[ v61 p582 ]
61 FLRA No. 112
OF GOVERNMENT EMPLOYEES
SOCIAL SECURITY ADMINISTRATION
(60 FLRA 1 (2004))
May 10, 2006
Before the Authority: Dale Cabaniss, Chairman and
Carol Waller Pope, Member
I. Statement of the Case
This matter is before the Authority on exceptions to the clarification of an award of Arbitrator Lloyd L. Byars filed by the Union and the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency and the Union filed oppositions to the exceptions.
This case concerns the Agency's failure to afford priority consideration to several grievants. The Arbitrator denied the Union's request for an award of attorney fees and granted relocation expense reimbursement to one grievant. For the reasons that follow, we deny the Union's exception concerning attorney fees and grant the Agency's exception regarding the relocation expense reimbursement.
II. Background and Award
The background of this case and the discussion of the Authority's original decision are set forth more fully in AFGE, Council 220, 60 FLRA 1 (2004) (AFGE, Council 220), but are summarized here for the convenience of the reader.
A. Background and Original Award
The Union grieved the Agency's alleged failure to grant priority consideration to several employees when the Agency filled several positions, claiming that the Agency failed to grant the grievants prior and separate consideration before other candidates on the well-qualified list. The Agency denied the grievance, asserting that it had provided the grievants proper priority consideration.
The Arbitrator found that the Agency violated the parties' collective bargaining agreement by failing to provide priority consideration when it failed to select several of the grievants. The Arbitrator awarded seven grievants retroactive promotions with backpay and interest. The Arbitrator, however, denied the Union's request for attorney fees.
The Arbitrator also ordered that one grievant be made whole for the money she expended on a hardship transfer. In this connection, while she was assigned to the New Bern, North Carolina office, the grievant exercised her priority consideration rights and applied for a position at the Huntsville, Alabama office (the grievance at issue here pertains to the grievant's failure to be selected for that position). After her non-selection the grievant requested and was granted a transfer from New Bern to the Agency's Birmingham, Alabama office. Because this move was made at her request, for her convenience, the Agency did not reimburse the grievant for travel or relocation expenses. While in Birmingham, the grievant was promoted to the same type of position for which she had applied, exercised her priority consideration, but not been selected in Huntsville.
B. Authority's Decision in AFGE, Council 220
The Union excepted to the Arbitrator's denial of attorney fees. The Authority found that the Arbitrator did not adequately articulate the reasons for denying the Union's request for attorney fees. More specifically, the Authority determined that the Arbitrator had not found whether the fees were: 1) warranted in the interest of justice; 2) reasonable; or 3) incurred by the employee. Because the record did not contain sufficient evidence that would permit the Authority to resolve the Union's exception, this portion of the award was remanded to the parties, absent settlement, for resubmission to the Arbitrator to clarify the reasons for the denial of attorney fees.
The Agency also excepted to the award, challenging the award of relocation expenses to the one grievant. The Authority found that the Arbitrator did not adequately specify the basis and rationale for granting this remedy. In this connection, the Authority noted that under 5 U.S.C. §§ 5724 and 5724a, the government is responsible for paying the relocation expenses of an employee who is relocated in the interest of the government but is not responsible for relocation expenses for [ v61 p583 ] employees who relocate for their own convenience. In the absence of any statement by the Arbitrator articulating the basis and rationale for awarding that remedy, the Authority could not ascertain the legality of the award. As a result, the Authority also remanded this portion of the award for resubmission to the Arbitrator to clarify the basis and rationale for this remedy.
C. Arbitrator's Award Clarification
On remand, the parties presented briefs to the Arbitrator regarding the attorney fee and relocation expenses issues. Regarding the attorney fee issue, the Arbitrator found that the grievants were the "prevailing party," that they incurred attorney fees, and that the amount of attorney fees claimed was reasonable. See 5 U.S.C. § 7701(g). The Arbitrator then examined whether the award of attorney fees was warranted in the interest of justice under the Allen factors. [n1] In this regard, the Arbitrator examined the third, fourth, and fifth Allen factors, concluded that he "did not see any actions on the part of the Agency that would be considered as a violation of the `Allen [f]actors[,]'" and found that none of the factors supported a finding that attorney fees were warranted in the interest of justice. Award Clarification at 5.
