[ v17 p446 ]
The decision of the Authority follows:
17 FLRA No. 72 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO Respondent and SOCIAL SECURITY ADMINISTRATION Charging Party Case No. 3-CO-20003 DECISION AND ORDER The Administrative Law Judge issued the attached Decision in the above-entitled proceeding finding that the Respondent had not engaged in the unfair labor practices alleged in the complaint, and recommending that the complaint be dismissed in its entirety. Thereafter, the Charging Party and the General Counsel filed exceptions to the Judge's Decision, and the Respondent filed an opposition to the exceptions. Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Federal Service Labor-Management Relations Statute (the Statute), the Authority has reviewed the rulings of the Judge made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. Upon consideration of the Judge's Decision and the entire record, the Authority hereby adopts the Judge's findings, conclusions and recommendation, only to the extent consistent herewith. The Judge concluded that the Respondent, American Federation of Government Employees, AFL-CIO (AFGE), did not violate section 7116(b)(1) and (8) of the Statute /1/ by charging non-member employees disparate fees to participate in a class action law suit under the Back Pay Act. In reaching this conclusion, the Judge found that section 7114(a)(1) of the Statute /2/ obliges an exclusive representative to adhere to a standard of fair representation only in those proceedings which are in the sole control of the exclusive representative by virtue of its certification, but does not impose such obligations in those proceedings which are available to employees in general, and are supplementary to, but not a substitute for, proceedings which are the sole prerogative of the exclusive representative. The Authority does not agree. The duty of fair representation is not restricted to those proceedings under the sole control of the exclusive representative as a consequence of its certification. Rather, when an exclusive representative decides to represent unit employees in any matter which affects their conditions of employment, it has the duty under section 7114 of the Statute to represent unit employees fairly, and may not discriminate with regard to that representation on the basis of union membership. National Treasury Employees Union and National Treasury Employees Union Chapter, 121, 16 FLRA No. 102 (1984), petition for review filed sub nom. National Treasury Employees Union v. FLRA, No. 85-1053 (D.C. Cir., Jan. 25, 1985); National Treasury Employees Union, 10 FLRA 519 (1982), aff'd, 721 F.2d 1402 (D.C. Cir. 1983) (encompassed within the union's duty under section 7114(a)(1) is the furnishing of the services of an attorney on a non-discriminatory basis in removal actions, both within the Agency procedures as well as before the Merit Systems Protection Board). Within that duty is the obligation not to discriminate on the basis of union membership concerning the fees to be charged for the attorney's services in representing unit employees on matters affecting their conditions of employment. /3/ Accordingly, in the instant case, the Authority finds that Respondent AFGE, by discriminating between members and nonmembers in assessing attorneys' fees for unit employees participating in a class action law suit seeking to recover overtime pay, failed to meet its obligations under section 7114(a)(1) of the Statute and thereby violated section 7116(b)(1) and (8) of the Statute. ORDER Pursuant to section 2423.29 of the Rules and Regulations of the Federal Labor Relations Authority and section 7118 of the Federal Service Labor-Management Relations Statute, the Authority hereby orders that the American Federation of Government Employees, AFL-CIO shall: 1. Cease and desist from: (a) Assessing disparate contingency fees for attorney representation in a class action law suit involving entitlement to overtime pay based upon membership or nonmembership in the American Federation of Government Employees, AFL-CIO. (b) Interfering with, restraining, or coercing unit employees in the exercise of their right to refrain from joining, freely and without fear of penalty or reprisal, the American Federation of Government Employees, AFL-CIO, or any other labor organization. (c) In any like or related manner interfering with, restraining, or coercing unit employees in the exercise of their rights assured by the Statute. 