[ v60 p281 ]
60 FLRA No. 62
UNITED STATES
DEPARTMENT OF DEFENSE
DEFENSE FINANCE
AND ACCOUNTING SERVICE
(Agency)
and
AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES
LOCAL 2510
(Union)
0-AR-3756
_____
DECISION
September 24, 2004
_____
Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members [n1]
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Lawrence M. Oberdank filed by the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions.
The Arbitrator awarded the Union $74,700 in attorney fees and $1,978.48 in costs for the representation of the grievant during a prior arbitration proceeding concerning a 14-day suspension and related matters. For the reasons that follow, we grant the exceptions in part and deny them in part, and modify the award accordingly.
II. Background and Arbitrator's Award
The grievant, a GS-7 accounting technician who is also the local Union president, was charged with four hours of absence without leave (AWOL) for failing to return to work in Charleston, South Carolina on the first available flight the morning after attending a labor-management meeting in Arlington, Virginia. He was also charged with "lack of candor" as the result of a conversation with a manager regarding his inability to return on an earlier flight. Award at 2-3. As a result of these charges, the grievant was suspended without pay for 14 days.
The Union filed a grievance which challenged the suspension as well as the Agency's barring of the grievant from the work site during his suspension and the Agency's refusal to furnish certain information related to the grievance.
In an initial award, the Arbitrator ruled that the suspension was without just cause. As such, he ordered the Agency to rescind the suspension; expunge all references to the suspension, AWOL, and lack of candor charges from the grievant's personnel file; and pay the grievant 14 days of back pay. In addition, the Arbitrator found that the Agency violated the parties' collective bargaining agreement and the Statute by denying the grievant access to the facility during his suspension, and ordered the Agency to cease and desist from such conduct in the future. The Arbitrator also found that the Agency violated the Statute by refusing to bargain in good faith by failing to provide the Union with information and ordered the Agency to cease and desist from such conduct in the future. The Arbitrator retained jurisdiction to allow the Union to file an application for attorney fees. The Agency did not file exceptions to any aspect of the Arbitrator's initial award.
In a supplemental award (Award), the Arbitrator examined the requirements set forth in 5 U.S.C. § 5596(b)(1) and 5 U.S.C. § 7701(g)(1) and found that the grievant was entitled to attorney fees. [n2]
As a preliminary matter, the Arbitrator found that the criteria provided for in 5 U.S.C. § 5596(b)(1) were met, as the grievant was denied 14 days of pay as a result of an unwarranted personnel action. The Arbitrator also established that, under the initial requirements set forth in 5 U.S.C. § 7701(g), an attorney-client relationship existed and the grievant was the prevailing party.
Upon examination of the other criteria established by 5 U.S.C. § 7701(g), the Arbitrator found that an award of attorney fees was warranted in the interest of justice because the Agency knew or should have known it would not prevail on the AWOL charge. The Arbitrator noted that the Agency's "own Supervisor's Handbook defines Absence Without Leave as `time away from the work site that has not been approved or for which a request for leave has been denied.'" [ v60 p282 ] Award at 4. In this regard, the Arbitrator found that for the time the grievant was charged with AWOL, he was scheduled to be away from his office for a labor-management meeting in Arlington, Virginia and that "[m]anagement knew [the grievant's supervisor] had approved his request for three days['] administrative leave . . . and that his travel orders authorized him to be away for the entire period." Id. The Arbitrator also found that "Section T4030H of Appendix O of the Joint Travel Regulations specifically allows one day for commercial air travel in the Continental United States." Id. at 5.
The Arbitrator concluded that the fact that:
[a]ll this was known to management . . . leads to the inescapable conclusion that [the grievant] was not AWOL while attending a labor-management meeting at [A]gency headquarters in Arlington, Virginia. AWOL only became an issue when [the grievant's supervisor] changed her mind about the length of [the grievant's] administrative leave after he returned to work . . . . Section C1059 [of the Joint Travel Regulations] does not order employees on [temporary duty assignment] to return to their permanent duty station by the earliest available transportation the day after completing their assignment, as the [A]gency argues and, therefore, does not provide the mandate needed to support a charge of AWOL in this case.
Id.
The Arbitrator also found that an award of attorney fees was warranted in the interest of justice because the Agency "would have learned the lack of candor charge was equally deficient had it conducted a prudent inquiry into the evidence presented by" the grievant. Id. at 6. According to the Arbitrator, the grievant "made a passing comment about the unfairness of the AWOL accusation against him" while discussing unrelated matters with the Agency's Director. Id. In response, the Director "accused him of lying about his inability to return on the early morning flight." Id. The Arbitrator found that the Director "was not interested in [the grievant's] explanation . . . and failed to investigate the state of affairs surrounding the change in flights to determine if they were true." Id. "Had he done so and considered the information against the background of [the grievant's] statements, [the Director] would have ascertained that the lack of candor charge was without merit because [the grievant] had not intentionally misrepresented or concealed material facts." Id. at 6-7.