In particular, the Arbitrator found, contrary to the Union's contention, that the number of witnesses called by the Agency was not determinative of whether the Agency knew or should have known it would not prevail on the merits. Award Clarification at 4-5. The Arbitrator also found that the Agency had not committed a gross procedural error in raising a question about the arbitrability of the threshold issue. As to the Union's contention that the Agency's actions demonstrated bad faith, the Arbitrator found that the Union had provided no specific examples of purported bad faith and the Arbitrator noted that he saw no indication of bad faith on the part of the Agency. Id. at 5. Finally, the Arbitrator determined that the grievants were not prejudiced because of what the Union portrayed as a "long drawn out protracted grievance process[.]" Id. In this regard, the Arbitrator noted that his award provided backpay and interest to the grievants. Based on these factors, the Arbitrator concluded that an award of attorney fees was not warranted in the interest of justice.
As to the relocation expense reimbursement, the Arbitrator found that the Agency did not dispute the finding that an unjustified or unwarranted personnel action occurred. Award Clarification at 3. The Arbitrator found that it was clear that the grievant's relocation expenses would have been paid by the Agency but for the unjustified or unwarranted personnel action. Therefore, the Arbitrator ordered the Agency to reimburse the grievant for the relocation expenses.
III. Positions of the Parties
A. Union's Exception
The Union contends that the denial of attorney fees is contrary to the Back Pay Act, 5 U.S.C. § 5596, and to 5 U.S.C. § 7701(g). The Union notes that the Arbitrator awarded backpay to the grievants based on a violation of the parties' collective bargaining agreement and argues that the Arbitrator's award of backpay to the grievants, due to an unwarranted personnel action, is at odds with his denial of attorney fees.
The Union claims generally that the Arbitrator failed to adequately justify his conclusions that none of the Allen factors were met, and argues specifically that the grievants were "severely prejudiced" (citing the fourth Allen factor) by the Agency's actions. [n2] Union's Exceptions at 6. The Union maintains that an award of attorney fees is warranted under the interest of justice [ v61 p584 ] standard if any one of the Allen factors is met. According to the Union, the first, fourth and fifth Allen factors have been met in this case. Therefore, the Union contends that the Arbitrator should have ordered the Agency to reimburse the Union for its attorney fees.
B. Agency's Opposition
The Agency contends that arbitrators have great latitude in fashioning remedies, and that attorney fees are not warranted here. More particularly, the Agency points to the chart of Allen factors set forth in the Union's exception, and asserts as "unfounded" the Union's allegation of a prohibited personnel practice (factor 1), as well as arguing that none of the other Allen factors has been proven or argued by the Union. See Agency's Opposition at 5-6.
C. Agency's Exception
The Agency excepts only to the award of relocation expenses for the one grievant. The Agency contends that when a transfer is made primarily for the convenience or benefit of an employee, expenses for travel and moving of household goods and personal effects may not be allowed or paid from government funds, citing 5 U.S.C. § 5724(h). The Agency also asserts that travel and relocation expenses do not constitute pay, allowance or differentials. Agency's Exception at 5. In support of its argument, the Agency relies on several decisions dealing with travel and per diem, but not with relocation and moving expenses. The Agency also relies on a decision from the United States Court of Appeals for the District of Columbia Circuit, and cases cited therein, in which the court concluded that the Back Pay Act phrase "pay, allowances, or differentials" includes only payments and benefits of the sort that an employee normally earns or receives as part of the regular compensation for performing his or her job had the employee not undergone the improper personnel action. See SSA v. FLRA, 201 F.3d 465, 469 (D.C. Cir. 2000) (SSA) (citing Hurley v. United States, 624 F.2d 93, 94-95 (10th Cir. 1980); Morris v. United States, 595 F.2d 591, 594 (Ct. Cl. 1979) (Morris)).
As to the facts of this case, the Agency argues that the grievant's relocation and moving expenses to Birmingham "would never have been earned as part of her regular compensation during the period in question." Agency's Exception at 7. Therefore, relying on the courts' decisions, the Agency contends that such reimbursements are not within the scope of pay, allowance, or differentials under the Back Pay Act. Accordingly, the Agency requests that the Arbitrator's award concerning the reimbursement of the grievant's relocation expenses be set aside.
D. Union's Opposition
The Union argues that the "Agency simply refuses to acknowledge the obvious `but for' nexus in the case. In other words, but for the Agency's unwarranted personnel action, the grievant would have been paid her relocation expenses." Union's Opposition at 1. Because the Huntsville vacancy announcement stated that relocation expenses would be paid, the Union asserts that the grievant would have had her moving and relocation expenses paid had she been accorded proper priority consideration by the Agency when filling the Huntsville vacancy. See Union's Opposition, Exhibit 2. Therefore, the Union contends that the Arbitrator awarded the grievant reimbursement of moving and relocation expenses because she would have been entitled to those expenses had the Agency not violated the parties' agreement.
