46:0458(40)AR - - NAGE Local R5-188 and Air Force, Seymour Johnson AFB, NC - - 1992 FLRAdec AR - - v46 p458
[ v46 p458 ]
The decision of the Authority follows:
46 FLRA No. 40
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
U.S. DEPARTMENT OF THE AIR FORCE
SEYMOUR JOHNSON AIR FORCE BASE, NORTH CAROLINA
November 3, 1992
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Wanza C. Johnson 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 Rules and Regulations. The Agency filed an opposition to the Union's exceptions.(1)
The Arbitrator resolved a grievance by awarding the grievant backpay for being assigned higher-graded duties without receiving a temporary promotion as required under the parties' collective bargaining agreement. In a supplemental award, the Arbitrator awarded the Union attorney fees. However, the amount of attorney fees awarded by the Arbitrator was less than the amount requested by the Union. The Union filed exceptions to the supplemental award.
For the following reasons, we conclude that the Arbitrator's award of attorney fees is deficient. We will remand the award of attorney fees to the parties for further proceedings consistent with this decision.
II. Background and Arbitrator's Award
The Arbitrator was asked to resolve the grievance of an employee who claimed that he was entitled under the collective bargaining agreement to a temporary promotion with backpay for performing higher-graded duties for a period of time in excess of 120 days. The Arbitrator sustained the grievance and, in an award dated December 18, 1991, awarded the grievant backpay of $148.40, an amount considerably less than the amount claimed by the grievant.
On December 31, 1991, the Union's attorney, on behalf of the Union, filed a motion with the Arbitrator requesting an award of attorney fees and expenses in the amount of $15,007.08. In support of the motion for attorney fees, the Union's attorney filed with the Arbitrator a memorandum setting forth the legal requirements for awards of attorney fees applied by the Authority in accordance with Naval Air Development Center, Department of the Navy and American Federation of Government Employees, Local 1928, AFL-CIO, 21 FLRA 131 (1986) (NADC). In his memorandum, the Union's attorney contended that: (1) there existed an attorney-client relationship between the Union's attorney and the grievant; (2) the grievant was the prevailing party in the grievance because he was awarded backpay; (3) the award of attorney fees was in the interest of justice under the criteria discussed in Allen v. U.S. Postal Service, 2 MSPB 582 (1980) (the Allen factors) and applied by the Authority pursuant to NADC; and (4) the attorney fees incurred by the grievant were reasonable. In addition, the Union's attorney submitted an itemized summary of fees and expenses and a proposed order granting attorney fees for the Arbitrator to sign. The proposed order discussed and applied the requirements of NADC to the motion for attorney fees. The Union's attorney also submitted an affidavit containing, among other things, the terms of the attorney's retainer fee arrangement with the Union.
The Arbitrator issued a supplemental award, dated March 12, 1992, in which he granted attorney fees in the amount of $1,800.00. The Arbitrator noted that the Union's attorney "receives a monthly retainer for which [sic] includes representation of the Union members, in job[-]related matters, such as; appearances before arbitrators . . . ." Award at 1. The Arbitrator found that the Union's attorney claimed legal fees and travel expenses for work performed from March 14, 1990, which was prior to the parties' agreement to go to arbitration, and continuing through the arbitration hearing and filing of post-hearing briefs. Noting that the Union's attorney filed the motion for attorney fees "as the prevailing party[,]" the Arbitrator stated that under NADC:
1. Fees must have been incurred for services as an attorney.
2. Fees may be sought only by the prevailing party[.]
3. The award of fees must be warranted in the interest of justice.
4. The amount claimed for attorney fees must be reasonable[.]
Id. at 2 (emphasis deleted).