Further, the Arbitrator found that an award of attorney fees was in the interest of justice "because the action in this case rendered a service to the federal work force" as the findings against the Agency in the initial award "certainly benefit federal employees at the Charleston facility." Id. at 7.
Finally, the Arbitrator found that the Union was entitled to fees for 332 hours of work at the prevailing market rate of $225 per hour. With respect to whether the amount of hours claimed was reasonable, the Arbitrator found that the 332 hours claimed by the Union attorney included time spent interviewing the grievant and other witnesses, conducting legal research, exchanging letters and having discussions with management regarding the charges against the grievant, and preparing a post-hearing brief and the application for attorney fees. The Arbitrator found that "[w]hile the [A]gency contends the hours attributed to research should be scrutinized, no evidence was offered to suggest the same were not expended or were inflated[,]" and he concluded that the requested hours for research were not "excessive or inflated[.]" Id. at 10.
Accordingly, the Arbitrator found that the 332 hours claimed was "fair" and that an award of attorney fees in the amount of $74,700.00 was "reasonable[.]" Id. at 9-10. The Arbitrator also awarded the Union expenses of $1,978.48 incurred by the attorney while representing the grievant. Id. at 10.
III. Positions of the Parties
A. Agency's Exceptions
First, the Agency claims that the award exceeds the Arbitrator's authority under the contract and does not represent a plausible interpretation of the agreement between the parties. Exceptions at 6. In this regard, the Agency claims that Article 40, section 4(c) of the parties' collective bargaining agreement limits the Arbitrator's authority to issue a make-whole remedy, and does not allow for attorney fees. [n3]
The Agency also claims that the amount of fees awarded is "not reasonable on a two-week suspension where they have not been actually incurred." Exceptions at 7. The Agency argues that "[u]nion counsel's more than twenty years of experience make it extremely unlikely that it was necessary to incur such a vast number [ v60 p283 ] of billable hours in a case where the issues were AWOL and lack of candor." Id. Citing United States Customs Service, 46 FLRA 1080, 1092 (1992) (Customs Service), the Agency claims that the Arbitrator failed to adequately scrutinize the number of hours spent on research time. Further, the Agency claims that the Arbitrator "made no attempt to evaluate the type of work to which union counsel's fees were attributed." Id. The Agency also argues that the Arbitrator should have drawn a distinction between in-office work and work requiring greater skill. In addition, the Agency argues that "[u]nion counsel should be required to demonstrate that the time claimed is attributable solely to the suspension arbitration and not [to a] removal arbitration" which occurred during the same general time period. Id. at 8. [n4]
Further, the Agency claims that the award is not in the interest of justice because, based on the facts known to the Agency at the time of its action, it could not have known it would not prevail on the AWOL or lack of candor charges. In this regard, the Agency contends that it could not have known that the Arbitrator "would base his award on an erroneous interpretation of the federal regulations governing employee leave while on official travel and the federal travel regulations" or that he would find violations of the Statute based on the document production issue or the ban of the grievant from the premises. Id. at 4.
Finally, the Agency argues that the award is deficient because it is not set out in a fully articulated, reasoned decision.
B. Union's Opposition
As to the Agency's first argument, the Union asserts that the language of the parties' collective bargaining agreement does not prohibit an arbitrator from awarding attorney fees. The Union also argues that the Authority should not consider this argument, as it was not raised before the Arbitrator.
Next, the Union contends that the amount of hours provided for in an itemized statement submitted to the Arbitrator were necessary and reasonably expended. In addition, the Union argues that the "vague request for scrutiny of `research time'" was the only argument made by Agency counsel that was submitted to the Arbitrator regarding the fee petition. Opposition at 12. In this regard, the Union claims that the Agency is precluded from raising the argument that the Arbitrator "`made no attempt to evaluate the type of work to which union counsel's fees were attributed'" before the Authority. Id. According to the Union, the Arbitrator "engaged in an extensive review of the Statement of Hours for legal services rendered[.]" Id. at 15.
In regard to the Agency's argument that it could not have known that it would not prevail on the grievance, the Union cites Authority case law standing for the proposition that the Authority must defer to the Arbitrator's factual findings. The Union contends that, as the Arbitrator engaged in a detailed factual analysis of the evidence, his decision should be upheld. The Union further argues that the Arbitrator was correct in finding that the Agency knew or should have known it would not prevail.
The Union also argues that, in the initial award underlying the fee request, the Arbitrator "devoted nearly 2 and ½ pages . . . to the travel regulations arguments, [and that] these findings and conclusions [were] never challenged on Exceptions." Opposition at 34. As such, the Union asserts that the Agency's argument that the award is based on an erroneous interpretation of the travel regulations is misplaced.
