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The decision of the Authority follows:
54 FLRA No. 35
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL TREASURY EMPLOYEES UNION
U.S. DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
CHARLOTTE, NORTH CAROLINA
May 29, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S.
Wasserman and Dale Cabaniss, Members.
Decision by Member Cabaniss for the Authority.
I. Statement of the Case
This case is before the Authority on an exception to an award of Arbitrator William P. Murphy 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 Regulations. The Agency filed an opposition to the Union's exception.
The Arbitrator denied the Union's petition for attorney fees on the ground that an award of fees is not warranted in the interest of justice.
For the reasons set forth below, we deny the Union's exception.
II. Background and Arbitrator's Awards
A. Initial Award
A GS-6 employee filed a grievance in June 1995, alleging that she was entitled to temporary retroactive promotion and pay for performing higher-graded duties--specifically, GS-7, GS-9, and GS-11 level duties--during her detail to the Agency's Special Enforcement Program Group. The Agency denied the grievance on the bases that: (1) no documentation existed showing that the grievant actually performed higher-graded duties; (2) a position description for the GS-7 level did not exist in her district; and (3) in the grievant's performance appraisal, the grievant's supervisor confirmed that the grievant's current position description was accurate.
The Union submitted the grievance to arbitration, where the Arbitrator found that the Agency's reasons for denying the grievance were improper. In reaching this legal conclusion, the Arbitrator determined that a provision of the 1993 National Higher Graded Duties Settlement Agreement (Settlement Agreement)(1) applied to grievances, including the instant one, filed under the parties' 1994 National Agreement (National Agreement). The provision of the Settlement Agreement required the Agency to consider the employee's own description of the duties performed in determining whether the employee was performing higher-graded duties. The Arbitrator also cited Authority precedent, referenced in the Settlement Agreement, to the effect that a position description for a higher grade level of the position in question obtained from anywhere else in the Agency could be used to establish the grade level for that position. In this regard, the Arbitrator found a position description from Atlanta relevant. Further, because the Arbitrator found that statements by the grievant's supervisor regarding the grievant's duties were contradictory, he accepted the grievant's explanation of her duties.
The Arbitrator sustained the grievance in part and denied it in part, ruling that the grievant had performed GS-7 level duties and was entitled to a retroactive temporary promotion with backpay.
B. Supplemental Award on Attorney Fees
The Union filed a petition for attorney fees. In pertinent part, the Union argued that attorney fees are warranted in the interest of justice based on the second and fifth criteria as set forth in Allen v. United States Postal Service, 2 MSPR 420, 435 (1980) (Allen); respectively, that the Agency's action was clearly without merit and the Agency knew or should have known that it would not prevail on the merits of the action.
In his supplemental award, the Arbitrator rejected the Union's contention that the Agency knew or should have known that it would not prevail on the merits of the action.(2) Specifically, the Arbitrator found that the Agency did not know and should not have known that: (1) he would determine that a provision of the Settlement Agreement was applicable to grievances filed under the National Agreement; (2) he would rely on case precedent referenced in the Settlement Agreement; and (3) he would rely only on the grievant's testimony as to her duties.
Accordingly, the Arbitrator concluded that the Union had not established that attorney fees were warranted under the interest of justice standard, and he denied the Union's petition for attorney fees.
III. Positions of the Parties
A. Union's Exception
The Union contends that the Arbitrator's award denying attorney fees is deficient because the Arbitrator misapplied the fifth Allen standard. According to the Union, the Agency either should have known about or had in its possession all the evidence relied on by the Arbitrator in deciding the case. Specifically, the Union argues that the Agency: (1) should have inquired as to the grievant's duties; (2) should have relied on the Atlanta position description; (3) knew of the opinion of its classification specialist stating the grievant was working above her grade; (4) was accountable for knowledge of relevant case precedent; and (5) knew of the written statements of the grievant's supervisor recommending a position upgrade for the grievant. The Union argues that, under Department of Health and Human Services, Public Health Service, Region IV, Atlanta, Georgia and National Treasury Employees Union, Chapter 210, 34 FLRA 823 (1990) (Public Health Service), these facts warrant the legal conclusion that the Agency knew or should have known that it would not prevail on the merits of its action.
The Union also cites decisions of the Merit Systems Protection Board (MSPB) holding that the "interest of justice" standard requires the payment of attorney fees in cases where the agency was negligent in investigating or preparing its case. The Union maintains that the Agency's actions in the present case amount to negligent preparation and that such negligence supports a legal conclusion that the Agency should have known its case would not succeed on the merits.