The Arbitrator stated that he "[would] not attempt an item by item evaluation" of the Union attorney's claim but that he would "comment on a few claim charges." Id. In this regard, the Arbitrator rejected the attorney's claim of $235.50 for time that he spent on two telephone calls with the Arbitrator and for time that he spent reading a letter from the Arbitrator to the attorney concerning the payment of the Arbitrator's bill. The Arbitrator rejected the charges on the ground that the "charges did not involve the [A]gency." Id. at 2. The Arbitrator held that "charges of $1,012.50 on August 16, 1990, for review with his client, are exorbitant, as the attorney was well aware of the facts of the case." Id. The Arbitrator held that a charge of $1,080.00 covering 8 hours for the arbitration hearing which "actually lasted three and one-half hours . . . is viewed as excessive." Id. at 3. The Arbitrator also rejected a claim of $256.25 in telephone bills, stating that the bills "between the attorney and the [A]rbitrator could not be construed as any expense. Many of the phone charges for time spent, on phone calls, were of [a de minimis] nature." Id.
Concerning the remainder of the amount of $15,007.08 claimed by the Union's attorney, the Arbitrator stated that "[t]he time, expenses and legal fees claimed by the attorney were covered by said attorney's retainer fee." Id. at 3. Specifically, the Arbitrator stated that "approximately $3821.20 claimed prior to the arbitration was for time and expenses while the attorney was on retainer." Id.
The Arbitrator made the following award:
I am of the opinion that an award of $1,800.00 to the attorney is justified as the Union prevailed in part, and that the attorney is being compensated as per his retainer fee from the Union.
Id. at 4.
III. Positions of the Parties
The Union contends that the award is contrary to law, rule, and regulation because the Arbitrator failed to award reasonable attorney fees. The Union asserts that "[p]resumably" the Arbitrator found that "fees had been incurred for the services of an attorney; the [U]nion was the prevailing party; and that fees were warranted in the interest of justice . . . ." Exceptions at 2. However, the Union asserts that the Arbitrator erred in calculating the amount of fees to be awarded.
Specifically, the Union disagrees with the Arbitrator's findings that fees were not payable for: (1) work performed prior to the parties' request for arbitration of the grievance; (2) time spent travelling and meeting with the grievant in connection with the hearing; (3) time and expenses while the attorney was on retainer; and (4) telephone expenses. The Union maintains that the Arbitrator failed to determine, as required under NADC, whether the claimed attorney fees were reasonable. The Union asserts that the Agency delayed the arbitration proceeding through the use of "dilatory tactics" and, consequently, "a relatively simple case was unduly prolonged and the fees correspondingly rose." Id. at 4-5.
The Union concludes that the Arbitrator "was fully advised of the controlling case law as it relates to attorney fees and was even provided copies of pertinent cases. His decision does not comply with the law." Id. at 7. The Union asks that the Authority modify the attorney fee award to provide the Union the full amount requested.
The Agency maintains that the Union has failed to establish that an award of attorney fees is warranted under the Back Pay Act, 5 U.S.C. § 7701(g)(1), or the criteria set forth in NADC. Further, the Agency contends that, although it does not concede that an award of attorney fees is justified in this case, the amount of attorney fees requested by the Union's attorney is unreasonable. The Agency asserts that, assuming attorney fees were warranted in this case, the amount of $1,800.00 fixed by the Arbitrator is a reasonable amount, taking into consideration the simplicity of the grievance resolved by the Arbitrator. According to the Agency, the Union is merely disagreeing with the Arbitrator's decision. The Agency contends that the Union's exceptions should be denied.(2)
IV. Analysis and Conclusions
A. Requirements for Determining Reasonable Attorney Fees Under the Back Pay Act
When exceptions are filed to arbitration awards resolving requests for attorney fees under the Back Pay Act, the Authority's role is to ensure that the arbitrator complies with applicable statutory standards. United States Army Headquarters, XVIII Airborne Corps, Fort Bragg, North Carolina and American Federation of Government Employees, Local 1770, 35 FLRA 390, 392 (1990). A threshold requirement for entitlement to attorney fees under the Back Pay Act is a finding that a 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. The Back Pay Act further requires that an award of attorney 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). Id.