Finally, the Union claims that, as required, the Arbitrator set forth specific findings supporting his determinations on each pertinent statutory requirement. Thus, according to the Union, the award of attorney fees was set forth in a comprehensive and fully articulated decision.
IV. Analysis and Conclusions
The Agency's exceptions involve the award's consistency with law. Thus, we review the questions of law raised by the Agency's exceptions de novo. See NTEU, Chapter 24, 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. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. Id.
A. The Statutory Requirements for Attorney Fees
The threshold requirement for entitlement to attorney fees under the Back Pay Act, 5 U.S.C. § 5596, is a finding that the grievant was affected by an unjustified or unwarranted personnel action which resulted in the withdrawal or reduction of the grievant's pay, allowances, [ v60 p284 ] or differentials. See United States Dep't of Defense, Def. Distrib. Region E., New Cumberland, Pa., 51 FLRA 155, 158 (1995). Once such a finding is made, the Act further requires that an award of fees must be: (1) in conjunction with an award of back pay 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), which pertains to attorney fee awards by the Merit Systems Protection Board (MSPB). See id.
The prerequisites for an award of attorney fees under § 7701(g)(1) 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 fees must be reasonable; and (4) the fees must have been incurred by the employee. See id. [n5]
B. The Union Is Entitled to Attorney Fees
1. The Union Incurred the Fees
As the Authority has repeatedly recognized, attorney fees are incurred when an attorney-client relationship exists and counsel has rendered legal services on behalf of the employee. See, e.g., Ala. Ass'n of Civilian Technicians, 56 FLRA 231, 233 (2000). Moreover, an attorney-client relationship exists when an attorney represents an employee on behalf of a union.
In this case, the Agency does not dispute that there was an attorney-client relationship and does not support its assertion that fees were not incurred. Under Authority case precedent, bare assertions provide no basis for finding an award deficient. See, e.g., United States Dep't of Veterans Affairs, Med. Ctr., Coatesville, Pa., 56 FLRA 966, 971 (2000). Consequently, as the Agency's claim that fees were not incurred is nothing more than a bare assertion, we deny this exception.
2. An Award of Attorney Fees Is Warranted in the Interest of Justice
The Agency contends that attorney fees are not warranted in the interest of justice because there was a reasonable expectation that it could have prevailed on the charges brought against the grievant. In this regard, the Agency argues that there was sufficient justification to charge the grievant with AWOL and lack of candor, and that the Arbitrator ignored testimony from two Agency witnesses regarding the application of the Joint Travel Regulations upon which he mistakenly relied in his award. The Agency also argues that, given the evidence, it could not have known that the Arbitrator would find that the Agency violated the Statute.
The Authority evaluates whether an award of attorney fees is warranted in the interest of justice by applying the criteria established by the MSPB in Allen v. United States Postal Serv., 2 MSPR 420 (1980) (Allen). See Laborers' Int'l Union of N. Am., Local 1376, 54 FLRA 700, 702-03 (1998). According to Allen, an award of attorney fees is warranted in the interest of justice if: (1) the agency engaged in a prohibited personnel practice; (2) the agency actions are clearly without merit or wholly unfounded, or the employee is substantially innocent of charges brought by the agency; (3) the agency actions are taken in bad faith to harass or exert improper pressure on an employee; (4) the agency committed gross procedural error which prolonged the proceeding or severely prejudiced the employee; or (5) the agency knew or should have known it would not prevail on the merits when it brought the proceeding. The Authority has also stated that an award of attorney fees is warranted in the interest of justice when there is either a service rendered to the Federal workforce or there is a benefit to the public derived from maintaining the action. United States Dep't of the Army, Red River Army Depot, Texarkana, Tex., 39 FLRA 1215, 1223 (1991) (citing Naval Air Dev. Ctr., Dep't of the Navy, 21 FLRA 131, 139 (1986)).
The Arbitrator in this case expressly found, based upon full consideration and lengthy discussion of the various facts and circumstances involved, that the Agency knew or should have known that it would not prevail on the merits of its allegations against the grievant. The Arbitrator's award sets forth specific findings supporting the determination that the award of attorney fees is warranted in the interest of justice under a recognized criterion.
In support of his determination, the Arbitrator found, under Allen category five, that the Agency's actions with respect to the grievant's AWOL and lack of candor charges were without just cause because "[m]anagement knew [the grievant's] immediate supervisor . . . had approved his request for three days administrative leave . . . and that his travel orders authorized him to be away for the entire period." Award at 4. In addition, the Arbitrator found that "Section T4030H of Appendix O of the Joint Travel Regulations specifically allows one day for commercial air travel in the Continental United States." Id. at 5. The Arbitrator stated [ v60 p285 ] that the fact that "all this was known to management . . . leads to the inescapable conclusion that [the grievant] was not AWOL while attending a labor-management meeting at agency headquarters in Arlington, Virginia." Id. The Arbitrator also found that the grievance had a beneficial effect on federal employees.
