[ v54 p1401 ]
The decision of the Authority follows:
54 FLRA No. 122
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
U.S. DEPARTMENT OF THE AIR FORCE
SEYMOUR JOHNSON AIR FORCE BASE, NORTH CAROLINA
October 30, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members.(1)
I. Statement of the Case
This matter is before the Authority on an exception to an award of Arbitrator Jerome H. Ross 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 motion for an award of attorney fees. For the reasons set forth below, we conclude that the award is contrary to the Back Pay Act. Accordingly, we set aside the award and remand for further proceedings.
II. Background and Arbitrator's Merits and Attorney Fee Awards
Prior to the event giving rise to this arbitration, the Agency suspended the grievant for 3 days for making negative statements to patients about the medical staff and gave her a written order to refrain from making such statements. The Union grieved the suspension, and the matter was submitted to arbitration. In preparation for arbitration, the Union obtained a statement from two other employees concerning a doctor's comment.(2) The grievant gave a copy of the statement to a patient who had requested it for a medical complaint that the patient was filing.
Subsequently, the Agency suspended the grievant for 13 days for "failure to refrain from making and/or instigating inflammatory communication with patients about the [Agency] and its provider staff." Merits Award at 3-4. The Agency specifically charged the grievant with having furnished the statement to the patient. The Union then grieved this suspension, and the matter was submitted to arbitration.
With respect to the merits of the grievance, the Arbitrator's award set forth two discrete issues:
I. Whether the disciplinary action taken against the grievant was for such cause as will promote the efficiency of the service and was supported by a preponderance of the evidence.
II. Whether the disciplinary action constitutes retaliation against the grievant based on her protected disclosure or her prior grievance.
Merits Award at 6.(3)
As to the first issue, the Arbitrator stated that if the grievant had initiated a communication with a patient that was critical of the medical staff, or had joined in and supported such a discussion, the Agency's decision to discipline the grievant would have been fully warranted. However, the Arbitrator found that the facts in this case were "significantly different" because the grievant was responding to a specific request from a patient who wanted the statement for a legitimate purpose. Id. at 12. Accordingly, the Arbitrator found that the Agency failed to sustain its burden of proof.
The Arbitrator then addressed the second issue and rejected the Union's claim that the suspension constituted retaliation. He noted that the grievant's behavior in providing the statement to the patient "resembled some of her prior behavior that had led to [the earlier] discipline and the written order;" Id. at 19. However, the Arbitrator went on to state that "[i]n very subtle, but very critical ways," the grievant's behavior "was not in violation of the written order." Id. The Arbitrator stated that "only slight modifications in the facts could have converted the grievant's behavior into a serious disciplinary matter." Id. Consequently, he determined that the Agency officials deciding this matter had a reasonable, although ultimately mistaken, belief that the grievant had repeated her earlier misconduct. The Arbitrator stated that "[t]he fact that the grievant had in the past pushed the envelop[e] of acceptable behavior no doubt contributed" to the Agency's judgment that she had again crossed the line of appropriate behavior. Id.
As his award, the Arbitrator sustained the grievance with backpay to the extent that the 13-day suspension shall be withdrawn, and "otherwise denied" the grievance. Id. at 21.
Thereafter, the Union filed a motion for attorney fees with the Arbitrator. In addition to asserting that the grievant was the prevailing party, the Union contended that an award of attorney fees was warranted in the interest of justice because: (1) the Agency's action was clearly without merit and wholly unfounded; (2) the grievant was substantially innocent of the charges against her; and (3) the Agency knew or should have known that it would not prevail on the merits.
The Arbitrator determined that the grievant was the prevailing party as a result of having obtained the withdrawal of the 13-day suspension and 13 days' backpay. In this regard, he stated that his determination, for purposes of the collective bargaining agreement provision, that the costs of arbitration should be evenly divided between the parties was based on different standards than are used to determine the prevailing party for purposes of an award of attorney fees.
Relying on his findings in the Merits Award concerning the retaliation issue set forth above, the Arbitrator then rejected the Union's contention that an award of fees was warranted in the interest of justice. He ruled that the Agency's action was not clearly without merit or wholly unfounded and that the Union had not demonstrated that the Agency knew or should have known that it would not prevail on the merits.