2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute: (a) Represent all employees in units of exclusive recognition without discrimination and without regard to membership in the American Federation of Government Employees, AFL-CIO. (b) Rescind the conditional contingency fee arrangement imposed upon employees seeking to join the class action law suit prosecuted by Attorney Banov concerning the appropriate calculation of overtime pay for employees in the unit exclusively represented by the American Federation of Government Employees, AFL-CIO, and make whole any employee in the bargaining unit for any loss of money suffered as a consequence of the conditional contingency fee arrangement. (c) Post at its business offices and its normal meeting places, including all places where notices to members and employees of the Social Security Administration are customarily posted, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms they shall be signed by the President of the American Federation of Government Employees, AFL-CIO, or his designee, and they shall be posted and maintained for 60 consecutive days thereafter in conspicuous places, including all places where notices to members and to other employees are customarily posted. Reasonable steps shall be taken to insure that such Notices are not altered, defaced, or covered by any other material. (d) Submit appropriate signed copies of such Notices to the Administrator of the Social Security Administration, Baltimore, Maryland, for posting in conspicuous places where the unit employees are located, where they shall be maintained for a period of 60 consecutive days from the date of posting. (e) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director of Region III, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply herewith. Issued, Washington, D.C., April 15, 1985 Henry B. Frazier III, Acting Chairman William J. McGinnis, Jr., Member FEDERAL LABOR RELATIONS AUTHORITY NOTICE TO ALL MEMBERS AND EMPLOYEES PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR RELATIONS AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 17 OF TITLE 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS WE HEREBY NOTIFY OUR MEMBERS AND OTHER EMPLOYEES THAT: WE WILL NOT assess disparate contingency fees for attorney representation in a class action law suit involving entitlement to overtime pay based upon membership or nonmembership in the American Federation of Government Employees, AFL-CIO. WE WILL NOT interfere with, restrain, or coerce unit employees in the exercise of their right to refrain from joining, freely and without fear of penalty or reprisal, the American Federation of Government Employees, AFL-CIO. WE WILL NOT in any like or related manner interfere with, restrain, or coerce unit employees in the exercise of their rights assured by the Statute. WE WILL represent all employees in units of exclusive recognition without discrimination and without regard to membership in the American Federation of Government Employees, AFL-CIO. WE WILL rescind the conditional contingency fee arrangement imposed upon employees seeking to join the class action law suit prosecuted by Attorney Banov concerning the appropriate calculation of overtime pay for employees in the unit we exclusively represent, and make whole any employee in the bargaining unit for any loss of money suffered as a consequence of the conditional contingency fee arrangement. (Union) Dated: By: (Signature) (Title) This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Region III, Federal Labor Relations Authority, whose address is: 1118 18th Street, NW., Suite 700, Washington, D.C. 20033-0758, and whose telephone number is (202) 653-8456. -------------------- ALJ$ DECISION FOLLOWS -------------------- Case No. 3-CO-20003 Mark D. Roth, Esquire For the Respondent Sharon Prost, Esquire For the General Counsel Irving L. Becker, Esquire For the Charging Party Before: BURTON S. STERNBURG, Administrative Law Judge Administrative Law Judge DECISION Statement of the Case This is a proceeding under the Federal Service Labor-Management Relations Statute, Chapter 71 of Title 5 of the U.S. Code, 5 U.S.C.Section 7101 et seq., and the Rules and Regulations issued thereunder, Fed. Reg. Vol. 45, No. 12, January 17, 1980 and Vol. 46, No. 154, August 11, 1981, 5 C.F.R.Chapter XIV, Part 2411, et seq. Pursuant to a charge filed on December 1, 1981, by the Social Security Administration (hereinafter called the SSA or Charging Party), a Complaint and Notice of Hearing was issued on March 22, 1982, by the Regional Director for Region III, Federal Labor Relations Authority, Washington, D.C. The Complaint alleges that the American Federation of Government Employees, AFL-CIO (hereinafter called the AFGE, or Union or Respondent), violated Sections 7116(b)(1) and (8) of the Federal Service Labor-Management Relations Statute (hereinafter called the Statute or Act), by virtue of its actions in failing to accord equal representation in a class action law suit to unit employees who are not members of the Union. /4/ A hearing was held in the captioned matter on May 