Under Allen criterion 5, an award of fees is warranted in the interest of justice when the agency knew or should have known it would not prevail on the merits. This determination requires evaluation of the nature and weight of the evidence available to the agency at the time of its disputed action. This 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 the case. See NTEU, Chapter 50, 54 FLRA 250, 254 (1998). The assessment of whether an agency knew or should have known it would not prevail is primarily factual because the arbitrator evaluates the evidence and the agency's handling of the evidence. Consequently, when the factual findings support the arbitrator's legal conclusion, we deny the exceptions to the arbitrator's determination. See id. at 254-55.
In view of the Arbitrator's factual findings, to which we defer, the Arbitrator's legal conclusion that the Agency knew or should have known that it would not prevail is consistent with the applicable standard of law. See United States Dep't of Defense, Dep't of Def. Dependents Schools, 54 FLRA 773, 790-91 (1998). [n6] The Agency has not established that the Arbitrator's factual findings, that there was insufficient justification to charge the grievant with AWOL and lack of candor, or his application of the Joint Travel Regulations, were in error.
Accordingly, we deny this exception.
3. The Arbitrator Did Not Fail to Set Forth a Fully Articulated Decision
The Agency claims that the award is deficient because the Arbitrator's award is not sufficiently articulated. This claim is without merit because, as is clear from the award, the Arbitrator sufficiently articulated his reasons with respect to each of the elements necessary to support an award of attorney fees. As such, the record permits us to appropriately resolve the exceptions disputing the Arbitrator's determinations on pertinent statutory requirements. [n7]
Accordingly, we deny this exception.
4. The Award Does Not Exceed the Arbitrator's Authority or Fail to Draw its Essence From the Parties' Collective Bargaining Agreement
The Agency argues that Article 40, section 4(c) of the collective bargaining agreement does not provide the Arbitrator with the authority to award attorney fees and, therefore, that the award "fails to draw its essence from the parties' agreement to make the employee whole." Exceptions at 27.
Section 2429.5 of the Authority's Regulations provides, in pertinent part, that "[t]he Authority will not consider evidence offered by a party, or any issue, which was not presented in the proceedings before the . . . arbitrator." 5 C.F.R. § 2429.5. As there is no indication in the record that the Agency argued to the Arbitrator, as it has in its exceptions, that an award of attorney fees was not authorized based on Article 40, section 4(c) of the collective bargaining agreement, we dismiss this exception because its consideration is barred by § 2429.5. See, e.g., AFGE, Local 1546, 59 FLRA 126 (2003).
C. The Amount of Fees Awarded Is Not Reasonable
1. Preliminary Matter
The Union contends that § 2429.5 of the Authority's Regulations precludes the Agency from claiming in its exceptions that the Arbitrator "made no attempt to evaluate the type of work to which union counsel's fees were attributed[.]" Opposition at 12. In this regard, the Union argues that the only challenge the Agency made to the Arbitrator "to any specific item" of the attorney fee application was a "vague request for scrutiny of `research time[.]'" Id.
To the extent that the Union's argument is construed as a contention that the Agency may not now challenge the reasonableness of the fees awarded because it did not do so before the Arbitrator, we reject this contention. In its post-hearing brief to the Arbitrator, [ v60 p286 ] the Agency noted that, under 5 U.S.C. § 7701(g), attorney fees "are permissible only where" all of the statutory standards, including the standard that the "fees are reasonable[,]" are met, and argued that the Union's application for attorney fees "does not meet these standards." See Attachment 2 to Agency's Exceptions (Agency Brief in Opposition to Union's Application for Attorney Fees) at 1. Further, the Agency argued in its post-hearing brief that "[e]ven if entitlement has been established . . . the request for $75,000 in attorney's fees for the arbitration of a two-week suspension is, under no standard, in the interests of justice or reasonable." Id. at 12.
Accordingly, the Agency clearly challenged the reasonableness of the attorney fee application before the Arbitrator. As such, § 2429.5 does not preclude our consideration of the Agency's argument in its exceptions that the attorney fees awarded are not reasonable within the meaning of 5 U.S.C. § 7701(g).
2. The Amount of the Fees Awarded Is Not Reasonable and Will Be Modified
The Agency challenges the reasonableness of the hours expended on the case by the Union's attorney. The Agency asserts that the number of hours awarded to the Union is unreasonable because the nature of the case and the experience of the Union attorney make it "extremely unlikely that it was necessary to incur such a vast number of billable hours[.]" Exceptions at 7. The Agency also claims that the Arbitrator failed to draw a distinction between in-office work and work requiring greater skill. In addition, the Agency maintains that the Union attorney should have been required to demonstrate that none of the hours claimed were attributable to the removal arbitration involving the grievant.
