United States Department of the Navy, United States Naval Academy, Nonappropriated Fund Program Division (Agency) and American Federation of Government Employees, Local 896 (Union)
[ v63 p100 ]
63 FLRA No. 40
DEPARTMENT OF THE NAVY
NAVAL ACADEMY, NONAPPROPRIATED
FUND PROGRAM DIVISION
OF GOVERNMENT EMPLOYEES
February 11, 2009
Before the Authority: Thomas M. Beck, Chairman and
Carol Waller Pope, Member
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Barbara B. Franklin filed by the Agency under § 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 awarded attorney fees and expenses to the Union under the Fair Labor Standards Act (FLSA). For the reasons that follow, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
In her original award, the Arbitrator found that the Agency violated the parties' agreement and the FLSA by failing to pay certain employees for lunch breaks during which they were required to work, and ordered the Agency to pay backpay and liquidated damages under the FLSA. The Arbitrator retained jurisdiction over the remedial issues, and at the request of the parties, issued an award clarifying the calculation of backpay. As no exceptions were filed to these awards, they became final and the Union filed a petition for attorney fees and costs.
In the award at issue here, the Arbitrator reviewed the Union's request for attorney fees ($42,798.76) and other expenses ($422.08) applying the standards under the FLSA. The Arbitrator rejected the Agency's argument that Article 25, § 11 of the parties' agreement required an award under the Back Pay Act. [n1] In doing so, the Arbitrator held that, although Article 25 § 11 grants arbitrators the authority to award attorney fees under the Back Pay Act, it does not preclude an award of attorney fees pursuant to another fee shifting statute, such as the FLSA. Award at 5-6. As the underlying award was grounded in the FLSA, the Arbitrator found that the FLSA provided the basis for the award of attorney fees in this case. In this regard, she stated that "[c]onsistency and logic mandate that [§] 216(b) also controls the award of attorney fees[,]" and held that 29 U.S.C. § 216(b) provides an independent statutory right to "reasonable" attorney fees for a prevailing party. Id. at 6.
According to the Arbitrator, "[t]he primary analytical difference between a determination of appropriate fees under the FLSA and the Back Pay Act is the requirement of a finding as to whether the fees are warranted in the interest of justice." Id. at 8 n.3. The Arbitrator found that the FLSA provides an independent right to reasonable attorney fees for the prevailing party in a claim under the FLSA, whether or not the award satisfies that Back Pay Act's interest of justice standard. Id. at 6 (citing IFPTE, Local 529, 57 FLRA 784 (2002)). Further, the Arbitrator stated that an award of attorney fees under the FLSA must be reasonable. Id. at 8.
Having found that the Union was the prevailing party, the Arbitrator considered whether the attorney fees were reasonable. Applying the "Lodestar" method, the Arbitrator determined that the fees requested by the Union were excessive in relation to the underlying award and adjusted the Union's fee award accordingly. [n2] Id. at 10-17. The Arbitrator multiplied the number of hours awarded by the appropriate hourly rate [ v63 p101 ] under the Laffey matrix. [n3] She then considered the magnitude of the fees requested in comparison with the value of the underlying award and adjusted the award accordingly by lowering the hours awarded by 25%. Id. at 17.
Based on the foregoing, the Arbitrator found that some of the requested fees and costs, including those for travel to and from the hearing, were reasonable, and granted the Union attorney fees in the amount of $25,172.85 and additional expenses in the amount of $182.08. Id. at 18.
III. Positions of the Parties
A. Agency's Exceptions
The Agency asserts that the Arbitrator exceeded her authority in awarding attorney fees under the FLSA -- and not the Back Pay Act -- because Article 25, § 11 of the parties' agreement provides an exclusive remedy for attorney fees under the Back Pay Act. The Agency contends that it should not be required to pay for the Union's attorney fees because the parties' agreement provides that the Civil Service Reform Act (CSRA) is the applicable statute and the CSRA incorporates the Back Pay Act by reference. Exceptions at 2 n.1 (citing Civil Service Reform Act of 1978, Pub. L. No. 95-454, 92 Stat. 1111). The Agency alleges that, under the parties' agreement, the Back Pay Act is the only appropriate standard under which the Arbitrator may award attorney fees. According to the Agency, if Article 25, §11 had been applied, then it would have barred the Union from succeeding in its claim for attorney fees.