B. Agency's Opposition
The Agency contends that the disputed Allen standard does not authorize payment of attorney fees in this case. The Agency states that, inasmuch as the filing deadline for grievances under the Settlement Agreement was January 31, 1994, and the grievance in this case was filed in June 1995, under the National Agreement, it could not have foreseen the Arbitrator's reliance on a provision of the Settlement Agreement.
Further, the Agency states that the grievant's supervisor certified annually that the grievant's position description was accurate, and that the supervisor never took the necessary action to upgrade the position. The Agency claims that its reliance on the supervisor's annual certifications was justified.
IV. Analysis and Conclusions
The Union's exception involves the consistency of the arbitration award with law. As such, the Authority reviews the question of law raised in the Union's exception and the Arbitrator's award de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995). In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998) (Army Research). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
Under the Back Pay Act, 5 U.S.C. § 5596, an award of attorney fees must be in accordance with the standards of law established under 5 U.S.C. § 7701(g). U.S. Department of Defense, Defense Distribution Region East, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 51 FLRA 155, 158 (1995). As relevant here, under section 7701(g)(1), an arbitrator's award of fees must be warranted in the interest of justice and set forth specific findings supporting determinations on each pertinent statutory requirement. See Army Research, 53 FLRA at 1710; U.S. Department of the Army, Red River Army Depot, Texarkana, Texas and National Association of Government Employees, Local R14-52, 39 FLRA 1215, 1222 (1991) (Red River Army Depot). When exceptions concern the attorney fee standards of law established under 5 U.S.C. § 7701(g), which pertains to attorney fee awards by the MSPB, the Authority looks to the decisions of the MSPB and the U.S. Court of Appeals for the Federal Circuit for guidance. U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, Local 1923, 49 FLRA 858, 864 (1994).
An award of fees is warranted in the interest of justice when any one of the Allen criteria, as set forth in Red River Army Depot, 39 FLRA at 1222, is met. The criterion at issue in the instant case is whether the Agency "knew or should have known" it would not prevail on the merits with respect to its decision not to promote the grievant. Red River Army Depot, 39 FLRA at 1222-23.(3) Whether fees are warranted requires evaluation of the nature and weight of the evidence available to the agency at the time of its decision. See Mullins-Howard v. OPM, 71 MSPR 619, 626 (1996). The "knew or should have known" criterion essentially requires an arbitrator to determine the reasonableness of an agency's actions and positions in light of what information was available to it in a case. That assessment is primarily factual, because the arbitrator evaluates the evidence and the agency's handling of the evidence.
In the instant case, the Arbitrator set forth specific factual findings on which he based his legal conclusion that an award of attorney fees was not warranted because the agency did not know and should not have known it would not prevail on the merits. In particular, the Arbitrator found that the grievance was filed under the National Agreement because it was time-barred under the Settlement Agreement and the issue of the application of the Settlement Agreement did not arise until the arbitration hearing. Thus, the Arbitrator found that the Agency could not have known, in denying the grievance, that the merits of its action would be evaluated based on a provision in the Settlement Agreement.
Moreover, the Arbitrator found that, because the parties did not litigate the grievance under the Settlement Agreement, the Agency could not have anticipated that he would rely on Authority case precedent referenced in the Settlement Agreement to reject the Agency's claim that a position description from another district was irrelevant to the grievance. The Arbitrator also found that the Agency could not have known that he would conclude that the testimony of the grievant's supervisor was contradictory and that, as a result, the Arbitrator would rely exclusively on the grievant's testimony as to her job duties.
Given the Arbitrator's underlying factual findings, to which we defer, we find that the Arbitrator's legal conclusion that the Agency did not know and should not have known, at the time of its action denying the grievance, that it would not prevail on the merits in arbitration is consistent with the applicable standard of law.
This case is distinguishable from Public Health Service. In that case, the Authority found that the arbitrator's own findings, contrary to his legal conclusion otherwise, supported a determination that the agency should have known that it would not prevail on the merits of the action. In contrast, the Arbitrator's factual findings in the instant case, set forth above, support the legal conclusion that the Agency did not know and should not have known that it would not prevail.
The Union's exception is denied.
(If blank, the decision does not have footnotes.)
1. The purpose of the Settlement Agreement was to resolve a large number of higher-graded duty grievances, and the deadline for filing a claim under that agreement was January 31, 1994.
2. The Arbitrator also rejected the Union's claim that the Agency's action was clearly without merit under the second Allen standard. As the Union did not address this standard in its exceptions, this aspect of the Arbitrator's supplemental award is not before the Authority for review.
3. We note that the MSPB and Federal Circuit decisions discussing the "knew or should have known" criterion arise in a context in which an agency has taken an action against an employee, whereas the instant case presents a situation in which the Agency failed to take an action -- that is, it did not promote the grievant. In the absence of any assertion that this difference has any effect in this case, we do not address this matter further.