In resolving exceptions to attorney fee awards under the Back Pay Act, the Authority applies the decisions of the MSPB and the Federal Circuit addressing the standards of § 7701(g) because these standards have been expressly adopted by the Back Pay Act. See, e.g., AFGE, Local 1547, 58 FLRA 241, 242-43 (2002). In addition, the Authority has also considered relevant decisions of other federal courts where appropriate. See, e.g, United States Dep't of Justice, Bureau of Prisons, Wash., D.C. and Bureau of Prisons, Fed. Corr. Inst., Ray Brook, N.Y., 46 FLRA 1002 (1992) (Authority agreed with the U.S. Courts of Appeals for the District of Columbia and Ninth Circuits, which, contrary to the MSPB and the Federal Circuit, held that when a union maintains a legal representation fund, attorney fees for union-employed attorneys should be calculated on a market rate, rather than on a cost-plus, basis).
Furthermore, the Authority has recognized that identical or similar standards to those of § 7701(g) apply under other federal fee-shifting statutes, and has taken into account federal court decisions applying those other statutes. See AFGE Local 1547, 58 FLRA at 243 (adopting the definition of "prevailing party" set forth in Buckhannon Bd. & Health Care, Inc. v. W. Va. Dep't of Health & Human Resources, 532 U.S. 598 (2001), a decision which involved the Fair Housing Amendments Act and Americans With Disabilities Act rather than § 7701(g)). Likewise, the MSPB and the Federal Circuit also look to decisions of other federal courts when applying the standards of § 7701(g). See, e.g., Crumbaker v. Merit Systems Protection Bd., 781 F.2d 191, 195 (Fed. Cir. 1986) (citing decisions from the D.C., 1st, 2nd, 6th, and 7th Circuits), modified as to other matters, 827 F.2d 761 (Fed. Cir. 1987) (Crumbaker); Harris v. Dep't of Agric., 33 MSPR 237, 240 (1987) (citing Northcross v. Bd. of Educ. of Memphis City Schools, 611 F.2d 624, 636-37 (6th Cir. 1979)). Consequently, we will consider decisions of other federal courts, in addition to the Federal Circuit, that have applied federal fee-shifting statutes with standards identical to § 7701(g), such as the requirement that the amount of fees must be reasonable.
The starting point in the determination of whether an award of attorney fees is reasonable is the "number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Dep't of the Air Force Headquarters, 832d Combat Support Group DPCE, Luke Air Force Base, Ariz., 32 FLRA 1084, 1100 (1988) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (Hensley)) (Luke AFB). "[F]ee requests must be closely examined to ensure that the number of hours expended was reasonable." United States Dep't of Def. Educ. Activity, Arlington, Va., 57 FLRA 23, 26 (2001) (quoting United States Dep't of the Treasury, IRS, Wash., D.C., 48 FLRA 931, 935 (1993)). The Authority scrutinizes the number of hours for which fees were awarded because the number of hours expended are not necessarily those "reasonably expended." See Luke AFB, 32 FLRA at 1101 (quoting Hensley, 461 U.S. at 434); accord Losure v. Interstate Commerce Comm., 18 MSPR 388, 393 (1983) (citing Copeland v. Marshall, 641 F.2d 880 (D.C. Cir. 1980) (en banc) (Copeland)) (Losure)).
In assessing whether the amount of an award of fees is reasonable within the meaning of § 7701(g), the MSPB imposes standards of "efficiency and economy of time." Kling v. Dep't of Justice, 2 MSPR 464, 472-73 (1980). Accordingly, the MSPB has reduced an attorney fee award when the claimed number of hours is [ v60 p287 ] excessive or not necessary. See, e.g., Rose v. Dep't of the Navy, 47 MSPR 5, 12 (1991) (Rose). In Rose, the MSPB also authorized the reduction of fees where there was insufficient evidence to establish that the requested fees were reasonable and approved percentage reductions of fees. Id. at 13, 17. [n8]
More specifically, in assessing efficiency and economy of time, the MSPB applies the factors set forth in the landmark case of Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974) (Johnson). See Kling v. Dep't of Justice, 2 MSPR 464, 471 n.6 (1980). In Johnson, the court suggested that fee awards be based on the following criteria: (1) the time and labor required; (2) the novelty and difficulty of issues; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment due to acceptance of the case; (5) the customary fee for similar work in the community; (6) the fixed or contingent nature of the fee; (7) time limitations imposed by the client or circumstances; (8) the amount involved and result obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Accordingly, under Johnson, a fee award is not reasonable if the amount of the attorney fees is significantly disproportionate to the amount involved in the case. See, e.g., Copper Liquor, Inc., v. Adolph Coors Co., 684 F.2d 1087, 1097 (5th Cir. 1982), overruled as to other matters, Int'l Woodworkers of Am. v. Champion Int'l Corp., 790 F.2d 1174 (5th Cir. 1986) (amount of fee award reduced by 25% because it was significantly disproportionate to the amount involved) (Copper Liquor); Watson v. State Farm Lloyds, 2000 WL 42174 (N.D. Tex. 2000) (fees totaling 55% of the amount involved were not reasonable).