Also relying on his findings in the Merits Award concerning the retaliation issue, the Arbitrator rejected the Union's assertion that an award of fees was warranted in the interest of justice under the "substantially innocent" factor. In support of this determination, he stated:
Notwithstanding that the grievance was sustained with back pay, as stated in the [Merits Award], ". . . only slight modifications in the facts could have converted the grievant's behavior into a serious disciplinary matter." In effect, the grievant was dangerously close to facing serious discipline.
The collective import of the above findings is that while the grievant has been found innocent of the charges, the findings are based upon subtle considerations as opposed to clear substantial innocence.
Fee Award at 5 (quoting Merits Award at 19).
III. Positions of the Parties
A. Union's Exception
The Union contends that the award denying fees is contrary to law. According to the Union, an award of fees is warranted in the interest of justice because the grievant was substantially innocent. The Union claims that the "substantially innocent" standard is satisfied because the Arbitrator found, based on the facts presented, that the grievant was "totally innocent" and he overturned the suspension. Exception at 5 (citing Van Fossen v. MSPB, 788 F.2d 748 (Fed. Cir. 1986); Yorkshire v. MSPB, 746 F.2d 1454 (Fed. Cir. 1984) (Yorkshire). Noting that the Arbitrator had denied fees under this standard on the basis that "with only minor modifications to the facts the charge could have been sustained[,]" the Union asserts that this rationale is "ridiculous" because "[w]ith only slight modifications to [al]most any case, the entire case and outcome changes." Id.
The Union also argues that fees are warranted on the basis that the Agency's action against the grievant was clearly without merit and wholly unfounded, because the Arbitrator determined that the facts presented did not support the charge. The Union further claims that fees are warranted because the Agency knew or should have known that it would not prevail on the merits because the Agency presented no evidence to support its action.
Accordingly, the Union requests that the Authority award it the fees requested, as well as supplemental fees in connection with filing the exception. In the alternative, the Union requests that the Authority remand the case to the Arbitrator to determine the reasonableness of the requested fees.
B. Agency's Opposition
The Agency contends that the Arbitrator correctly determined that fees are not warranted in the interest of justice. The Agency maintains that its action was not clearly without merit because the Arbitrator found that the grievant's supervisor had acted reasonably, although ultimately mistakenly. The Agency also asserts that it did not know that it would fail on the merits.
The Agency argues that the grievant was not substantially innocent because, as found by the Arbitrator, only slight modifications in the facts could have converted the grievant's behavior into a serious disciplinary matter. According to the Agency, the line between the grievant's conduct not being a violation of her supervisor's order and constituting serious misconduct was "wafer thin." Opposition at 4.(4)
IV. Analysis and Conclusions
A. Standard of Review
The Authority reviews questions of law raised by an exception and an arbitrator's award de novo. See 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, we assess whether the arbitrator's legal conclusions are consistent with the applicable standard of law. See 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). In making that assessment, we defer to the arbitrator's underlying factual findings. See id. We "assess whether the legal conclusions drawn by the arbitrator are consistent with the applicable standard of law, based upon the underlying factual findings." Id.
B. An Award of Attorney Fees is Warranted Under the Back Pay Act.
1. The Legal Framework for Attorney Fees Cases
As relevant here, under the Back Pay Act, 5 U.S.C. § 5596, an award of attorney fees by an arbitrator must be in accordance with the standards established under 5 U.S.C. § 7701(g). Section 7701(g)(1), which applies in this case, requires, among other things, that an award of fees must be warranted in the interest of justice.
When exceptions concern standards established under section 7701(g), the Authority looks to the decisions of the Merit Systems Protection Board (MSPB) and the U.S. Court of Appeals for the Federal Circuit for guidance. See U.S. Department of Defense, Defense Distribution Region East, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 51 FLRA 155, 160 n.5 (1995) (DDRE). In Allen v. U.S. Postal Service, 2 MSPR 420 (1980) (Allen), the MSPB listed five broad categories of cases in which an award of fees would be warranted in the interest of justice: (1) involving prohibited personnel practices; (2) where agency actions are clearly without merit or wholly unfounded, or where the employee is substantially innocent of charges brought by the agency; (3) when agency actions are taken in bad faith to harass or exert improper pressure on an employee; (4) when gross procedural error by an agency prolonged the proceeding or severely prejudiced the employee; or (5) where the agency knew or should have known it would not prevail on the merits when it brought the proceeding. The Authority applies the Allen criteria in resolving exceptions to an arbitrator's determination under the interest-of-justice standard. See American Federation of Government Employees, Local 12 and U.S. Department of Labor, Washington, D.C., 38 FLRA 1240, 1250-51 (1990). An award of fees is warranted in the interest of justice if any of the Allen criteria are met. See DDRE, 51 FLRA at 162.
