C. § 7701(g) standards have been satisfied, and that it is entitled to recover the "market-rate fees" of its counsel, since such work "was `related to the personnel action.'" Id. at 4 (quoting 5 U.S.C. § 5596(b)(1)(A)(ii)).
B. Agency's Opposition
The Agency alleges that the Arbitrator did not find a basis on which to award attorney fees in the "interest of justice." Opposition at 1-2. Moreover, the Agency states that the Arbitrator found that the fees were not reasonable when he stated:
. . . I did not even know that Counsel was involved. There was no reference to Counsel during the Arbitration, Counsel did not attend the Arbitration, it was a very easy case without dispute by the Parties, and I consider the fee of almost $10,000 to be outrageous.
Id. at 2.
The Agency further claims that the Arbitrator found that the necessary attorney-client relationship did not exist. Id. at 3. Finally, the Agency contends that the Union's exception is mere disagreement with the Arbitrator's findings. Id. at 1.
IV. Analysis and Conclusions
A. Statutory Requirements for Attorney Fees
The Union excepts to this award by claiming that the Arbitrator's refusal to award it the requested attorney fees is contrary to the Back Pay Act, 5 U.S.C. § 5596(b)(1)(A)(ii), which also incorporates by reference the standards established in 5 U.S.C. § 7701(g). When a party's exceptions involve an award's consistency with law, we review the questions 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)). 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.
The threshold requirement for entitlement to attorney fees under the Back Pay Act 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 National Association of Government Employees, Local R4-6 and U.S. Department of the Army, Fort Eustis, Virginia, 54 FLRA 1594, 1597-98 (1998) (Fort Eustis); 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 pertain to attorney fee awards by the Merit Systems Protection Board (MSPB). Fort Eustis, 54 FLRA at 1598. 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 [ v56 p 233 ] 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. Id. (citing American Federation of Government Employees, Local 12 and U.S. Department of Labor, Washington, D.C., 38 FLRA 1240, 1248 (1990)).
As already noted, the Arbitrator found that three subparts of the test for awarding attorney fees had not been met: the "related to the personnel action" requirement under 5 U.S.C. § 5596; the "warranted in the interests of justice" standard under 5 U.S.C. § 7701(g); and the "reasonable" standard under 5 U.S.C. § 7701(g) [n3] regarding the amount of the fees. Additionally, the Agency asserts that the Arbitrator also found that there was no attorney-client relationship upon which an attorney fee award could be based. Those four issues are addressed below. Because the parties do not challenge whether the other requirements of the Back Pay Act have been met, we need not consider those criteria. 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. The Arbitrator found the Existence of an Attorney- Client Relationship under the Back Pay Act
As previously mentioned, under 5 U.S.C. § 7701(g) a prerequisite to awarding fees is a finding that fees were incurred by the employee. See also 5 C.F.R. § 550.807(f). Attorney fees are "incurred" when an attorney-client relationship exists and counsel has rendered legal services on behalf of the employee. National Federation of Federal Employees, Local 2030 and U.S. Department of the Interior, Bureau of Land Management, Idaho Falls District, Idaho Falls, Idaho, 54 FLRA 626, 628 (1998); American Federation of Government Employees, AFL-CIO, Local 3882 v. FLRA, et. al., 944 F.2d 922, 933 (D.C. Cir. 1991). An attorney-client relationship exists when an attorney represents the employee on behalf of a union. U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Plant Protection and Quarantine and National Association of Agriculture Employees, 53 FLRA 1688, 1691 (1998) (Animal and Plant). This relationship is not severed even though the Union actually incurs the attorney fees on behalf of the employee. Id. Finally, representation of the grievant at the arbitration hearing is not a precondition to reimbursement under the Back Pay Act for post-hearing representational activities. U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 48 FLRA 1040, 1047 (1993).
Here, the Agency argues that the Arbitrator found that no attorney-client relationship existed. To support this contention, the Agency refers to findings of the Arbitrator that counsel was not at the hearing and was not mentioned until a request for attorney fees was submitted. Opposition at 3. As such, according to the Agency, no attorney-client relationship existed.
The award, however, clearly indicates that "[t]he fees were incurred by the Bargaining Unit Representative on behalf of the employee." Award at 2. This is sufficient to find that the fees were incurred by the employee under section 7701(g). Animal and Plant, 53 FLRA at 1691. Moreover, it is undisputed that a post-hearing brief was filed by an attorney on behalf of the grievant and for his benefit. Given this, the Agency's argument that no attorney-client relationship existed is not supported by the record.
C. Fees are Related to the Personnel Action
Under 5 U.S.C. § 5596, fees must be related to the personnel action in order to be awarded. In this matter, the fees stem from an attorney's legal brief on behalf of the grievant. That brief challenged the Agency's refusal to compensate the grievant at the appropriate rate of pay during his temporary promotion, with the Arbitrator subsequently awarding backpay to remedy that refusal. Accordingly, the brief is related to the underlying resolution of this personnel action, and fees associated with the preparation of this brief are related thereto.