In assessing efficiency and economy of time, the MSPB also takes into account the attorney's expertise in labor and employment law, which is reflected in the market rate for the services rendered. See, e.g., Sailor-Nimocks v. OPM, 66 MSPR 438, 443-44 (1995) (amount of time allowed for research reduced, in part, because of the extent of the attorney's years of practice in federal sector labor law) (Sailor-Nimocks); Emelio v. Postal Serv., 27 MSPR 233, 237 (1985) (because of counsel's claimed expertise in labor law, the MSPB determined that time spent on legal research was "unreasonably long") (Emelio).
The Supreme Court further advises that under fee-shifting statutes, attorneys who are not being compensated at market rates by their clients must exercise "billing judgment." Hensley, 461 U.S. at 434. In the Court's view, this requires an effort to exclude from a fee request hours that are "excessive, redundant, or otherwise unnecessary." See id.; accord Luke AFB, 32 FLRA at 1101 (quoting Hensley, 461 U.S. at 434). The Court admonished that "[i]n the private sector, `billing judgment' is an important component in fee setting. It is no less important here. Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority." Hensley, 461 U.S. at 434 (quoting Copeland, 641 F.2d at 891) (emphasis in original). [ v60 p288 ]
In evaluating whether "billing judgment" has been exercised, a determination must be made as to "what the case should have cost the party who submitted the request." Crumbaker, 781 F.2d at 195.
Applying these principles here, we find, for the following reasons, that the amount of the attorney fees awarded by the Arbitrator is deficient because it is not reasonable.
In this case, the grievance concerned the 14-day suspension of the grievant, and the ancillary issues of the Agency's denial of access to the work site to the grievant during that suspension, and the Agency's failure to provide the Union with information. The award of attorney fees in the amount of $74,700 was based on the expenditure of 332 hours at an hourly rate of $225. Included in the 332 hours are approximately 33 hours for research, 44 hours for the post-hearing brief, and 31 hours for the fee application itself.
The Arbitrator's determination of the hourly rate was based on a market determination in consideration of the attorney's experience in labor and employment law. As indicated in his affidavit in support of the attorney fee request, the attorney has been on the staff of the American Federation of Government Employees since 1979. In his affidavit, he stated that he has represented numerous employees before MSPB and arbitrators, has significant experience before the Authority and the courts at both trial and appellate levels, and has extensive experience in brief preparation, including briefs to the United States Supreme Court.
In view of the attorney's extensive experience in labor and employment law, the 33 hours spent for research and the 44 hours spent on the post-hearing brief are excessive given the nature of the case; that is, one arising out of a 14-day suspension. The attorney's fee application detailed the activities for which he billed the Union and a breakdown of the number of hours associated with various activities. The attorney billed the Union for 44 hours in preparation of the post-hearing brief. In Emelio, 27 MSPR at 237, the MSPB found the amount of time expended for research was excessive because of counsel's expertise in labor law, and reduced the hours claimed from 24.4 hours to 10 hours. See also e.g., Sailor-Nimocks, 66 MSPR at 443-44 (amount of time allowed for research reduced, in part, because of the extent of the attorney's years of practice in federal sector labor law). Similarly, in the instant case we believe that is it is appropriate to reduce the amount of hours the attorney billed for research and the post-hearing brief, given the level of the attorney's experience in labor and employment law. Accordingly, the 33 hours claimed for research will be reduced to 13 hours. For the same reason, the 44 hours claimed for preparation of the post-hearing brief will be reduced to 18 hours. This reduces the total hours claimed in these categories from 77 hours to 31 hours, reducing the total hours from 332 hours to 286 hours.
The MSPB has also ruled that preparation of time charges and calculating fees is mostly clerical, see, e.g., McKinney v. Dep't of the Air Force, 26 MSPR 267, 269 (1985) (McKinney), and has found the time spent preparing a motion for attorney fees to be excessive in several cases and reduced those hours significantly, see, e.g., May v. Dep't of Transp., 28 MSPR 357, 364 (1985) (time spent preparing motion for attorney fees reduced from 20.75 hours to 10 hours); Logan v. United States Dep't of Housing & Urban Dev., 23 MSPR 345, 351 (1984) (amount of time spent on attorney fee motion reduced by half); McKinney, 26 MSPR at 269-70 (time spent in preparing time charges and calculating fees reduced from 2.5 hours to .5).