12, 1982, in Washington, D.C. All parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues involved herein. The Respondent and the Charging Party submitted post-hearing briefs on June 25 and June 23, 1982, respectively, which have been duly considered along with the General Counsel's closing argument made on the record. /5/ Upon the basis of the entire record, including my observation of the witnesses and their demeanor, I make the following findings of fact, conclusions and recommendations. Findings of Fact Since 1979, the Union has been the exclusive bargaining representative in a consolidated unit of SSA employees. Prior to that time the Union had been the exclusive bargaining agent of various separate groups of SSA employees located throughout the United States. Local 1923 of the Union services the unit employees working at the SSA Baltimore, Maryland headquarters. In 1978, a question arose with respect to whether or not the SSA was paying the proper night differential to Baltimore, Maryland, unit employees working overtime in the electronic data processing area. /6/ Upon discovering the alleged underpayment, many of the unit employees filed grievances, both individually and through the Union, under the grievance procedure of the collective bargaining contract then in effect. At the time of the hearing the grievances had not as yet been finally resolved or processed to arbitration. /7/ Beginning in the spring of 1978, Union and Management representatives held numerous meetings wherein the mechanics for processing the grievances and/or back pay claims of the affected employees were discussed. Additionally, as a result of the meetings and discussions a ruling on the matter was sought from the Comptroller General and subsequently a task force was established for purposes of processing both the background records and back pay claims of the numerous employees involved. Not being satisfied with the progress of the SSA task force in settling the employees' night pay differential grievances and/or claims, Mr. Harold Roof, President of Local 1923, who had been representing the employees in the discussions of their pending night pay differential grievances, contacted Mr. Alan Banov, a private attorney in the latter part of 1980, concerning the possibility of filing a civil action in U.S. District Court for purposes of obtaining the back pay underlying the pending grievances. /8/ Although not entirely clear from the record, it appears that Mr. Banov and Mr. Roof subsequently reached an agreement whereby Mr. Banov would represent the SSA unit employees in a class action suit against SSA for the night pay differential allegedly due them. According to the testimony of Mr. Banov, it was his original intention to recoup his expenses and fee for the law suit solely from the Government. Furthermore, according to the testimony of Mr. Banov, prior to November 1981, when a "consent form" was published in the "Government Standard" an official AFGE publication, /9/ he had been circulating a variety of consent forms which made no mention whatsoever, or provided for, contingency fees if he was successful in the law suit. /10/ Thereafter, at a date not set forth in the record, Mr. Roof contacted Mr. James Rosa, AFGE General Counsel, concerning whether or not the Union would be amenable to making a contribution from the Union's Legal Rights Fund to the class action suit being handled by Mr. Banov. The Union concluded that the suit was a worthwhile endeavor and voted to give Mr. Banov a $5,000 retainer from monies in the Legal Rights Fund. The November 1981, issue of The Government Standard, an official publication of the AFGE carried the following article on page 4: NIGHT DIFFERENTIAL SUIT MAY AFFECT 10,000 WORKERS Over 10,000 government employees may be due to recover money owed them for night work which they regularly performed during scheduled overtime in the last six years. AFGE is attempting to recover the money for its members through a class action suit filed in U.S. District Court for the District of Columbia. The night pay differential suit was originally filed for SSA, DHS and Education employees, however, it is now open for all AFGE members who believe they qualify for the money under class action status. Washington attorney Alan Banov has been retained by AFGE to handle the case called Greenfield v. U.S.A. Any AFGE member who believes he or she is owed money because the government did not pay a 10 percent differential for work performed between 6 p.m. and 6 a.m. should complete the form at the right. The form appearing at the right of the article entitled Consent To Representation By Law Offices Of Alan Banov In Claiming Backpay From The U.S. For Its Failure To Pay Night Pay Differential For Night Work Performed On Overtime states