The Federal Circuit has relied on the legislative history to section 7701 to inform its judgments on when fees are warranted in the interest of justice. The "substantial innocence" criteria of Allen refers to the "result of the case" in the MSPB or in an arbitration award, while the "knew or should have known" criterion of Allen category 5 refers to the evidence and information available to the Agency prior to the MSPB or arbitration hearing. Boese v. Department of the Air Force, 784 F.2d 388, 391 (Fed. Cir. 1986) (Boese); Yorkshire, 746 F.2d at 1457. In Wise v. MSPB, 780 F.2d 997, 999 (Fed. Cir. 1985) (Wise), the court found that the legislative history of the interest-of-justice standard indicated that "Congress was troubled with the inherent injustice of dragging an innocent individual through expensive and time-consuming legal proceedings." Thus, the purpose of the substantially-innocent criterion is not to punish agency misconduct, but to minimize the burden an unsubstantiated accusation places upon innocent employees. See Yorkshire, 746 F.2d at 1457.
The Federal Circuit applies substantial innocence as a distinct criterion separate and independent from clearly without merit and wholly unfounded. See Van Fossen, 788 F.2d at 749. In its decisions on this criterion, the Federal Circuit has defined the meaning of substantial innocence and objectively evaluated the case before it on the merits in order to assess whether the substantial innocence criterion has been satisfied.
In Boese, 784 F.2d at 391, the court described substantial innocence as innocence of the more important and greater part of the original charges when that innocence is not based on some technical defect. In Massa v. Department of Defense, 833 F.2d 991, 993 (Fed. Cir. 1987), the court further described substantial innocence to mean that "an employee is essentially without fault for the charges alleged, and was needlessly subjected to attorney fees in order to vindicate himself." In Van Fossen, the court advised that "the extent of a party's victory is clearly relevant generally to the justice of his cause[.]" 788 F.2d at 751 n.7. In contrast, in Wise, the court ruled that an employee "who (1) knows that he is substantially innocent of the charges brought against him, (2) can prove his substantial innocence, and (3) deliberately does not communicate all the facts to the deciding official which would lead the deciding official to rule against the removal action" is not substantially innocent within the meaning of Allen criterion 2. Wise, 780 F.2d at 1000.
The determinative principle of these holdings is that substantial innocence is an objective assessment of the merits of the employee's challenge to the agency's disciplinary action. These cases demonstrate that an employee who has prevailed on substantive rather than technical grounds on the major charges is substantially innocent as a matter of law, unless the employee deliberately withheld exculpating information from the agency during its investigation.
2. The Attorney Fee Award Is Deficient under the Substantially Innocent Criterion of Allen
The Arbitrator's factual findings, to which we defer, establish that the grievant was substantially innocent within the meaning of Allen criterion 2 and, therefore, that an award of fees is warranted in the interest of justice within the meaning of section 7701(g)(1). The Arbitrator's factual findings confirm that the grievant was innocent of the sole charge on which the discipline was based--that she gave an "inflammatory" statement about an Agency doctor to a patient. In his award, the Arbitrator explained that "significantly different" facts would have led to a different result. Merits Award at 12. In particular, the Arbitrator stated that "had there been any evidence that the grievant initiated the communication with [the patient], that she urged him to pursue a complaint . . . , or that she otherwise volunteered unsolicited information that was derogatory toward [the Agency or its staff], disciplinary action would have been appropriate." Id. at 14. This is not what happened, however, and the Arbitrator's conjecture about what might have happened, but did not, does not alter the facts that the Arbitrator found were established in arbitration. Based on his finding that these facts did not support the Agency's charge against the grievant, the Arbitrator sustained the Union's claim that the discipline was improper and directed withdrawal of the suspension and backpay.