The Agency also asserts that the Arbitrator's award is contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1). [n4] Specifically the Agency argues that the Arbitrator erred in awarding attorney fees under the FLSA, and, instead, should have applied the Back Pay Act and 5 U.S.C. §7701(g)(1). The Agency argues that, under the Back Pay Act, the Arbitrator may only award attorney fees when they are "warranted in the interest of justice." Exceptions at 8. As the Arbitrator did not consider whether the attorney fees here were "warranted in the interest of justice," the Agency contends that the Arbitrator failed to consider a crucial element required for the award of attorney fees. Id.
Finally, the Agency asserts that the Arbitrator failed to "announce which Laffey [m]atrix was used in the ["Lodestar"] calculation." Id. at 2. According to the Agency, recent decisions in the United States District Court for the District of Columbia have cited to two Laffey matrices and the Arbitrator failed to identify which one she used and why. Id. at 5. The Agency contends that this resulted in an award of enhanced attorney fees because the Arbitrator utilized a higher hourly rate for the award of attorney fees than the rate that the Union requested. Furthermore, the Agency asserts that the correct prevailing market rate for the Union's attorney fees should be Anne Arundel, Maryland (MD), where the hearings occurred and the Agency is located, rather than Washington, D.C., as applied by the Arbitrator.
B. Union's Opposition
The Union claims that the award does not fail to draw its essence from the parties' agreement and that the Arbitrator correctly interpreted the agreement as permitting an award of attorney fees under the FLSA. The Union contends that the parties' agreement does not limit the Arbitrator's authority to grant fees under the FLSA and should not be read in a restrictive manner. Opposition at 5. The Union further claims that the parties' agreement does not supersede federal law. In this regard, the Union states that Article 2, § 1 provides that "[i]n administration of all matters covered by the Agreement[,] officials and employees are governed by . . . laws and government-wide regulations." Id. at 8. The Union also asserts that it may waive its statutory right to attorney fees, but that such a waiver must be clear and unmistakable. Id. at 9.
The Union also claims that it is entitled to travel fees and costs under the FLSA because the FLSA is the basis for the Arbitrator's original award and clarification. The Union states that the Agency does not dispute [ v63 p102 ] that the Union was the prevailing party in the underlying award, thereby meeting the initial requirement under the FLSA for an award of attorney fees. Id. at 7. The Union argues that 29 U.S.C. § 216(b) provides that "a court in an action under the FLSA allows a reasonable attorney fee in addition to any judgment." Id. at 8. The Union asserts that, where an FLSA claim is properly before an arbitrator, arbitrators have the authority to award attorney fees under the FLSA. Id. at 8-9 (citing AFGE, Local 446, 58 FLRA 361 (2003)). Furthermore, the Union alleges that the Arbitrator correctly applied the FLSA to award attorney fees whether or not the award would have satisfied the interest of justice standard under the Back Pay Act.
Finally, the Union asserts that the Arbitrator correctly awarded attorney fees using the updated Laffey matrix. The Union further states that the Arbitrator appropriately applied the "Lodestar" method in calculating the attorney fees by multiplying the number of hours awarded by the rate provided in the updated Laffey matrix and then adjusting the fees in light of the "degree of success obtained." Id. at 5-6. The Union alleges that the Authority has followed Merit Systems Protection Board (MSPB) regulations to calculate the prevailing market rate for attorney fees. Id. at 17. Here, the Union asserts that the Arbitrator correctly applied the updated Laffey matrix to calculate the attorney fees, using the community in which the attorney practices (Washington, D.C.) as the prevailing market rate, instead of Anne Arundel, MD where the Agency is located.