in paragraph 4 as follows: I agree to pay Mr. Banov 5% of any recovery if I am an AFGE member now, or 10% if I am a non-member. With respect to the five and ten percent contingency fee differential assessed to members and non-members of the AFGE, respectively, on the consent form, both Mr. Banov and Mr. Rosa, in their respective testimony, made it clear that the reason for charging different contingency fees was the fact that the Union Legal Rights Fund was supported by dues paying members of the AFGE and that to charge the same contingency fees to members and non-members of the AFGE alike, would result in the dues paying members paying a higher cost of the law suit since the $5,000 retainer paid Mr. Banov came from the AFGE members prior dues payments. Beginning on or about March 26, 1981, Mr. Banov wrote a number of letters to SSA wherein he urged the SSA to pay the night differential back pay claims filed by its employees. The March 26, 1981, letter made it clear that in "cooperation with Locals 1923 and 1760, AFGE," Mr. Banov was representing SSA's former and present employees. In a follow up May 11, 1981, letter in response to an SSA April 29, 1981, letter, Mr. Banov agreed to a meeting with SSA officials to discuss the pending night differential pay claims and requested that "Mr. Harold Roof and/or Elaine Minnick of Local 1923" be present at the meeting. In a subsequent letter dated June 17, 1981, wherein the results of the scheduled meeting were discussed, Mr. Banov demanded that in the future whenever SSA deemed it necessary to interview any individual claimant with respect to a back pay claim, that he be allowed the opportunity "to be present or to send an AFGE representative in his place." Other correspondence in the record from Mr. Banov to the SSA indicates that copies of such correspondence were sent to Mr. James Rosa and Mr. Harold Roof of the AFGE. In the summer of 1981, Mr. Banov filed a class action suit against the SSA seeking the payment of the employees night differential pay claims. Discussion and Conclusions Inasmuch as the facts do not appear to be in dispute, the paramount issue to be resolved is whether or not Mr. Banov's action in charging different or higher contingency fees to non-union unit employees denied equal representation to such employees in violation of Section 7116(b)(1) and (8) of the Statute. /11/ Respondent, which would answer the question in the negative, takes the position that inasmuch as it is not the exclusive representative of employees in court actions, as opposed to grievance matters which could terminate in arbitration at the sole option of the Union, it was under no duty to accord equal representation, i.e., identical contingency fees, to union and non-union unit members alike. In support of its position the Union relies primarily on the decision of the Ninth Circuit in Archer v. Airline Pilots Assn., 102 LRRM 2827; and District Court decisions in Lacy v. Local 287, UAW, 102 LRRM 2847; Steele v. Brewery Workers Local 1162, 102 LRRM 2459, 2485; Hawkins v. Babcock & Wilcox Co., 105 LRRM 3438. Respondent acknowledges, however, "that where a union has a right, derived from law, to represent the employees exclusively in a certain class of cases-- i.e., grievances . . . this right imposes a correlative duty not to engage in conduct which is arbitrary, discriminatory, or in bad faith." The General Counsel and the Charging Party, on the other hand, would answer the question in the affirmative, citing in support of their position a number of NLRB cases which were based on the Supreme Court's decision in Vaca v. Sipes, 386 U.S. 171, and the Authority's decisions in NTEU Chapter 202, 1 FLRA 104 and FASTA, NAGE, 2 FLRA 103. It is well established and conceded by the Respondent, that where a union is the exclusive representative and has the sole access to arbitration by virtue of the terms of the collective bargaining agreement, the union is under an obligation to accord equal representation to all unit members irrespective of union membership or allegiance. Vaca v. Sipes, supra; Tidewater Virginia Federal Employees, MTC, IAM Local No. 441 and Douglas Edwards Burns and Norfolk Naval Shipyard, 8 FLRA 47; Machinist Local 697, 91 LRRM 1529. However, as noted by the Respondent, where the union, irrespective of its status as exclusive representative, does not have sole or exclusive control over the access to a particular forum or procedure through which an employee seeks redress, the union does not violate its statutory duty of fair representation when it fails to assist or process employees grievances in such forum. Archer v. Airline Pilots Association, 102 LRRM 2829; International Brotherhood of Workers v. Foust, 442 U.S. 42, 101 LRRM 2365. With the above principles of law in mind, I now