In rejecting the Union's second claim--that the Agency's disciplinary action was motivated by retaliation--the Arbitrator relied on the grievant's behavior that led to the 3-day suspension. Because he saw a "resembl[ance]" between the grievant's providing the statement to the patient and some of the grievant's prior behavior, the Arbitrator explained that "[t]he Agency officials deciding the matter had a reasonable, yet ultimately mistaken belief that the grievant had repeated her earlier behavior of instigating inflammatory communication . . . and that more serious disciplinary action was warranted." Id. at 19; Fee Award at 4.
In short, the Arbitrator resolved two distinct claims asserted against the Agency, one (the discipline claim) involving the grievant's actions and whether they merited discipline, and one (the retaliation claim) involving the Agency's actions and whether they constituted retaliation. The Arbitrator concluded that the Union prevailed on the former but not on the latter. Although the attorney fees sought by the Union pertain to the former, a careful reading of the Arbitrator's Merits and Fee awards makes it evident that he denied the Union attorney fees based on facts he found relevant in resolving the latter claim. That is, the Arbitrator denied fees requested for the claim the Union won based on his findings concerning the claim the Union lost.
The Arbitrator made distinct findings about the discipline claim the Union won, concluding that the grievant was innocent of the charge against her without any caveat that the evidence on this point was "close."(5) In his Fee award, the Arbitrator rejected the Union's claim that attorney fees were warranted for the discipline claim based on the grievant's substantial innocence, because the grievant was "in effect, the grievant was dangerously close to facing serious discipline." Fee Award at 5. However, the Arbitrator's finding that the evidence was close was made only in connection with the retaliation claim. This finding does not, in our view, support the legal conclusion that the grievant was not substantially innocent of the charges for which she was disciplined. The facts found by the Arbitrator concerning the action for which discipline was imposed establish that, like the employee in Yorkshire, the grievant prevailed on all the charges against her. Yorkshire, 746 F.2d at 1457. As such, we conclude that she is entitled to attorney fees even though the grievant did not prevail on her charge -- retaliation -- against the Agency.
We fully agree with the distinction that our colleague draws in his dissent between the responsibilities of the Authority and those of an arbitrator. The point on which we disagree is whether the findings the Arbitrator made in this case support the legal conclusion he has drawn from them. For the reasons explained above, we conclude that they do not.(6)
Accordingly, we find that the Arbitrator's denial of the Union's request for attorney fees is deficient, and we set it aside.(7) As an award of attorney fees is warranted in the interest of justice, we remand the issue of what amount of fees would be reasonable to the parties for further proceedings.(8) Absent settlement, the parties are directed to resubmit this issue to the Arbitrator.(9)
This case is remanded to the parties for resubmission, absent settlement, to the Arbitrator to grant the Union's request for an award of attorney fees and determine what amount of fees would be reasonable.
Dissenting Opinion of Member Wasserman:
The Arbitrator specifically determined that an award of attorney fees was not warranted in the interest of justice because the grievant was not substantially innocent and provided a detailed explanation of the basis for his determination. In my view, the Union provides no basis for finding deficient that determination or the Arbitrator's other determinations on the interest of justice. Accordingly, I dissent.
In reviewing the Arbitrator's determination de novo, we assess whether the Arbitrator's determination is consistent with the applicable standard of law, and, in making that assessment, we defer to the Arbitrator's underlying factual findings. Contrary to the majority, I find that the Arbitrator's determination is consistent with both his factual findings and the interest-of-justice standard.
As stated by the majority, when exceptions concern standards established under section 7701(g), we look to the decisions of the Federal Circuit for guidance. The Federal Circuit uses the legislative history to section 7701 to inform its judgments on when fees are warranted in the interest of justice. In acknowledging that Congress was concerned with the injustice of dragging innocent employees through expensive and time-consuming legal proceedings, the majority has recognized one of the concerns expressed by Congress that has informed the Federal Circuit's judgments. But at the same time, the court has emphasized that Congress advised that an award of attorney fees should not become the ordinary practice in cases that the employee wins. See Dunn v. Department of Veterans Affairs, 98 F.3d 1308, 1313 (Fed. Cir. 1996) (citing S. Rep. No. 95-969, at 61 (1978) reprinted in 1978 U.S.C.C.A.N. 2723, 2783).