The Union does not dispute the Agency's contention that employees who request a transfer for their own benefit are not entitled to relocation and moving expenses. See Union's Opposition at 2. The Union argues, however, that the Agency's logic is flawed as this dispute does not concern a transfer for personal convenience, but the denial of priority consideration. Id. In this regard, the Union contends that the injury to the grievant occurred when she was not given priority consideration for the Huntsville vacancy for which she had applied and exercised her priority consideration rights. Id. Thus, the Union asserts that the grievant requested a transfer to Birmingham only after not being selected for the Huntsville vacancy. Id. As such, according to the Union, the grievant's transfer was subsequent to, and not connected to, the denial of priority consideration for the Huntsville vacancy.
IV. Analysis and Conclusions
A. The Award Concerning the Payment of Attorney Fees Is Not Contrary to Law
The Authority's role in reviewing arbitration awards depends on the nature of the exceptions raised by the appealing party. See United States Customs Serv. v. FLRA, 43 F.3d 682, 686 (D.C. Cir. 1994). In NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (NTEU Chapter 24), the Authority stated that if the arbitrator's decision is challenged, as it is here, on the ground that it is contrary to any law, rule, or regulation, the Authority will review the legal question de novo. 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. NFFE, Local 1437, [ v61 p585 ] 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
When exceptions are filed to arbitration awards resolving requests for attorney fees, the Authority's role is to ensure that the award complies with applicable statutory standards. See, e.g., United States Dep't of the Navy Headquarters, Naval Dist., Washington, D.C., 48 FLRA 1264, 1266 (1993). 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, or differentials. See United States Dep't of Def., Def. Distribution Region East, New Cumberland, Pa., 51 FLRA 155, 158 (1995).
Once such a finding is made, the Back Pay Act further requires that an award of fees must be: (1) in conjunction with an award of backpay to the grievant on correction of the personnel action; (2) reasonable and related to the personnel action; and (3) in accordance with the standards established under 5 U.S.C. § 7701(g). See id. The prerequisites for an award of attorney fees under § 7701(g) are: (1) the employee must be the prevailing party; (2) the award of fees must be warranted in the interest of justice; (3) the amount of the fees must be reasonable; and (4) the fees must have been incurred by the employee. See id.
In resolving a request for attorney fees under the Back Pay Act, arbitrators must set forth specific findings supporting their determinations on each pertinent statutory requirement. See id.; see also United States Dep't of the Treasury, IRS, Philadelphia Serv. Ctr., Philadelphia, Pa., 53 FLRA 1697, 1699 (1998).
As the parties dispute only whether attorney fees are warranted in the interest of justice, we examine only that issue. The Authority evaluates exceptions regarding whether an award of attorney fees is warranted in the interest of justice by applying the criteria established by the MSPB in Allen, 2 MSPR 420. See Laborers' Int'l Union of N. Am., Local 1376, 54 FLRA 700, 702-03 (1998). The Allen factors are set forth above at n.1. And, as also discussed at n.1, 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. An attorney fee award satisfies the "interest of justice" standard if any one of the foregoing factors is met. See Red River Army Depot, 39 FLRA at 1222.
Where the record does not permit the Authority to determine the proper resolution of the attorney fee request, we remand the award for further proceedings to assure that the resolution of a request for attorney fees is consistent with law. In cases where the record permits the appropriate resolution of the disputed matter, we address and resolve the exception, as appropriate. United States Dep't of Agric., Animal & Plant Health Inspection Serv., Plant Prot. & Quarantine, 53 FLRA 1688, 1695 (1998). Previously, the Authority remanded the case to the parties for resubmission to the Arbitrator to determine whether an award of attorney fees would be in the interest of justice.
In this case, the Arbitrator's award and award clarification and the record permit us to make the appropriate resolution of this attorney fees dispute. The disputed Allen factors are discussed below.
1. The First Allen Factor
The Union asserts that the Agency committed a prohibited personnel practice, the first Allen factor. However, the Union never identifies which of the twelve prohibited personnel practices set out at 5 U.S.C. § 2302(b) it believes took place, or explains how the Agency's actions constitute a prohibited personnel practice. Given the Union's failure to explain how the Agency's conduct amounted to a prohibited personnel practice, or to even identify which of the twelve types of prohibited personnel practices is at issue in this case, the Union's claim amounts to a bare assertion that does not support its position. See United States Dep't of the Army, Corpus Christi Army Depot, Corpus Christi, Tex., 58 FLRA 87, 91 (2002). Therefore, we conclude that the Union has not established that an award of attorney fees is warranted in the interest of justice based upon fulfillment of the first Allen factor.