IV. Analysis and Conclusions
A. The award does not fail to draw its essence from the parties' agreement.
We construe the Agency's argument that the Arbitrator exceeded her authority by awarding attorney fees under the FLSA -- and not the Back Pay Act -- as a claim that the award fails to draw its essence from Article 25, § 11 of the parties' agreement. To demonstrate that an award fails to draw its essence from the parties' agreement, a party must show that the award: (1) is so unfounded in reason and fact and so unconnected with the wording and purposes of the parties' agreement as to manifest an infidelity to the obligation of the arbitrator; (2) does not represent a plausible interpretation of the agreement; (3) cannot in any rational way be derived from the agreement; or (4) evidences a manifest disregard of the agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990). The Authority and the courts defer to arbitrators in this context "because it is the arbitrator's construction of the agreement for which the parties have bargained." Id. at 576.
The Agency argues that Article 25, § 11 requires an attorney fees award to be considered under the Back Pay Act and not any other statute. The Arbitrator rejected this argument and found that Article 25 did not provide an exclusive right to attorney fees under the Back Pay Act. In this regard, she stated that it was unreasonable to interpret the provision to prohibit the application of the FLSA in the underlying dispute giving rise to the attorney fees request. Award at 5-6.
Article 25, § 11 of the parties' agreement states that "[t]he arbitrator has authority to award reasonable attorney fees in accordance with Section 702 of P.L. 95-454." Exceptions, Attach 2 at 50. Although this provision specifically grants arbitrators the authority to award attorney fees under the CSRA, there is no indication that the CSRA is the sole authority allowable under the parties' agreement, or that awarding attorney fees under some other statutory authority is specifically prohibited. Thus, the Arbitrator's interpretation of this provision as allowing for the application of other legally binding statutes, such as the FLSA, represents a plausible interpretation of the agreement. Accordingly, we deny the Agency's exception.
B. The award is not contrary to law.
The Agency claims that the Arbitrator's award is contrary to the Back Pay Act and 5 U.S.C. § 7701(g) because she awarded attorney fees to the Union under the FLSA and failed to elaborate how she arrived at the calculation of those fees.
When an exception involves an award's consistency with law, the Authority reviews any question of law raised by the exception and the award de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying the standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. See United States Dep't of Def., Dep'ts of the Army and the Air Force, Ala. Nat'l Guard, Northport, Ala., 55 FLRA 37, 40 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
1. The Arbitrator did not err in awarding attorney fees under the FLSA.
Here, the Arbitrator awarded attorney fees in a case where the underlying dispute was resolved under the FLSA. 29 U.S.C. § 216(b) provides that courts "shall, in addition to any judgment awarded to the plaintiff [under the FLSA] allow  reasonable attorney fee[s] to be paid by the defendant, and costs of the [ v63 p103 ] action." Accordingly, a plaintiff who prevails on a claim under the FLSA is entitled to attorney fees under that act. IFPTE, Local 529, 57 FLRA at 786. The Authority has previously held that language permitting a court to award monetary damages against the federal government does not deprive arbitrators of the authority to award such damages. AFGE, Local 446, 58 FLRA 361.
The Authority has found that the FLSA "provides an independent statutory right to attorney fees, whether or not the award satisfies that Back Pay Act's interest of justice standard." IFPTE, Local 529, 57 FLRA at 786 (quoting 29 U.S.C. § 216(b)). Further, awards of backpay should not be granted under the Back Pay Act where there is an independent statutory basis for such an award. See NTEU, 53 FLRA 1469, 1487 (1998) (citing United States Dep't of Def., Army and Air Force Exch. Serv., 45 FLRA 674, 685-90 (1992)). As the FLSA is in itself a waiver of sovereign immunity and independently provides a statutory right to money damages, the Authority has found that application of the Back Pay Act is not necessary to award backpay for violations of the FLSA. NTEU, 53 FLRA at 1488. Thus, the requirement under 5 U.S.C. § 7701(g) that attorney fees are "warranted in the interest of justice" is inapplicable here. Accordingly, we deny the Agency's exception.