The prerequisites for an award of attorney fees under 5 U.S.C. § 7701(g)(1), which applies to all cases except those involving allegations of discrimination, are as follows: (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. Id. at 392-93. Further, in resolving a request for attorney fees under the Back Pay Act, an arbitrator must provide a fully articulated, reasoned decision setting forth specific findings supporting determinations on each pertinent statutory requirement. We have held that we will set aside awards involving attorney fees which are not fully articulated and reasoned. See, for example, American Federation of Government Employees, Local 1770 and U.S. Department of the Army, Headquarters, XVIII Airborne Corps, Fort Bragg, North Carolina, 44 FLRA 1287, 1290 (1992) (Fort Bragg).
In Fort Bragg, which involved an arbitrator's failure to fully articulate a denial of a request for attorney fees, we also stated that we will continue to remand or modify attorney fee awards, as necessary. In this regard, we cited Federal Aviation Administration, Washington Flight Service Station and National Association of Air Traffic Specialists, 27 FLRA 901 (1987) (FAA). In FAA, the Authority remanded portions of an arbitrator's attorney fee award that involved the determination of the reasonable amount of fees, because the arbitrator had failed to fully address all the fees claimed. Thus, in Fort Bragg, we distinguished between two types of attorney fee cases: (1) those in which an arbitrator fails to provide an articulated, reasoned decision on the factors pertaining to entitlement to attorney fees; and (2) those in which an arbitrator finds entitlement to fees but fails to provide a reasoned decision as to the reasonable amount of attorney fees. Therefore, in accordance with Fort Bragg and FAA, we hold that when an arbitrator has properly found that attorney fees are warranted under the Back Pay Act and 5 U.S.C. § 7701(g)(1), but has failed to explain how the amount of those attorney fees was calculated or has made an erroneous determination as to reasonable amount, we will either modify the award or remand the award to the parties for resubmission to the arbitrator to make the required determination as to reasonableness, consistent with legal requirements. 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. Otherwise, we will remand the award to the parties.
In the present case, after finding that an award of attorney fees was justified under the Back Pay Act and 5 U.S.C. § 7701(g)(1), the Arbitrator made errors of law with respect to the amount of fees that could be awarded and failed to fully explain the reasons underlying his calculation of reasonable attorney fees. It is not apparent from the record what the amount of attorney fees would have been if the Arbitrator had made a proper determination. We conclude, therefore, that a remand of the Arbitrator's award is appropriate. We will remand the deficient portions of the award to the parties so that they may request the Arbitrator to make a determination as to reasonable fees in accordance with legal requirements.
In Overseas Education Association and U.S. Department of Defense Dependents Schools, 39 FLRA 1261 (1991) (OEA), we reviewed the requirements imposed by Federal courts to justify a reduction in the amount of attorney fee awards from the amounts claimed by the attorney. Citing Crumbaker v. MSPB, 781 F.2d 191, 195 (Fed. Cir. 1986) (Crumbaker) and Northcross v. Board of Education, 611 F.2d 624, 637 (6th Cir. 1979), cert. denied, 447 U.S. 911 (1980) (Northcross), we stated that:
In Crumbaker, the U.S. Court of Appeals for the Federal Circuit held that there must be a clear explanation of fee awards. In reaching its decision, the court applied the standard in Northcross, 611 F.2d at 636-37, concerning fee requests. Under that standard, "if a district court decides to eliminate hours of service adequately documented by the attorneys, it must identify those hours and articulate its reasons for their elimination." Crumbaker, 781 F.2d at 195 (quoting Northcross, 611 F.2d at 636-37). "Conclusory remarks . . . are wholly inadequate[.]" Id. The court remanded the case to the MSPB to make its determination "supported by a concise but clear explanation of its reasons for any reduction of the hours awarded from those claimed[.]" Id. (emphasis in original). In [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)] the Authority specifically adopted this requirement in reviewing attorney fee requests. 32 FLRA at 1101.
OEA, 39 FLRA at 1267 (emphasis in original).