As a consequence, the court has repeatedly held that a prevailing employee must go beyond an agency's failure to prove its charges to establish substantial innocence and to warrant an award of fees in the interest of justice. See, e.g., id. at 1312. Indeed, the court has denied fees under the substantial-innocence criterion notwithstanding the MSPB's reversal of an agency removal action. See Massa v. Department of Defense, 833 F.2d 991, 993 (Fed. Cir. 1987) (citing Wise v. MSPB, 780 F.2d 997 (Fed. Cir. 1985) (Wise)). Instead, employees must establish that they were essentially without fault with respect to the alleged charges. See id. In addition, the court has acknowledged that an award of attorney fees is a fact-specific determination and that consequently, regardless of whether an employee prevails on all of the charges, the closeness of the facts and evidence is a factor to be considered in determining whether the employee is substantially innocent. See id.
I assess the Arbitrator's determination as consistent with the meanings of substantially innocent and interest of justice, as interpreted by the Federal Circuit. I find that the issue of substantial innocence as presented to the Arbitrator was particularly fact specific and that his determination is supported by his underlying factual findings and the purposes and policies of section 7701(g). The grievant is not entitled to fees simply because she prevailed. The Arbitrator was authorized in determining whether an award of fees was warranted in the interest of justice to consider the closeness of the facts and evidence and whether the grievant was essentially without fault, even though those findings were expressed by the Arbitrator in the merits award with respect to the retaliation claim.
In National Treasury Employees Union, Chapter 50 and U.S. Department of the Treasury, Internal Revenue Service, Carolina District, Charlotte, North Carolina, 54 FLRA 250 (1998) (IRS, Carolina District), we denied an exception to an arbitration award, in which the arbitrator ruled that an award of fees was not warranted in the interest of justice. We noted that the arbitrator set forth specific findings on which he based his legal conclusion that the agency did not know and should not have known that it would not prevail on the merits. We further noted that in assessing the arbitrator's legal conclusions, we defer to his underlying factual findings. Based on the arbitrator's factual findings, we concluded that the arbitrator's determination was consistent with the applicable standard of law. I do not understand why the result in the case now before us should be any different.
In this case, Arbitrator Ross set forth specific factual findings on which he based his legal conclusion that the grievant was not substantially innocent. We must defer to these findings in assessing his legal determination. In my view, the Arbitrator's factual findings, no less than the arbitrator's factual findings in IRS, Carolina District, support the Arbitrator's legal conclusion.
It is critical to be mindful of the distinction between an arbitrator's responsibilities and our own duties. Again, arbitrators must set forth the specific factual findings on which they base their legal conclusions. We need not like or agree with these findings, but we are obliged to assess whether legal conclusions are consistent with the applicable standard of law based on the underlying factual findings. I am sure that it was the Arbitrator's--not the Authority's--evaluation of the record for which the parties bargained. See American Federation of Government Employees, Local 1546 and U.S. Department of Defense, Defense Logistics Agency, Defense Distribution Region West, 52 FLRA 94, 97 (1996); cf. Paperworkers v. Misco, 484 U.S. 29, 37-38 (1987) ("[b]ecause the parties have contracted to have disputes settled by an arbitrator chosen by them rather than by a judge, it is the arbitrator's view of the facts . . . that they have agreed to accept."). It is irrelevant whether I would have reached the same conclusion; I need not agree with the Arbitrator's factual findings to find that they are rational and support his legal conclusion under the applicable standard of law.
The Arbitrator in his fee award clearly expressed his reliance on the closeness of the evidence and the fault of the grievant by his references to his factual determinations in his merits award.(*) The majority rejects both the Arbitrator's reliance on his factual findings made with respect to the retaliation issue, and my deferral to those findings. The majority emphasizes that "the Arbitrator denied fees requested for the claim that the Union won based on his findings concerning the claim the Union lost." Supra at 8 (emphasis original). The implication is that somehow the Arbitrator's relevant factual findings are inapplicable to the interest-of-justice determination because they were expressed with respect to the retaliation claim, which he denied.
I am not persuaded that factual findings on which the Arbitrator relied in finding that the grievant was not substantially innocent are inapplicable to the interest-of-justice determination. I view the finding that "only slight modifications in the facts could have converted the grievant's behavior into a serious disciplinary matter" as related to the principle that closeness of the facts and evidence is a factor to be considered in determining whether an employee is substantially innocent. I also view findings that the grievant "pushed the envelope of acceptable behavior" and contributed to the Agency's action against her as related to whether the grievant was substantially innocent because she was essentially without fault.