2. The Third Allen Factor
The third Allen factor is that the agency's actions were taken in bad faith. The Union notes in its exceptions that it did not allege before the Arbitrator that attorney fees were warranted because the Agency's actions were taken in bad faith. Union's Exceptions at 5. The Arbitrator, however, construed certain of the Union's arguments as alleging bad faith on the part of the Agency, but found that "[n]o specific examples are cited by the Union in its charge of bad faith on the part of the Agency." Award Clarification at 5. Assuming without deciding that the issue of bad faith is before us, the Union does not dispute that it provided no specific examples to the Arbitrator regarding any bad faith on the part of the Agency, and we note that the Union has [ v61 p586 ] presented no support for a claim that the Agency acted in bad faith. Thus, we deny any such claim as a bare assertion and conclude that attorney fees are not warranted in the interest of justice based upon any bad faith by the Agency in taking these personnel actions. See, e.g., United States Dep't of Veterans Affairs Med. Ctr., Coatesville, Pa., 56 FLRA 966, 971 (2000).
3. The Fourth Allen Factor
The fourth Allen factor is that the agency committed a gross procedural error that prolonged the proceedings or severely prejudiced the employees. In order to prove that a "gross" procedural error occurred an employee must establish that the error amounts to more than simple harmful error warranting reversal of an agency action. See Olson v. United States Postal Serv., 62 MSPR 261, 265 (1994) (Olson). For example, the MSPB found that gross procedural error occurred warranting an award of attorney fees when an agency, while conducting a reduction-in-force (RIF), failed to give an employee the required specific RIF notice, did not establish required competitive areas, competitive levels, and retention lists, did not consider or honor the employee's bump and retreat rights, and did not accord him priority placement required for preference-eligible employees. See Thomas v. United States Postal Serv., 77 MSPR 502 (1998).
The Union claims it was obvious that the grievants were "severely prejudiced" by the Agency's actions and were forced to go through a "long drawn out and protracted grievance procedure" which subjected the grievants to a loss of income and future promotional opportunities. Union's Exception at 5. The Arbitrator, however, found that the grievants were not "severely prejudiced as to backpay and interest and future promotional opportunities" by the Agency's actions and denied any attorney fee award based upon this Allen factor. Award Clarification at 5.
In conducting a de novo review we note that the Union did not allege or argue any particular procedural error, "gross" or otherwise, on the Agency's part, in taking these personnel actions: the only arguments asserted addressed a prolongment of the grievance process and severe prejudice to the grievants' income and future promotional opportunities. A party has no entitlement to attorney fees under this factor absent a showing of gross procedural error. See Olson, 62 MSPR at 265. Consequently, the Union has not established that attorney fees are warranted in the interest of justice because the Agency committed a gross procedural error.
4. The Fifth Allen Factor
The fifth Allen factor is whether the Agency knew or should have known it would not prevail on the merits with respect to its decision not to provide the grievants their priority consideration rights. Whether fees are warranted under this factor requires evaluation of the nature and weight of the agency's evidence. See NTEU, Chapter 50, 54 FLRA 250, 254 (1998) (NTEU, Chapter 50). The knew-or-should-have-known factor essentially requires an arbitrator to determine the reasonableness of an agency's actions and positions in light of what information was available to it at the time it makes its decision to take the personnel action involved. Id. (citing Mullins-Howard v. OPM, 71 MSPR 619, 626 (1996)). That assessment is primarily factual, because the arbitrator evaluates the evidence and the agency's handling of the evidence. See NTEU, Chapter 50, 54 FLRA at 254.
To substantiate its contention that the Agency should have known that it would not prevail on the merits, the Union relies on the number of witnesses it called versus those called by the Agency. See Union's Exception at 5. According to the Union, it called expert witnesses and four factual witnesses to testify before the Arbitrator, while the Agency only called two witnesses. However, the Arbitrator concluded that it was "speculation to assume that the number and type of witnesses called show that the Agency knew it would not prevail on the merits." See Award Clarification at 4-5.
In conducting a de novo review of this claim, we conclude that the number of witnesses called by the Agency at the hearing on the merits of the personnel action, by itself does not establish that the Agency knew, at the time it took the personnel action, that it would not prevail on the merits of the case. See, e.g., Health Care Fin. Admin., 26 FLRA 860, 863 (1987) (agency failed to substantiate in what way the testimony of scheduled witnesses could have changed the facts). See also Lofton v. Dep't of Health & Human Servs., Soc. Sec. Admin., 12 MSPR 91 (1982) (witnesses would have no knowledge of appellant's performance); Christensen v. Dep't of Health & Human Servs., 11 MSPR 209 (1982) (number of supervisory scientists sought as witnesses would have no knowledge of reduction-in-force procedures). In particular, the Union has not shown how the number of witnesses called at a hearing subsequent to an action is an indication of what the Agency knew or should have known at the time of the action. Accordingly, we conclude that the Union has not established that attorney fees are warranted in the interest of justice because the Agency knew at the time it took these personnel actions that it would not prevail. [ v61 p587 ]
For the above stated reasons, the Union has failed to establish that the Arbitrator erred in refusing to award attorney fees. Accordingly, we deny the Union's exception.