In this case, the Union excepts only to the Arbitrator's determination as to the amount of attorney fees payable. There are no exceptions properly before us concerning the validity of the Arbitrator's award of attorney fees under the other criteria set forth in the Back Pay Act and 5 U.S.C. § 7701(g)(1). Therefore, we address only whether the Arbitrator properly determined under the Back Pay Act and 5 U.S.C. § 7701(g)(1) that an award of attorney fees in the amount of $1,800.00 is reasonable. We find that, with certain exceptions discussed below, the Arbitrator's determination of the reasonable amount of attorney fees is deficient. We will remand the matter to the parties for further proceedings consistent with this decision. See Fort Bragg, 44 FLRA at 1290.
B. Application of the Requirements for Awarding Reasonable Attorney Fees in the Present Case
1. Charges of $1,012.50
The Arbitrator rejected the charges claimed for August 16, 1990, for review of the case by the Union's attorney with his client because "the attorney was well aware of the facts of the case." Id. The Union contends that the charges for that date were reasonable and necessary and that the claimed charges included travel to the site of the arbitration hearing so that the Union's attorney could meet with his client in person to discuss the case. We conclude that the Arbitrator's award concerning this charge is contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1) because, although the Arbitrator identified the specific hours and charges rejected, his reasoning and explanation for that rejection is merely conclusory and does not provide the required detailed reasons for rejecting those hours. See Crumbaker, 781 F.2d at 195; Harris v. Department of Agriculture, 33 M.S.P.R. 237, 240 (1987) (Harris). Further, to the extent that the Arbitrator rejected those charges because the charges include the Union attorney's travel time to the site of the hearing, the award is contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1). Travel time is compensable under 5 U.S.C. § 7701(g)(1) at the same hourly rate as other legal work. See Crumbaker, 781 F.2d at 194, citing Henry v. Webermeier, 738 F.2d 188, 194 (7th Cir. 1984); Bennett v. Department of the Navy, 699 F.2d 1140, 1145 (Fed. Cir. 1983) (Bennett). Accordingly, we will remand this portion of the award to the parties to obtain from the Arbitrator a detailed and reasoned decision on the reasonableness of this charge.
2. Charges of $1,080.00
The Arbitrator explained that he rejected the Union attorney's claim of $1,080.00 for 8 hours for the arbitration hearing held on August 17, 1990, because the hearing lasted for only 3 1/2 hours and "[t]his additional time is excessive." Award at 3. We note that the Union attorney's itemized billing for that date includes travel time as well as time spent attending the hearing. See Exceptions, Attachment 2. The Union contends that the attorney incurred total travel time in excess of 12 hours in connection with this case. See Exceptions at 7. As we have found, an attorney's travel time is compensable under 5 U.S.C. § 7701(g)(1) at the rate charged for legal work. See Crumbaker, 781 F.2d at 194. We conclude that the Arbitrator's rejection of the amount of $1,080.00 for the day of the hearing is contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1) because the Arbitrator rejected the claimed charges for the attorney's travel time on the day of the arbitration hearing. Further, we find that the Arbitrator's conclusory finding that the claim for 8 hours was excessive fails to satisfy the established standard for reducing the number of hours claimed for attorney fees. See Crumbaker, 781 F.2d at 195, Harris, 33 M.S.P.R. at 240. Accordingly, this portion of the award is deficient and we will remand this portion of the award to the parties to obtain from the Arbitrator a detailed and reasoned decision on the reasonableness of this charge.
