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The decision of the Authority follows:
35 FLRA No. 4
FEDERAL LABOR RELATIONS AUTHORITY
NAVAL FACILITIES ENGINEERING COMMAND
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
March 7, 1990
Before Chairman McKee and Members Talkin and Armendariz.(*/)
I. Statement of the Case
This matter is before the Authority on exceptions to the award of Arbitrator L. Lawrence Schultz. The Arbitrator found that the Agency did not follow appropriate procedures in reassigning the grievant. Accordingly, the Arbitrator sustained the grievance and ordered that the grievant be placed in "status quo ante." Award at 11. In addition, the Arbitrator awarded attorney fees to the grievant.
The Agency filed an exception to the Arbitrator's award of attorney fees under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Union filed an opposition to the exception.
For the reasons which follow, we conclude that the attorney fee award is contrary to the Back Pay Act, 5 U.S.C. § 5596. Therefore, we set aside the Arbitrator's award of attorney fees.
II. Background and Arbitrator's Award
The grievant's reassignment from a position as Editor, GS-9, to Facilities Inventory Assistant, GS-5, gave rise to this arbitration. The Arbitrator stated that the issue before him was whether the grievant's reassignment was consistent with applicable contractual provisions, statutes, and appropriate rules and regulations.
The Agency asserted that the GS-9 Editor position was abolished during a reorganization of its public affairs office. According to the Agency, the grievant was reassigned to the position of Facilities Inventory Assistant, GS-5, under reduction-in-force (RIF) procedures. The Agency argued that it followed applicable regulations and the collective bargaining agreement in making the reassignment. The Union responded that the Agency's actions did not meet regulatory requirements for a RIF.
The Arbitrator found that the Agency committed harmful error under 5 U.S.C. § 7701(c)(2)(A) by "engaging in an [sic] RIF unsupported in law or fact." Award at 4. In addition, the Arbitrator found that the Agency committed harmful error in preparing the grievant's performance appraisal which accompanied the RIF order. Id. at 6. Finally, the Arbitrator found that the Agency's action in demoting the grievant was in retaliation for the grievant's efforts to retain the base publication which he edited. Id. at 9.
The Arbitrator found that but for the Agency's improper actions, the grievant would have remained in the GS-9 position. Id. at 10. As a remedy, the Arbitrator found that the grievant "shall be placed in status quo ante." Id. at 11.
The Arbitrator then considered the grievant's request for attorney fees. The Arbitrator cited to opinions from various Circuit Courts of Appeals concerning awards of attorney fees under several Federal statutes. He concluded that because of the Agency's bad faith in reassigning the grievant without just cause, an award of attorney fees was appropriate. Therefore, he ordered that the Agency pay the grievant's attorney fees.
III. Positions of the Parties
The Agency filed an exception only to the Arbitrator's award of attorney fees. The Agency argues that the award of attorney fees is contrary to the Back Pay Act (the Act). The Agency asserts that there is no authority for an arbitrator to award attorney fees under the Act absent a proper award of backpay. Agency Exception at 2.
The Agency states that the grievant received grade and pay retention benefits based on 5 U.S.C. §§ 5263, 5364 when he was assigned to a lower graded position. According to the Agency, the grievant also received a pay adjustment effective January 3, 1988, based on his retained GS-9 grade. Id. at 3. The Agency concludes that because the grievant suffered no pay loss as a result of the RIF action, he was not entitled to backpay and, consequently, there is no entitlement to attorney fees.
The Union argues that the Arbitrator properly awarded attorney fees under the Back Pay Act. According to the Union, the Act does not require an actual pay loss to trigger an entitlement to attorney fees. Union's Opposition at 7. The Union argues that the grievant suffered a withdrawal or reduction in pay because the grade and pay retention benefits the Agency gave the grievant were not permanent. Id. at 8. The Union notes that the grievant would lose pay effective July 1989, when he would revert to the GS-5 pay scale. Furthermore, the Union argues that the grievant's retained GS-9 grade could not be used in a RIF. In that case, the grievant would be considered to be occupying a GS-5 position. The Union also argues that the standards set forth in 5 U.S.C. § 7701(g) for attorney fee awards have been met in this case. Id. at 9.
IV. Analysis and Conclusion
We conclude that there is no basis for an award of attorney fees under the Back Pay Act, 5 U.S.C. § 5596(b)(1). An arbitrator is authorized to award attorney fees under the Act only in conjunction with an award of backpay, allowances, or differentials. Local 12, American Federation of Government Employees, AFL-CIO and U.S. Department of Labor, 24 FLRA 134 (1986); United States Army Aviation Systems Command and National Federation of Federal Employees, Local 405, 22 FLRA 379 (1986).
In this case, the Arbitrator returned the grievant to the status quo ante. However, the Arbitrator did not award backpay, allowances, or differentials. As the Agency stated, the grievant received grade and pay retention benefits when he was assigned to a lower graded position, effective June 30, 1987. Agency Exception at 3. The Union claimed that the grievant would have lost pay in July 1989. However, the Arbitrator's award returning him to his prior position was issued prior to that date and, therefore, the grievant did not lose pay during that period as a result of the Agency's action. For the entire period of time the grievant was assigned to the GS-5 position, the grievant received the rate of pay authorized for the retained GS-9 grade. Because the employee suffered no loss in pay, allowances, or differentials during the time he was assigned to the lower graded position, there can be no award of backpay under the Back Pay Act. Accordingly, there can be no award of attorney fees under the Act.
The Union cites Donovan v. United States, 580 F.2d 1203 (3d Cir. 1978) in support of its argument that the Arbitrator's award of attorney fees met the standards of the Back Pay Act. We find the Union's reliance on Donovan to be misplaced.