B. The Award Is Contrary to Law Because It Improperly Orders the Reimbursement of an Employee's Relocation Expenses
In AFGE, Council 220, the Authority remanded this portion of the award to the parties, absent settlement, for resubmission to the Arbitrator on the ground that the award failed to articulate the basis and rationale for awarding the grievant relocation expenses. In the clarification award, the Arbitrator states that the Agency does not dispute the finding that an unjustified or unwarranted personnel action occurred. Award Clarification at 3. In this connection, the Arbitrator concluded that had the Agency not violated the parties' agreement and failed to accord the grievant her priority consideration, she would have been selected for the Huntsville vacancy and her moving and relocation expenses to Huntsville would have been paid by the Agency. Accordingly, the Arbitrator ruled that the Agency should reimburse the grievant for her moving and relocation expenses to Birmingham. See Award Clarification at 3.
As the Agency contends that this portion of the Arbitrator's award is contrary to law, we apply a standard of de novo review, as set forth above.
The Arbitrator's award provides the grievant reimbursement for her moving and relocation expenses to Birmingham. However, the moving and relocation expenses the grievant experienced when moving from New Bern to Birmingham (as opposed to from New Bern to Huntsville) are not expenses the grievant would have been reimbursed had the Agency not violated the parties' agreement. As noted in the precedent argued by the Agency, an agency's liability for "pay, allowances, and differentials" under the Back Pay Act extends only to those amounts and benefits the employee normally would have earned "if the adverse personnel action had not occurred." SSA, 201 F.3d at 469.
Here, it cannot be said that the grievant would have been reimbursed for the expenses involved in her relocation from New Bern to Birmingham "if the adverse personnel action had not occurred." Id.; see also Morris, 595 F.2d at 594. In Morris, for example, the plaintiff was subjected to an unwarranted and unjustified personnel action when he was improperly demoted and reassigned to a new location as the result of a reduction-in-force (RIF). When the plaintiff prevailed in his RIF appeal he filed a claim for per diem at the location he had been improperly reassigned to, and for commuting expenses on the weekend between that location and his former one, where his family still lived. In denying his claims, the court noted "although plaintiff's expenses may be a consequence of his erroneous transfer, they are not allowances that he would have received had he not undergone the improper personnel action." Id. The same outcome is warranted in the present case, as it cannot be said that the grievant would have been reimbursed for her move from New Bern to Birmingham had she not undergone the improper personnel action. As a result, the Arbitrator's award of the grievant's relocation expenses from New Bern to Birmingham conflicts with the Back Pay Act.
Accordingly, we grant the Agency's exception and set aside that portion of the award requiring the Agency to reimburse the grievant for her expenses for her move from New Bern to Birmingham.
We deny the Union's exception regarding attorney fees. We grant the Agency's exception and set aside that portion of the award ordering the Agency to pay one grievant's moving and relocation expenses from New Bern to Birmingham.
Footnote # 1 for 61 FLRA No. 112 - Authority's Decision
See Allen v. United States Postal Serv., 2 MSPR 420 (1980) (Allen). 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) (Red River Army Depot) (citing Naval Air Dev. Ctr., Dep't of the Navy, 21 FLRA 131, 139 (1986)).
Footnote # 2 for 61 FLRA No. 112 - Authority's Decision
The Union argues that it addressed the second Allen factor in its remand submission to the Arbitrator regarding the fifth Allen factor. See Union's Exception, Exhibit B at 6. However, the Union's argument cited to focuses only on what the Agency should have known when it took the action (the fifth Allen factor) and does not focus on the result of the challenge to the personnel action (the second Allen factor). See, e.g., United States Army Headquarters, XVIII Airborne Corps, Fort Bragg, N.C., 35 FLRA 390, 394 (1990) (discussing the difference between the second and fifth Allen factors). Therefore, we do not address the second Allen factor as it was not raised by the Union. Additionally, the Union attempts to argue that it also raised the "service to the Federal workforce/benefit to the public" Allen factor in its remand submission. However, that argument is also not addressed in the submission as alleged, either at page 6 or at page 4, where the language referred to addresses the Union's "prevailing party" status. Therefore, we do not address it as well.