Moreover, we have found that attorney fees are routinely awarded for time spent litigating entitlement to attorney fees under the Back Pay Act. U.S. Department of Defense, Dependents Schools and Federal Education Association, 54 FLRA 514, 520 (1998)(FEA); American Federation of Government Employees, AFL-CIO, Local 3882 v. FLRA, 994 F.2d 20 (D.C. Cir. 1993) (AFGE, Local 3882). In AFGE, Local 3882, the court reasoned that such fees "are clearly `related' to the underlying action, for such fees are often necessary to fulfill the purposes of the statutory scheme on which the action is based." Id. at 22. The court noted that one such purpose of statutory attorney fee provisions is to [ v56 p 234 ] "make a litigant whole when she is wronged under a statute." Id. As such, time spent collecting attorney fees is related to the personnel action and is recoverable. FEA, 54 FLRA at 520.
Accordingly, the fees sought in this matter are related to the personnel action and satisfy that requirement as set forth in 5 U.S.C. § 5596.
D. Fees are Warranted in the Interest of Justice
An award of fees is warranted in the interest of justice in cases: (1) involving prohibited personnel practices; (2) where agency actions are clearly without merit or wholly unfounded, or where the employee is substantially innocent of charges brought by the agency; (3) when agency actions are taken in bad faith to harass or exert improper pressure on an employee; (4) when gross procedural error by an agency prolonged the proceeding or severely prejudiced the employee; (5) where the agency knew or should have known it would not prevail on the merits when it brought the proceeding; or (6) where there is a service rendered to the Federal work force or there is a benefit to the public derived from maintaining the action. See U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 790 (1998) (Dependents Schools).
The Arbitrator stated that "[t]he award of fees is not warranted in the interest of justice." Award at 2. However, he did not identify what facts he relied on in reaching this determination, and did not address or discuss any of the established criteria for determining whether an award is in the interest of justice as set forth above.
Where an arbitration award does not sufficiently explain the determination of a pertinent statutory requirement regarding attorney fees, we will examine the record to see if it permits the Authority to resolve the matter. If so, we will modify the award or deny the exception as appropriate. If not, we will remand the award for further proceedings to assure that the resolution of the request for attorney fees is consistent with law. Animal and Plant, 53 FLRA at 1695.
The record here reflects that the Arbitrator made several findings relevant to whether fees would be warranted in the interest of justice. First, the Arbitrator found that both the Agency and the Union intended for the grievant to be temporarily promoted, even though the Agency had initially claimed that the grievant had been detailed only and not promoted. Initial Award at 13. The Arbitrator also held that the Agency's argument in the case-in-chief was against the weight of "[e]very piece of paperwork". Id. Moreover, the Arbitrator stated in his award:
This matter is covered by the Back-Pay Act . . .. There are many rules and regulations proffered by the Agency to excuse it from paying the Grievant. However all errors are on the part of the Agency. There is not one error in this case that can be attributed to the Union nor the Grievant.
Id. at 12.
As noted, one of the criteria for awarding attorney fees under the warranted in the interest of justice standard is that the Agency's position was clearly without merit. This standard has been defined by the MSPB as follows:
Attorney fees may be warranted in the interest of justice if the agency's action was "clearly without merit," or "wholly unfounded," or if the appellant is "substantially innocent" of the charges brought by the agency. [Allen v. U.S. Postal Service, 2 M.S.P.R. 420, 434 (1980)]. This standard is based upon the result of the case before the Board, not upon the evidence and information available to the agency at the time it took the action. Yorkshire v. Merit Systems Protection Board, 746 F.2d 1454, 1457 (Fed. Cir. 1984). This standard is met if it is plain that the appellant prevailed on the graver charges against him (i.e. the appellant was "substantially innocent") or that the agency's action was based on incredible or unspecific evidence fully countered by the appellant (i.e. the action was "clearly without merit" or "wholly unfounded").
Hutchcraft v. Department of Transportation, 55 M.S.P.R. 138, 148 (1992) (emphasis added).
We conclude, based on the noted findings in the record, that the Agency's failure to properly compensate the grievant was clearly without merit. 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, 1193-94 (1993) (clearly without merit standard is met where an agency presents little or no evidence to support its actions.) Accordingly, fees are warranted under the interest of justice standard as set forth in section 7701(g). [ v56 p 235 ]
E. Remand and Resubmission, Absent Settlement, to a New Arbitrator is Warranted.
The record contains no arbitral analysis and no factual findings regarding the reasonableness of the hours billed or the hourly rate charged. Instead, the Arbitrator made only conclusory comments that the request for $10,000 in fees was "outrageous," and "not reasonable" in light of the case being "very easy . . . without serious dispute." Award at 2.