turn to the application of the facts in the instant case to the existing case law. The record evidence establishes, and I find, that Mr. Banov was indeed an agent of the Respondent Union and that in such circumstances the Respondent Union was responsible for his actions. Thus, it is noted that Mr. Banov was retained by the Respondent Union to file a class action law suit on behalf of the unit employees represented by the Respondent because the Union hoped the suit would speed up the recoupment of the night pay differential allegedly owing to a number of such unit employees. Thereafter, the arrangement was published in the Union's newspaper along with a "consent to representation" form which provided for different contingency fees, depending on whether or not the affected unit employee was a member of the Union. Both Mr. Banov and Mr. Rosa acknowledged that the different contingency fee schedule was a product of their joint thinking and was an attempt to prevent Union members being assessed a greater amount of money than their non-union counterparts. If the contingency fees had been identical, Mr. Rosa and Mr. Banov were of the opinion that Union members would have been paying more money towards the cost of the class action suit, since the $5,000 retainer came indirectly in part from periodic union dues paid by the Union members. Additionally, the record makes it clear that Mr. Banov was acting in behalf of, and in conjunction with, the Union with respect to the legal strategy and preparation of the class action law suit. In fact Mr. Banov informed the SSA that there should be no further discussions with individual employees concerning the night pay differential without either his or the Union's presence. Finally, Mr. Banov acknowledged that he met on a number of occasions with the Union representatives for purposes of discussing the status of the case and strategy. Following the retention of Mr. Banov as its agent in the class action suit, the Union for all intents and purposes, was in the posture of attacking the SSA night differential pay problem on two fronts, i.e., grievance machinery and class action law suit. Inasmuch as the collective bargaining agreement in effect gave the Union the sole access to arbitration, the final step in the grievance procedure, it and it alone, controlled the destiny or fate of the affected employees and thus according to Vaca v. Sipes and International Brotherhood of Workers v. Foust, supra, imposed upon the Union the duty and/or responsibility of equal representation of all unit employees, irrespective of union membership. However, such was not the case with regard to the class action law suit since employees could join the class action law suit or seek their own counsel in a separate law suit without the permission or blessing of the Union. In view of the foregoing conclusions, the question remaining for consideration or decision, is whether the Union's institution of the class action law suit was so integrally related to the pending grievances as to be part and parcel of such action, and thereby imposing upon the Union the duty of equal or fair representation. Had the suit been a substitute for arbitration, which was in the sole control of the Union, then it would appear that the question should be answered in the affirmative, since the Union would then be precluding unit non-union members from equal representation. However, the record facts do not support such a conclusion. In this respect, the sketchy facts in the record indicate that on the basis of the Comptroller's decision, there was no dispute as to the merits of the grievances concerning the liability of SSA for the night differential pay. It was only the amount, if any, due the employees which remained to be computed. To this end the parties had mutually agreed on a task force to investigate the facts underlying each and every claim. In such circumstances, until the research and/or investigation of the many many claims had been completed, and a possible dispute arose, there would appear to be no need for invoking arbitration. Accordingly, it appears highly unlikely that the class action law suit was intended to be a substitute for arbitration. Rather, it appears that such action was merely a vehicle for prodding the SSA to speed up action on the pending night differential pay claims which had been filed by both the Union and individual employees as grievances. /12/ In conclusion, I find that it is only those proceedings that are in the sole control of the Union by virtue of its certification that impose upon the Union the duty of fair representation. To the extent that a Union opts to utilize other routes which are open to all employees and not within its sole control, as a supplement, but not a substitute, for pending grievance