3. Charges of $256.25
The Arbitrator rejected the Union attorney's claim for reimbursement of telephone toll charges of $256.25 for telephone calls between the Arbitrator and the Union's attorney on the ground that the calls were not a proper expense. The Union asserts in its exceptions that the Arbitrator erred as to the amount because the Union's attorney requested only $115.00 for telephone calls. Further, the Union denies that the telephone calls were only between the Arbitrator and the attorney and contends that the telephone calls related to the other parties involved in the grievance and were properly reimbursable. We agree with the Union that telephone toll charges are reimbursable in attorney fee awards. "An award of attorney fees under 5 U.S.C. § 7701(g)(1) may include reimbursement for an attorney's out-of-pocket expenses which are normally charged to a client, such as costs for . . . telephone tolls." Social Security Administration, Department of Health and Human Services v. Balaban, 39 M.S.P.R. 622, 625 (1989), citing Bennett, 699 F.2d at 1145. Therefore, this portion of the Arbitrator's award is deficient as contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1) and we will remand this portion of the award to the parties to obtain from the Arbitrator a detailed and reasoned decision on the reasonableness of this charge.
4. Charges Rejected Because They Were Covered by Retainer
The Arbitrator rejected $3,821.20 of the claimed attorney fees because that amount "claimed prior to the arbitration was for time and expenses while the attorney was on retainer." Award at 3. The Arbitrator also denied the remaining amount of attorney fees claimed by the Union by finding that "[t]he time, expenses and legal fees claimed by the attorney were covered by said attorney's retainer fee." Award at 3. Based on his opinion that the matter grieved was "not a complicated case" and that the Union's attorney was compensated by a retainer fee from the Union, the Arbitrator concluded that an attorney fee award of $1,800 was "justified." Id. at 3-4.
The Union contends in its exceptions that the award is deficient because the Arbitrator did not provide the proper basis for the award of $1,800.00 in attorney fees and because the Arbitrator erroneously denied fees for work performed by the Union's attorney prior to June 4, 1990. The Union asserts that the attorney was actively involved in the grievance from the outset and maintains that the Arbitrator used "an arbitrary and unreasonable date as the beginning point for a fee award." Exceptions at 3. Further, the Union contends that the Arbitrator erred by denying the request for attorney fees on the ground that the attorney was on retainer from the Union.
We agree with the Union that the Arbitrator erroneously rejected the claim for attorney fees incurred prior to June 4, 1990. The Merit Systems Protection Board (MSPB or Board) permits the reimbursement of compensation paid to an attorney for proceedings that occurred prior to the proceeding before the Board. See Wiatr v. Department of the Air Force, 50 M.S.P.R. 441, 446 (1991) (Wiatr) (an attorney's time spent prior to an MSPB proceeding "is compensable if (a) the issues involved in the prior proceeding arose from the common core of facts that formed the basis of the Board appeal, (b) the legal work performed was reasonable, and (c) the work performed in the prior proceeding significantly contributed to the success of the Board proceeding and eliminated the need for work that would otherwise have been required" in that proceeding). In this case, the Arbitrator rejected the claim for attorney fees without addressing whether the work performed by the Union's attorney prior to June 4, 1990, arose from the same set of facts involved in the grievance, was unreasonable, or failed to contribute to the grievant's success in the proceeding. Instead, the Arbitrator made a conclusory finding that the attorney's claim for work prior to June 4, 1990, was not reimbursable because that claim "was for time and expenses while the attorney was on retainer." Award at 3. The award is deficient as contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1) with regard to the hours claimed prior to June 4, 1990, and must be remanded to the parties for resubmission to the Arbitrator for consideration of the factors outlined in Wiatr.
Further, we agree with the Union that the Arbitrator erroneously relied on the fact that the attorney in this case is retained by the Union to handle cases similar to the present one involving bargaining unit employees represented by the Union. We note that MSPB has acknowledged that retainer fee arrangements between attorneys and unions may have a bearing on what constitutes a reasonable attorney fee award. See Jones v. Department of the Navy, 46 M.S.P.R. 616, 622 (1991) (same attorney as in the present case submitted affidavit claiming that he was under retainer to union and that he and union had agreed that he could keep any attorney fees awarded); O'Donnell v. Department of the Interior, 2 M.S.P.R. 445, 455 (1980) (where it is agreed that a specific fee be paid to counsel for legal services rendered on behalf of an appellant in a case before the MSPB, the MSPB will presume that the amount agreed upon represents the maximum reasonable fee which must be awarded). However, although the terms of a retainer agreement between a union and an attorney may be relevant in determining the amount of reasonable attorney fees, we are aware of no precedent for denying a request for attorney fees solely on the basis that a retainer agreement exists between an attorney and a union.