I also am not persuaded that findings of fact can be so compartmentalized in an arbitrator's award and deprived of relevance. I cannot accept the majority's explanation that these findings are inappropriate because they were not part of the Arbitrator's resolution of the just cause issue. Contrary to the suggestion of the majority, the interest-of-justice issue is certainly more than a reiteration of the just-cause issue.
Both the MSPB and the Federal Circuit clearly examine the entire record to assess whether the employees were essentially without fault, not merely whether they prevailed on the charges against them. Indeed, both advise that the interest-of-justice determination should reflect the insights and reasoning of the administrative judge (or arbitrator) who heard the case. See Yorkshire v. MSPB, 746 F.2d 1454, 1458 (Fed. Cir. 1984) (Yorkshire); Allen v. U.S. Postal Service, 2 MSPR 420, 434 (1980). To be sure, the interest-of-justice determination cannot be based on a "reconsideration of the evidence in a new light [,]" Yorkshire, 746 F.2d at 1458, but the Arbitrator's determination that the facts were close and that the grievant was not without fault is by no means an alteration of his previous findings. Furthermore, the Federal Circuit has held that an employee's behavior independent of the charges and discipline is relevant to whether fees are warranted in the interest of justice. See Wise, 780 F.2d at 1000. In sum, after an exhaustive review of the legislative history, the MSPB ruled in Allen that the "principal constraint upon the Board's section 7701(g)(1) discretion to determine when an award is warranted arises from the Board's duty to exercise that discretion reasonably, which necessarily includes the duty [to] articulate a rational explanation for each award." 2 MSPR at 434. Clearly, the Arbitrator's explanation is rational.
Typically, arbitrators support their interest-of-justice determinations with factual findings in their supplemental awards that are based on, but were not specifically set forth in, their merits award. I note that those findings have never been subjected to the scrutiny applied by the majority to the Arbitrator's award in this case. The Authority has never rejected such support so long as it was consistent with the merits award. See IRS, Charlotte District, 54 FLRA at 255. The majority's approach to the contrary imposes a degree of formality on arbitrator's fact-finding that was never contemplated by Congress when it gave the Authority jurisdiction over exceptions to arbitration awards.
In both American Federation of Government Employees, Local 12 and U.S. Department of Labor, Washington, D.C., 38 FLRA 1240 (1990) and United States Department of the Navy, Norfolk Naval Shipyard and American Federation of Government Employees, Local 4015, 34 FLRA 725 (1990), the Authority concluded that the findings of the arbitrators supported a conclusion that the grievants were not without fault and were not needlessly subjected to attorney fees. Consequently, in both cases, the Authority denied exceptions to the determination that an award of fees was not warranted in the interest of justice under the substantial-innocence criterion. Although in both of those cases suspensions were mitigated to a reprimand, in my view, the more detailed factual findings by the Arbitrator in this case, no less than the findings of the arbitrators in DOL and Norfolk Naval Shipyard, support his legal conclusion that the grievant was not substantially innocent. I see no legal basis for allowing an arbitrator to resolve a request for fees based on findings in a supplemental award, but precluding an arbitrator from relying on relevant factual findings in the merits award. Moreover, it strikes me as inappropriate policy.
The majority's approach presents an interesting combination of three factors: (1) the appropriate legal standard; (2) deference to factual determinations of arbitrators; and (3) policy implications. To me, the unintended effect of this decision may be to upset the delicate balance of arbitral discretion so required of the process. Appropriate discretion must be permitted throughout the entire process, including the arbitrator's conduct of the hearing and structuring of the written award. We are obliged to take care not to so regulate or formalize the process that it becomes so legalistic as to be indistinguishable from litigation.
In their analysis of substantial innocence under the decisions of the Federal Circuit, the majority finds Boese v. Department of the Air Force, 784 F.2d 388 (Fed. Cir. 1986) and Yorkshire to be determinative. But in view of the legislative history, we must also apply the court's description in Massa of substantial innocence as meaning an employee who is essentially without fault. The grievant litigated her suspension before the Arbitrator, and the Arbitrator found that despite being innocent of the Agency's charges, she was not without fault because of her "push[ing] the envelope of acceptable behavior." Fee Award at 4 (quoting Merits Award at 19). I would defer to the Arbitrator and deny the Union's exception.