actions, as here, then the Union is not obligated to accord equal representation to all employees, irrespective of membership in the Union. Accordingly, I find that the class action suit herein constitutes a benefit of union membership as opposed to a right flowing from the Union's exclusive status as the collective bargaining representative, and conclude that under the circumstances the Union did not deny fair representation to the non-union unit employees by retaining an attorney to file a class action law suit and allowing the attorney to charge different contingent fees depending on whether or not the unit employee was a member of the Union. In view of the above findings and conclusions, it is hereby recommended that the Complaint be dismissed in its entirety. BURTON S. STERNBURG Administrative Law Judge Dated: September 16, 1982 Washington, D.C. --------------- FOOTNOTES$ --------------- /1/ Section 7116(b) provides in pertinent part: Sec. 7116. Unfair labor practices . . . . (b) For the purpose of this chapter, it shall be an unfair labor practice for a labor organization-- (1) to interfere with, restrain, or coerce any employee in the exercise by the employee of any right under this chapter; . . . . (8) to otherwise fail or refuse to comply with any provision of this chapter. /2/ Section 7114(a)(1) provides: Sec. 7114. Representation rights and duties (a)(1) A labor organization which has been accorded exclusive recognition is the exclusive representative of the employees in the unit it represents and is entitled to act for, and negotiate collective bargaining agreements covering, all employees in the unit. An exclusive representative is responsible for representing the interests of all employees in the unit it represents without discrimination and without regard to labor organization membership. /3/ Compare, American Federation of Government Employees, Local 1778, AFL-CIO, 10 FLRA 346, 349 (1982) (wherein the Authority dismissed several alleged violations of section 7116(b)(8) of the Statute, finding that the General Counsel had failed to meet the burden of proving that the union had discriminated against nonmember unit employees with workmen's compensation claims since unrebutted testimony indicated that all employees with such claims were required to pay their own attorneys' fees when claims were appealed beyond the Activity's jurisdiction). /4/ Specifically, the complaint is grounded on the alleged action of the Union in retaining an attorney to file a class action suit and allowing the attorney to charge unit employees different contingent fees based solely upon whether they were members or non-members of the Union. /5/ In the absence of any objection, the Union's Motion of May 26, 1982, to make three corrections in the transcript, should be, and hereby is, granted. /6/ The SSA was then paying employees who worked overtime 10% night differential pay based on the regular hourly rate rather than on the time and one-half overtime rate. /7/ The collective bargaining agreement provides that arbitration, the final step in the grievance procedure, "may only be invoked by the Union." /8/ Other than possibly speeding up the disposition or resolution of the back pay claims, the record fails to set forth any other advantages that may inure to the unit employees by joining in the suit rather than awaiting the outcome of the task force set up to determine SSA's back pay liability to the individual employees. /9/ The circumstances surrounding this consent form will be discussed infra. /10/ Mr. Banov testified that some 900 employees had signed consent forms which did not provide for contingency fees. /11/ To the extent that Respondent challenges the Charging Party's standing to file the instant unfair labor practice, it is concluded that the Charging Party indeed has such standing. National Treasury Employees Union, 1 FLRA No. 104. /12/ Moreover, it should be noted that the record does not indicate that any of the employees involved in the night pay differential grievances will suffer any financial harm by not being a party to the class action law suit. It is possible that the back pay claims might be subject to a statute of limitations and that the filing of the class action law suit tolls any possible statute of limitations with respect to certain claims which might become stale during a protracted investigation of the grievances by the SSA task force. However, neither the General Counsel nor the Charging Party have elaborated or mentioned this aspect of the class action law suit, nor have they shown the why or wherefor of the class action law suit, or how its existence impacts upon the rights of individual employees to have their respective grievances processed by their exclusive representative in a non-discriminatory manner.