In Donovan, the plaintiff sought backpay and retroactive promotion. The court stated that the plaintiff had to prove "(1) that he had 'undergone an unjustified or unwarranted personnel action' and (2) that the action 'resulted in the withdrawal or reduction of all or a part of [his] pay, allowances, or differentials'" in order to obtain backpay under the Act. Id. at 1206-07.
The first issue in Donovan was whether the plaintiff suffered an unjustified or unwarranted personnel action when the agency erroneously failed to place him on a repromotion register. The Union cites the requirement set out by the court that "to qualify as a 'personnel action' [under the Back Pay Act] the agency's action which is under attack must result in a reduction of job grade or level." Id. at 1207. In Donovan, the court determined that the plaintiff did not suffer a grade reduction. Rather, the court found that management's action caused plaintiff to suffer a delay in advancement to a higher level. Id.
In this case, the grievant did suffer an unjustified or unwarranted personnel action because he was reduced in grade. Therefore, the grievant met the first requirement under the Back Pay Act as set forth in Donovan. However, the Union's reliance on Donovan is misplaced because the grievant did not meet the second Back Pay Act requirement which the court said must be met for an award of backpay. The court underscored the second requirement by stating that "[b]ecause plaintiff has suffered no real reduction or withdrawal of benefits, and has suffered only the denial of potential benefits, he cannot come within the terms of the Back Pay Act." Id. at 1208 (emphasis in original; citation omitted). In this case, the grievant does not meet the second Donovan requirement because he suffered no loss of pay. See also United States v. Testan, 424 U.S. 392, 407 (1976) (Testan) (Back Pay Act is "intended to grant a monetary cause of action only to those who were subjected to a reduction in their duly appointed emoluments or position"). Thus, we find that Donovan supports our conclusion that there can be no backpay award under the Back Pay Act in this case and, therefore, no attorney fee award under the Act.
We recognize that if the Arbitrator had issued his award after the expiration of the grievant's pay retention benefits, the Arbitrator might have ordered that the grievant be given backpay for the period following the expiration of his pay retention benefits. If the Arbitrator had awarded backpay in that situation, attorney fees could have been awarded in conjunction with the backpay under the terms of the Back Pay Act. However, that situation is not before us. The Arbitrator's award in this case did not include a backpay remedy and, in the absence of an award of backpay, attorney fees under the Act are not permitted. See Federal Personnel Manual Supplement 990-2, subchapter 8-10.a. (without a backpay award the issues of whether attorney fees are warranted in the interest of justice and what constitutes a reasonable amount of attorney fees never arise). As Judge Adams stated in Donovan, "the Supreme Court's opinion in [Testan] dictates that inasmuch as it is a waiver of sovereign immunity, the Back Pay Act is to be strictly construed." 580 F.2d at 1211 (Adams, J., concurring in relevant part). Accordingly, we must set aside the portion of the award granting attorney fees.
The third paragraph of the award, which requires the Agency to pay attorney fees, is set aside.
Dissenting Opinion of Member Talkin
Because I do not believe that the result reached by the majority is compelled by the Back Pay Act, I dissent.
I recognize that the Back Pay Act requires "the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee" before attorney fees may be awarded. 5 U.S.C. § 5596(b); 5 C.F.R. § 550.807. I also recognize that the Back Pay Act must be strictly construed. United States v. Testan, 424 U.S. 392 (1976). Based on this mandate, the Authority in the past has properly interpreted the Back Pay Act when it has refused to award attorney fees in cases that have not included monetary remedies. For example, National Treasury Employees Union and Bureau of Alcohol, Tobacco and Firearms, 28 FLRA 258 (1987); United States Army Aviation Systems Command and National Federation of Federal Employees, Local 405, 22 FLRA 379 (1986). In my view, however, the instant case presents a unique situation that is not governed by existing precedent.
On June 30, 1987, the grievant was reassigned from a GS-9 to a GS-5 position. As found by the Arbitrator, that reassignment was retaliatory and improper. Therefore, the Arbitrator ordered a status quo ante remedy. In sum, there was an unwarranted personnel action that resulted in a reassignment to a lower-graded position and a remedy that restored the grievant to his former position and grade. Therefore, assuming, without deciding, that the fee award is reasonable and meets the standards established under 5 U.S.C. § 7701(g)(1), an award of attorney fees ordinarily would be proper. Naval Air Development Center, Department of the Navy and American Federation of Government Employees, Local 1928, 21 FLRA 131 (1986); Department of the Air Force Headquarters, 832D Combat Support Group DPCE, Luke Air Force Base, Arizona and American Federation of Government Employees, AFL-CIO, Local 1547, 32 FLRA 1084 (1988). Significantly, this is not a case where the grievant's right to the position is speculative, Local 12, American Federation of Government Employees, AFL-CIO and U. S. Department of Labor, 24 FLRA 134 (1986), or where the grievant sought pay for a position to which he had not been assigned, United States v. Testan, 424 U.S. at 407. Rather, merely because the arbitration award issued before the grievant's pay retention status lapsed, the status quo ante remedy did not result in an actual accrual or receipt of backpay in the instant case. Had the processing of the grievance been delayed, as so often occurs, or had the Arbitrator been less diligent and expeditious in writing his decision, the award might well have issued after July 1, 1989, when the grievant's pay and grade would have reverted to that of a GS-5. In that case, the status quo ante remedy would have included the payment of backpay that would have accrued, if only for a short period, and attorney fees could have been awarded without question. In that instance, as here, the grievant would have benefitted from his attorney's assistance by regaining his former position and pay status. According to the majority's decision, however, a mere difference in timing precludes an award of attorney fees in the case before us. I cannot believe that Congress intended that incongruous result. Therefore, I dissent.
(If blank, the decision does not have footnotes.)
*/ Dissenting opinion by Member Talkin.