Authority's Footnotes Follow:
1. The dissenting opinion of Member Wasserman is set forth at the end of this decision.
2. The arbitrator in that case reduced the 3-day suspension to two separate disciplinary reprimands. The Union filed exceptions to that award, and the Authority denied the exceptions. See National Association of Government Employees, Local R5-188 and U.S. Department of the Air Force, Seymour Johnson Air Force Base, Goldsboro, North Carolina, 54 FLRA 76 (1998).
3. A third issue identified by the Arbitrator was "[w]hether the Agency or the Union is the losing party and, as such, is responsible for the fees and expenses of the [A]rbitrator under [a provision of] the parties' collective bargaining agreement." Merits Award at 6. The Arbitrator determined that, in light of his disposition of the two other issues, the provision should not be invoked and that the fees and expenses of the Arbitrator should be evenly divided by the parties.
4. The Agency also contends in its opposition that the Union was not the prevailing party. This contention effectively constitutes an exception to the Arbitrator's conclusion that the Union was the prevailing party for purposes of an award of attorney fees. As such, the contention is untimely since it was first raised in the Agency's opposition. See, e.g., Picatinny Arsenal, U.S. Army Armament Research and Development Command, Dover, New Jersey and National Federation of Federal Employees, Local 1437, 7 FLRA 703, 703 n.2 (1982).
5. We note that, although the Federal Circuit has acknowledged that closeness of the facts and evidence is a factor to consider in determining whether an employee is substantially innocent, see Massa, 833 F.2d at 993 (citing Thomson v. MSPB, 772 F.2d 879, 881 (Fed. Cir. 1985)), the principle has never been applied to reject the substantial innocence of an employee who has had discipline completely vacated on substantive grounds. Moreover, the court's only specific reference to closeness of evidence has been limited to credibility determinations. See Boese, 784 F.2d at 391 n.3; Thomson, 772 F.2d at 881. Credibility was not the type of closeness on which the Arbitrator in this case relied.
6. The dissent portrays our separate decisions as representing divergent approaches to reviewing arbitration awards rather than a different reading of whether the facts, as found by the Arbitrator, support the Arbitrator's legal conclusion. In our view, examining an arbitrator's factual findings in their entirety is neither unprecedented nor questionable policy.
7. According to Authority precedent, DDRE, 51 FLRA at 162, an award of fees is warranted in the interest of justice if any of the Allen criteria are met. Therefore, we need not address the Union's other exceptions, i.e., that the Agency knew or should have known it would not prevail or that the Agency's action was clearly without merit or wholly unfounded.
8. We reject the Union's request that we award the Union the requested fees. As the Authority has consistently held, the arbitrator, not the Authority, is the "appropriate authority" under 5 C.F.R. § 550.807(a) for resolving a union request for attorney fees. See, e.g., Alabama Association of Civilian Technicians and U.S. Department of Defense, Alabama State Military Department, Alabama National Guard, 54 FLRA 229 (1998). Moreover, the reasonableness of the requested amount cannot be derived from the record in this case. There are no findings by the Arbitrator on the reasonableness of the requested amount, and the record does not contain the Agency's position on the amount requested by the Union. See id.
9. This decision is consistent with the decision in National Treasury Employees Union, Chapter 50 and U.S. Department of the Treasury, Internal Revenue Service, Carolina District, Charlotte, North Carolina, 54 FLRA 250 (1998) (IRS, Charlotte). In IRS, Charlotte, the Authority found that the arbitrator's factual findings supported his legal conclusion. Here, we find that the Arbitrator's factual findings do not support his legal conclusions. To the extent that prior decisions, U.S. Department of Veterans Affairs, Medical Center, North Chicago, Illinois and American Federation of Government Employees, Local 2107, 52 FLRA 387, 398 (1996) and DDRE, 51 FLRA at 161-62, suggest that we defer to any articulated statement of reasons, and/or defer not only to the facts but to legal conclusions drawn from those facts, that was not our intent.
Dessenting Opinion Footnote Follows:
*/ In disputing my reliance on the Arbitrator's explanation that the facts and the evidence were close, the majority notes that this factor has never been applied by the Federal Circuit to reject the substantial innocence of an employee who has had discipline completely vacated on substantive grounds. There has been no such application because the Federal Circuit has not yet been presented with a case like this one. It is my best judgment that were such a case to be presented to the court, it would likewise defer to the arbitrator or the MSPB and find that an award of fees was not warranted in the interest of justice because the employee was not substantially innocent.