The Arbitrator denied the Union attorney's fee request solely because the attorney was on retainer from the Union. The Arbitrator provided no authority for his decision. Consequently, the Arbitrator's award in this regard is conclusory and contrary to the Back Pay Act and 5 U.S.C. § 7701(g)(1). See Crumbaker, 781 F.2d at 195; Harris, 33 M.S.P.R. at 240. This portion of the award must be remanded to the parties for further action consistent with this decision. See OEA, 39 FLRA at 1271.
Finally, we note that the Union's attorney has also submitted claims for attorney fees in connection with processing the request for attorney fees with the Arbitrator and for filing exceptions to the attorney fee award with the Authority. We remind the parties and the Arbitrator that reasonable fees for work done in relation to an attorney fee award are allowable under 5 U.S.C. § 7701(g). See Coltrane v. Department of Army, 32 M.S.P.R. 6, 10 (1986). See also Department of the Air Force Headquarters, 832D Combat Support Group DPCE, Luke Air Force Base, Arizona, 32 FLRA 1084, 1106-08 (1988) (awarding attorney fees for work performed in connection with application for attorney fees under the Back Pay Act before the Authority); FAA, 27 FLRA at 904 (the Authority remanded a portion of an award for consideration by the arbitrator of reasonable fees "including any supplemental fee requests, submitted prior to or subsequent to the [u]nion's exception" to the Authority). Consequently, the question of reasonable attorney fees for time spent in connection with the attorney fee request will be remanded to the parties to obtain from the Arbitrator a detailed and reasoned decision on the reasonableness of this charge.
5. Charges of $235.50
The Arbitrator ruled that charges amounting to $235.50 for time spent on telephone calls on March 28 and April 4, 1991, and for reading a letter from the Arbitrator to the Union's attorney on May 2, 1991, were not reimbursable attorney fees because the charges related to a dispute between the Arbitrator and the Union's attorney over payment of the Arbitrator's bill and "did not involve the Agency." Award at 2. The Union has not excepted to this finding by the Arbitrator and has provided no basis on which to reject the Arbitrator's conclusion. We conclude that the Arbitrator made the required clear and reasoned explanation for his rejection of the charges of $235.50 and the award is not deficient in this respect.
With one exception, the Arbitrator's attorney fee award fails to satisfy the requirements for determining reasonable attorney fees under 5 U.S.C. § 7701(g)(1) established by Federal courts, the MSPB, and the Authority. "Reasonable attorney fees are primarily determined by review of the attorney's customary billing rate and the number of hours devoted to the case with an eye toward imposing fair standards of efficiency and economy of time." Wiatr, 50 M.S.P.R. at 450. There must be a clear explanation of an arbitrator's reasons for reducing the number of hours claimed for attorney fees. See OEA at 1267; Kling v. Department of Justice, 2 M.S.P.R. 464, 472-73 (1980). In this case the Arbitrator has not made sufficient findings to show how the factors of hourly rate and hours claimed were applied to arrive at an attorney fee award of $1,800.00. The Arbitrator made no finding concerning the reasonableness of the hourly rate charged by the Union's attorney. Further, the Arbitrator's determinations as to the reduction in hours claimed by the attorney are, with the exception of the time claimed for communication between the Arbitrator and the attorney concerning payment of the Arbitrator's fee, conclusory and fail to meet the legal requirements for adjusting the hours claimed. Accordingly, except for the denial of charges of $235.50 for time relating to the Arbitrator's fee, the Arbitrator's attorney fee award is deficient and must be set aside. The matter will be remanded to the parties for further action in accordance with this decision.
We find no deficiency in that portion of the Arbitrator's award rejecting fees for time spent in telephone calls and written correspondence concerning the