The Authority has consistently held that an arbitrator, and not the Authority, is the "appropriate authority" under 5 C.F.R. § 550.807(a) for resolving a union request for attorney fees. Act III, 54 FLRA at 233; ACT II, 52 FLRA at 1388-89. As noted in ACT III, it is inappropriate for the Authority to "in effect, be functioning as the arbitrator." Id. Thus, for example, where an award is overturned for failing to find that an award of fees would be in the interest of justice, the Authority has remanded for either settlement or an arbitral assessment of what would be a reasonable amount of fees. National Association of Government Employees, Local R5-188 and U.S. Department of the Air Force, Seymour Johnson Air Force Base, North Carolina, 54 FLRA 1401, 1410 (1998) (Member Wasserman dissenting). An arbitral determination of a reasonable fee amount is in turn subject to Authority review. Dependents Schools, 54 FLRA at 791-93.
In this case, however, the Arbitrator stated that "[i]f this [assessment of the attorney fees request] does not resolve the matter, the Authority will have to go elsewhere for a decision that it considers satisfactory." Award at 1. As we noted in ACT III, "if the Arbitrator in this case is unwilling or unavailable to consider the award on resubmission by the parties, we direct the parties to jointly submit the question of attorney fees to another arbitrator." 54 FLRA at 234. This holding is consistent with American Arbitration Association Rule 18, which notes that a new arbitrator may be appointed to hear a matter where the original arbitrator resigns, dies, or is otherwise unable to act upon the issue. See Elkouri and Elkouri, How Arbitration Works, 188 (5th Ed. 1997). Consistent with the Arbitrator's express declination to consider this matter further, and the history of these proceedings, the Authority concludes that this matter should be submitted to another arbitrator if the parties are unable to settle this matter upon remand.
This case is remanded to the parties for resubmission, absent settlement, to a new arbitrator to grant the Union's request for an award of attorney fees and determine what amount of fees would be reasonable.
Opinion of Chairman Wasserman, dissenting in part:
I agree that fees were incurred by the prevailing party, are related to the personnel action, and are warranted in the interest of justice. I believe, however, that we should not at this juncture remand the case to the parties to submit the matter to another arbitrator. It is clear that it is within an arbitrator's authority to award fees, because he or she is the appropriate authority who corrected the unjustified personnel action. In its previous decisions in this case, the Authority attempted to obtain an arbitral decision on the questions associated with the fee request. The Arbitrator in the instant case did not properly apply the standards of the Back Pay Act, and we now find it necessary to apply those standards to his findings of fact. I find the record adequate to apply the legal standard of reasonableness to the factual findings of the Arbitrator, and therefore, see no reason to remand for further proceedings.
The Authority has stated, "Where it is apparent from the record what the amount of attorney fees would have been if the arbitrator had made a proper determination, we will modify the award accordingly." National Association of Government Employees, Local R5-188 and U.S. Department of the Air Force, Seymour Johnson Air Force Base, North Carolina, 46 FLRA 458, 464 (1992). In this case, the Arbitrator's findings and the record as a whole reveal that the number of hours requested is excessive. I base this upon the Arbitrator's findings that the case was easy and without serious dispute, and that the fee request was "outrageous." Award at 2. In addition, counsel for the union stated that he was familiar with the principal legal issue regarding appointments without the proper documentation. Exceptions at 5. Finally, I note that the brief was six pages in length, and that the content is straight forward. Post-hearing brief, attached to Exceptions. The entries for September 25, 1995 and October 4, 1995 for brief preparation are unreasonable in light of these factors, and I would reduce the requested compensable time by 15.1 hours to award fees for 16.2 hours.
I find the requested hourly rate to be reasonable. The Agency did not dispute the rate, either before the Arbitrator or in its exceptions. Moreover, the Authority has previously approved the use of the Laffey matrix in arbitration cases. See U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and National Treasury Employees Union, 48 FLRA 931, 936 (1993). The matrix represents the market rate in the Washington, D.C. area.
Accordingly, I would find a reasonable attorney fee to be 16.2 hours compensated at the requested hourly rate.
Footnote # 1 for 56 FLRA No. 29
Footnote # 2 for 56 FLRA No. 29
See Alabama Association of Civilian Technicians and U.S. Department of Defense, Alabama State Military Department, Alabama National Guard, 54 FLRA 229 (1998) (ACT III); Alabama National Guard Alabama Association of Civilian Technicians and U.S. Department of Defense, Alabama State Military Department, Alabama National Guard, 52 FLRA 1386 (1997) (ACT II); Alabama Association of Civilian Technicians and U.S. Department of Defense, Alabama State Military Department, Alabama National Guard, 51 FLRA 1262 (1996) (