The hours that the attorney claimed for preparing the fee application in this case are excessive in light of the record before us. Consistent with the MSPB decisions cited above, the hours claimed in this category will be reduced from 31 hours to 9 hours, because the 31 hours claimed for the "preparation of application for fees" appear to be attributable to time spent on the motion for attorney fees as well as preparing time charges and calculating fees. See Agency's Exceptions, attachment 21. This reduces the total hours claimed in this category from 31 hours to 9 hours, reducing the total hours from 286 hours to 264 hours.
In addition, we reduce the remaining hours claimed because the fee award is significantly disproportionate to the amount involved in this case and to account for a failure to exercise billing judgment.
This matter was a fairly straightforward case: involving the 14-day suspension of the grievant, the Agency's denial of access to the grievant during that suspension, and the Agency's failure to provide the Union with information. We recognize that because the grievant also served as the local Union president, the Union had institutional interests beyond the 14 days of pay involved in the suspension. Nevertheless, in our view, the amount of the fee award is significantly disproportionate to the amount and interests involved and should be reduced accordingly.
Similarly, based on our finding that the hours claimed are excessive, we find no evidence of the exercise of billing judgment in this case. As the Supreme [ v60 p289 ] Court held in Hensley, hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority. Hensley, 461 U.S. at 434. Under § 7701(g), the Federal Circuit considers what the case should have cost the grievant. See Crumbaker, 781 F.2d at 195.
Accordingly, we will reduce the remaining total hours to account for the fee award being significantly disproportionate to the amount involved and for the failure to exercise billing judgment. The Authority has not previously had occasion to apply a remedy for the failure to exercise billing judgment. Likewise, it appears that the Federal Circuit and the MSPB have not had occasion to apply a remedy for the failure to exercise billing judgment. However, several cases have applied the remedy of reducing the hours by a percentage. See Copper Liquor, 684 F.2d at 1097 (amount of fee award reduced by 25% because it was significantly disproportionate to the amount involved); Hopwood v. State of Texas, 236 F.3d 256, 278-79 (5th Cir. 2000) (amount of fee award reduced by 25% for failure to exercise billing judgment); Walker v. United States Dep't of Housing & Urban Dev., 99 F.3d 761, 770 (5th Cir. 1996) (proper remedy for failing to exercise billing judgment is to reduce compensable hours a percentage). We believe that such an approach is warranted here. As such, we reduce the remaining total hours by 25% to account for the fee award being significantly disproportionate to the amount involved and by another 25% for the failure to exercise billing judgment. This results in reducing the compensable hours from 264 hours to 148.5 hours, reducing the amount of attorney fees from $74,700 to $33,412.50.
Finally, we deny the Agency's claims that the amount of the award is deficient because the services may not be attributable solely to the grievant's suspension and because the amount should reflect distinctions on the basis of the type of service. The Agency has failed to demonstrate that any portion of the fee award is attributable to the removal case. Likewise, the Agency has failed to demonstrate that the standards established under § 7701(g) require distinctions based on the type of legal service performed. See, e.g., Crumbaker, 781 F.2d at 193-94 (the appropriate billing rate for travel time is the same billing rate for other time spent on a case because the attorney incurs an opportunity cost equal to the fee that would have been charged to another client had the attorney not been traveling); accord NAGE Local R5-188, 46 FLRA 458, 466 (1992).
VI. Decision
Consistent with the preceding discussion, the Agency's exceptions are granted in part and denied in part. The award of attorney fees is reduced to $33,412.50.
Appendix
5 U.S.C. § 5596(b)(1) provides, in pertinent part:
An employee of an agency who, on the basis of a timely appeal or an administrative determination (including a decision relating to an unfair labor practice or a grievance) is found by appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee --
(A) is entitled, on correction of the personnel action, to receive for the period for which the personnel action was in effect --
. . . .
reasonable attorney fees related to the personnel action which, with respect to any decision relating to an unfair labor practice or a grievance processed under a procedure negotiated in accordance with chapter 71 of this title . . . shall be awarded in accordance with standards established under section 7701(g) of this title . . . .
5 U.S.C. § 7701(g) provides:
Except as provided in paragraph (2) of this subsection, the Board, or an administrative law judge or other employee of the Board designated to hear a case, may require payment by the agency involved of reasonable attorney fees incurred by an employee or applicant for employment if the employee is the prevailing party and the Board, administrative law judge, or other employee (as the case may be) determines that payment by the agency is warranted in the interest of justice, including any case in which a prohibited personnel practice was engaged in by the agency or any case in which the agency's action was clearly without merit.
File 1: Authority's Decision in 60
FLRA No.
62
File 2: Opinion of Member Pope
Footnote # 1 for 60 FLRA No. 62 - Authority's Decision
Member Pope's decision, dissenting in part, is set forth at the end of this decision.
Footnote # 2 for 60 FLRA No. 62 - Authority's Decision
The pertinent parts of 5 U.S.C. § 5596(b)(1) and § 7701(g) are set forth in an Appendix to this decision.