2. The Arbitrator properly applied the Laffey matrix in determining the appropriate award of attorney fees.
The Authority applies MSPB precedent in determining the relevant community for calculating attorney fees. United States Dep't of the Army, Corpus Christi Army Depot, Corpus Christi, Tex., 58 FLRA 87, 90 (2002) (Corpus Christi). The MSPB has concluded that the relevant community for purposes of determining the appropriate market rate for an attorney is the community in which the attorney ordinarily practices. See Martinez v. U. S. Postal Serv., 89 MSPR 152, 161 (2001). The Authority has adopted this approach, holding that the relevant market rate is that for the community in which the attorney ordinarily practices. Corpus Christi, 58 FLRA at 91. Of particular relevance here, the Authority has held that a union was entitled to recover attorney fees at the Washington, D.C. market rate where the union provided sufficient evidence to establish that its counsel's ordinary community of practice was Washington, D.C. See AFGE, Local 1938, 61 FLRA 645, 646 (2006). In so holding, the Authority stated that a union is not required to establish that local counsel was unavailable. See id.
Here, the Union submitted its attorney's affidavit asserting that she has litigation experience, graduated from law school in 2002, and works full time in Washington, D.C. except when in travel status. Opposition, Attach. 3. Thus, the record evidence supports the Arbitrator's finding that the Union attorney's relevant community is Washington, D.C., as that is "where the attorney for the Union ordinarily practices, and not Anne Arundel County, where the Agency is located and the hearing was held." Award at 9.
The Union also submitted a copy of the Laffey matrix demonstrating the applicable rates for an attorney with the Union attorney's amount of experience. Opposition, Attach. 2. The use of the Laffey matrix is appropriate in determining the reasonableness of attorney fees under the FLSA. See Falica v. Advance Tenant Servs., 384 F.Supp.2d 75, 77 (D.D.C. 2005). With respect to the Agency's claim that the Arbitrator did not specify which Laffey matrix applied, the Arbitrator here applied the rate under the updated Laffey matrix that directly corresponded to the number of years the attorney had been practicing and in the area where the attorney practiced (Washington, D.C.). Award at 10-17. In calculating the appropriate rate of attorney fees, the Arbitrator applied the community rate under Laffey to the number of hours reasonably expended on the litigation using "Lodestar", reducing the overall award to account for the disparity in the award of attorney fees versus the amount involved in the underlying award. Award at 17. In these circumstances, we deny the Agency's exception.
The Agency's exceptions are denied.
Footnote # 1 for 63 FLRA No. 40 - Authority's Decision
Footnote # 2 for 63 FLRA No. 40 - Authority's Decision
The "Lodestar" method is set forth in Department of the Air Force Headquarters, 832d Combat Support Group, DPCE, Luke Air Force Base, Arizona, 32 FLRA 1084, 1100 (1988). It provides that attorney fees are determined by calculating the number of hours reasonably expended on the litigation multiplied by the reasonable hourly rate (here, the Laffey rate).
Footnote # 3 for 63 FLRA No. 40 - Authority's Decision
The Laffey matrix sets forth the method for determining the appropriate rate for attorneys in the Washington, D.C. area based on their qualifications and years of experience. See Laffey v. Northwest Airlines, 572 F. Supp. 354 (D.D.C. 1983). Use of an updated Laffey matrix was implicitly endorsed by the Court of Appeals in Save Our Cumberland Mountains v. Hodel, 857 F.2d 1516, 1525 (D.C. Cir. 1988) (en banc). The Court of Appeals subsequently stated that parties may rely on the updated Laffey matrix prepared by the United States Attorney's Office as evidence of prevailing market rates for litigation counsel in the Washington, D.C. area. See Covington v. District of Columbia, 57 F.3d 1101, 1105 & n.14, 1109 (D.C. Cir. 1995), cert. denied, 516 U.S. 1115 (1996). The matrix is regularly updated by the United States Attorney's Office of the District of Columbia. See http:// www.usdoj.gov/usao/dc/Divisions/Civil_Division/Laffey_Matrix_7.html.
Footnote # 4 for 63 FLRA No. 40 - Authority's Decision
Under 5 U.S.C. § 7701(g)(1), the prerequisites for an award of attorney fees are: (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 United States Dep't of Def., Def. Distrib. Region E., New Cumberland, Pa., 51 FLRA 155, 158 (1995).