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The decision of the Authority follows:
32 FLRA No. 109
UNITED STATES OF AMERICA
FEDERAL LABOR RELATIONS AUTHORITY
DEPARTMENT OF DEFENSE
DEPENDENTS SCHOOLS, PACIFIC REGION
OVERSEAS EDUCATION ASSOCIATION
Case Nos. 0-AR-1343
(30 FLRA 1206)
ORDER GRANTING MOTION FOR RECONSIDERATION
I. Statement of the Case
This matter is before the Authority on a motion filed by the Union seeking reconsideration of that part of the Authority's decision which concerns the award of attorney fees to Ann Hurst, a Union-salaried attorney. The decision modified an award of attorney fees payable to Ms. Hurst. We determined that the method for calculating the amount of fees payable to Ms. Hurst was the cost-plus formula, rather than the prevailing market rate the Arbitrator had used.
Section 2429.17 of the Authority's Rules and Regulations permits a party that can establish extraordinary circumstances to request reconsideration of a decision. For the reasons discussed below, we grant the motion for reconsideration.
In our decision in 30 FLRA 1206, we found that the Arbitrator had used the "lodestar" method for determining the amount of fees to be awarded to Ms. Hurst, an attorney employed by the Union, and to Richard Hirn, an attorney in private practice, both of whom had represented the grievants involved in the case. The "lodestar" method involves a computation of an attorney's customary billing rate multiplied by the number of hours reasonably devoted to a case with appropriate adjustments for any special factors. In his decision, the Arbitrator had carefully scrutinized the requests made by both Ms. Hurst and Mr. Hirn and had awarded specific dollar amounts to each.
We found that the Arbitrator had properly awarded attorney fees to Mr. Hirn based on the "lodestar" method. However, as to Ms. Hurst, we found that since she is an attorney employed by the Union, attorney fees should have been based on the actual costs of services rendered--that is, use of the cost-plus method. Accordingly, we modified the Arbitrator's award and directed that the Agency reimburse the Union, as the employer of Ms. Hurst, in accordance with the cost-plus formula.
III. Union's Motion
The Union claims that the Authority erred by reducing the attorney fees payable to Ms. Hurst from the prevailing market rate (the "lodestar" method) to the cost-plus formula. In support of its position, the Union relies on the decisions of the Court of Appeals for the District of Columbia Circuit in National Treasury Employees Union v. Department of Treasury, 656 F.2d 848 (D.C. Cir. 1981) (NTEU); the Federal Circuit in Devine v. National Treasury Employees Union, 805 F.2d 384 (Fed. Cir. 1986) (Devine), petition for cert. denied sub nom. NTEU v. Horner, 108 S. Ct. 67 (1987); and the Ninth Circuit in Curran v. Department of Treasury, 805 F.2d 1406 (9th Cir. 1986) for the proposition that union-employed attorneys may receive awards of fees at the prevailing market rate rather than at the cost-plus rate if the attorneys are not required to compensate the union for any fees that are awarded in excess of the union's costs.
The Union now argues that since Ms. Hurst is not obligated to return to the Union fees awarded to her which exceed the Union's actual costs, she is entitled to an award of fees based on the prevailing rate. Therefore, the Union requests that the full fee awarded to Ms. Hurst by the Arbitrator be reinstated.
IV. Analysis and Conclusions
On reconsideration, we find that the Union's position has merit. Accordingly, we shall sustain the Arbitrator's original award of attorney fees to Ms. Hurst.
In the NTEU and Devine cases cited by the Union, the courts recognized that attorneys employed by unions may be awarded market or prevailing rates if the fees are awarded directly to the attorneys. As the court stated in NTEU:
Reasonableness, in terms of market value of the services rendered, is the sole limit on fee awards to organizationally-hired lawyers when the fees are to be paid to the lawyers alone. (Footnotes omitted.)
656 F.2d 852-53.
In order for an award of fees at the prevailing rate to be made to a union-salaried attorney, the attorney must present evidence that the fee is to be awarded directly to the attorney. Furthermore, the attorney must demonstrate that the terms of his or her employment do not require that the union be reimbursed from such a fee award for more than the actual costs the union incurred in providing the legal representation. If, on the other hand, the attorney is obligated by the terms of his or her employment with the union to turn over the entire fee award to the union, then the fee award may not exceed the actual costs the union incurred in providing legal representation.
The Union has submitted an affidavit from Ms. Hurst. That affidavit, which was also provided to the Arbitrator, states that Ms. Hurst is not obligated by virtue of her employment contract or relationship with the Union to return to the Union any attorney fees awarded to her which exceed her hourly salary. The Agency does not question or contradict Ms. Hurst's assertion. In fact, the Agency did not except to the amount of attorney fees awarded by the Arbitrator and as a result, the affidavit was not a part of the record on which the decision in 30 FLRA 1206 was made. On the basis of Ms. Hurst's uncontradicted assertion in the affidavit which is now before us, we conclude that the Union has demonstrated that Ms. Hurst is not required to turn over the entire fee award to the Union. Under these circumstances, and consistent with the decisions in NTEU and Devine, we now conclude that the Arbitrator's original award of attorney fees to Ms. Hurst was appropriate.
Accordingly, for the reasons set forth above, the Union's request for reconsideration is granted. The Authority's decision in 30 FLRA 1206 modifying the award of attorney fees to Ms. Hurst is rescinded. As the exceptions to the award were otherwise denied, we now sustain the Arbitrator's award in full.
Issued, Washington, D.C.,
Jerry L. Calhoun, Chairman
Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY
(If blank, the decision does not have footnotes.)