Footnote # 3 for 60 FLRA No. 62 - Authority's Decision
Article 40, section 4(c) provides that "the arbitrator will have the authority to make an aggrieved employee whole to the extent such remedy is not prohibited by statute, higher-level regulations, decisions of appropriate higher authority, or this Agreement."
Footnote # 4 for 60 FLRA No. 62 - Authority's Decision
An expedited arbitration hearing to resolve a separate grievance regarding the grievant's removal was held on February 18, March 19-21, April 11, and April 23-23, 2003. The underlying award preceding the application for attorney fees in this case was issued following a 5-day hearing that took place on April 8-9 and May 28-30, 2003.
Footnote # 5 for 60 FLRA No. 62 - Authority's Decision
As the Agency challenges only whether the fees were incurred and whether the award of fees was warranted in the interest of justice and was reasonable, we do not address the other statutory requirements. See United States Dep't of Veterans Affairs, Med. Ctr., N. Chicago, Ill., 52 FLRA 387, 398 n.9 (1996).
Footnote # 6 for 60 FLRA No. 62 - Authority's Decision
Because an award of attorney fees is warranted in the interest of justice if any one of the criteria is met, we need not examine the Arbitrator's additional determination that the grievance had a beneficial effect on federal employees.
Footnote # 7 for 60 FLRA No. 62 - Authority's Decision
Even if the Arbitrator had failed to sufficiently articulate his award, such a failure would not have rendered the award deficient. As the Authority explained in United States Dep't of Agric., Animal & Plant Health Inspection Service, Plant Prot. & Quarantine , 53 FLRA 1688, 1695 (1998), when an arbitrator has not sufficiently explained a determination on a pertinent statutory requirement, the Authority will examine the record to determine whether it permits us to properly resolve the exception. In cases where the record permits us to properly resolve the exception, we will modify the award or deny the exception, as appropriate. In cases where the record does not permit us to determine the proper resolution of the exception, we will remand for further proceedings.
Footnote # 8 for 60 FLRA No. 62 - Authority's Decision
In certain circumstances the MSPB will remand to the administrative judge (AJ) for further adjudication. See, for example, Martinez v. United States Postal Serv., 89 MSPR 104 (2001) (AJ never determined reasonable market rate); Diehl v. United States Postal Serv., 88 MSPR 104 (2001) (remanded for AJ to determine which tasks were attributable to clerical work where fee agreement required lower rate); Lynch v. Dep't of Educ., 65 MSPR 407 (1994) (record insufficient to determine the amount attributable to unrecoverable expenses); Smit v. Dep't of the Treasury, 61 MSPR 612 (1994) (record insufficient to identify specific hours related to unsuccessful claims); Soc. Sec. Admin., Dep't of Health & Human Serv. v. Goodman, 33 MSPR 325 (1987) (attorney did not submit hourly breakdown of fees); Steger v. Def. Investigative Serv., 19 MSPR 462 (1984) (same). However, we do not view the remand policy of the MSPB to be binding on us in the review of arbitration awards under § 7122 of the Statute. The policy is not a standard set forth in § 7701(g). See United States Dep't of Agric., Animal & Plant Health Inspection Serv., Plant Prot. & Quarantine, 53 FLRA 1688, 1695 (1998) (Authority determined to no longer apply as a statutory requirement for an award of attorney fees the MSPB's requirement of its administrative judges that they resolve requests for attorney fees in a fully articulated, reasoned decision). Moreover, in resolving exceptions, the Authority has specifically acknowledged the differences between cases before the MSPB and cases before arbitrators and the Authority. See Naval Air Dev. Ctr., Dep't of the Navy, 21 FLRA 131, 135 (1986). With respect to remands, there are different financial consequences to parties between a remand by the MSPB to one of its own AJs in an administrative proceeding and an order of the Authority directing the parties to resubmit a matter to private arbitration.In any event, a remand is not necessary in this case because the fully developed record allowed the Arbitrator to address the reasonableness of the hours spent based on the time records submitted by the attorney, and similarly provides a sufficient basis for our determination herein. While the MSPB has also remanded when it has found that an administrative judge failed to address an agency's challenges with respect to hours claimed, see Casali v. Dep't of the Treasury, 81 MSPR 347, 353 (1999) (Casali), the Arbitrator here made specific findings as to the reasonableness of the award which addressed the Agency's objections. See Award at 9-10. The remedy of a reduction of fees is appropriate where the record does not show that the expenditure of the claimed hours was necessary. See Casali, 81 MSPR at 354 (citing Wright v. Dep't of Transp., 53 MSPR 427, 433 (1992); Rose, 47 MSPR at 12). The arbitrator is not required to evaluate every billable entry in a voluminous record. See Casali, 81 MSPR at 354 (citing Crumbaker, 781 F.2d at 195).