ATTORNEY FEE TURMOIL AHEAD?

In NAGE and DOD, DLA, 69 FLRA 572 (2016) the Authority signaled that it is willing to reconsider the criteria for approving employee attorney fee petitions. Given the pre-disposition of the two Trump appointees, Kiko and Abbott, unions and the private bar would be wise to think, plan and coordinate ahead about the possible directions these two could go in adjusting how fees are set.  Nor should they ignore the fact that the current FSIP is likely to be very, very receptive to agency bargaining demands for language that limit attorney fee recoveries.  So, now is as good a time as any to speculate on how this might play out.

Admittedly, FLRA is not totally free to change how fees are awarded.  OPM sets the regulatory criteria for awarding attorney fees and it has ceded much of the power for setting case law precedent to MSPB, not FLRA. Nonetheless, FLRA has considerable wiggle room, especially when you consider that unless the grievance involves a ULP its decision is not reviewable in court.

First, it could do what the MSPB did in cases such as Silberman v. Dept. of Labor, CH-0752-09-0322-B-1 (2014) where it second-guesses the arbitrator or ALJ on the appropriate hourly rate, the number of hours charged, the sufficiency of evidence provided by the attorney, the accuracy and timing of the attorney’s records, etc. This would seem to be exactly what these two Trump appointees have in mind when they recently demanded that arbitrator awards be reasonable and proportional related to the infraction. (AFGE, 70 FLRA 398 (2017))  FLRA has the power to consider these arguments sua sponte if agencies do not make them in their exception briefs.

 Second, the Trump appointees could also use the current considerably vague “interest of justice” criteria to void any entitlement to fees.  Who could not rule that an arbitrator’s decision failed against the following regulation defining the interest of justice?

1) whether a prohibited personnel practice was committed; 2) whether the agency’s action was clearly without merit or totally unfounded, or whether the employee was substantially innocent of charges; 3) whether the agency acted in bad faith; 4) whether the agency committed gross procedural error that prejudiced the employee; and 5) whether the agency knew or should have known it could not prevail on the merits.

Remember, in most cases the FLRA’s decision that the agency’s action was not “clearly without merit or totally unfounded” is not subject to appeal.

Third, if FLRA does try to craft an “interest of justice” standard designed for the typical collective bargaining grievance–as opposed to the MSPB’s adverse action oriented definition, potential considerations could include whether the grievance could have been resolved earlier, without arbitration, if the union representative had presented a better case during the grievance stages.  For example, did the union rep delay filing a critical particularized need information demand until after the case was invoked for arbitration, did the rep fail to phrase the grievance specifically so that it could be reasonably investigated by the agency during the grievance stage, did s/he make such aggressive remedy demands as to make it all but impossible for the agency to settle, etc. In adverse action cases before MSPB the remedy is pretty much limited to reappointment, back pay and attorney fees.  By comparison, collective bargaining grievances allow unions to request non-traditional remedy demands that can make it near impossible for an agency to settle, e.g., apologies, discipline of the managers, etc.

Fourth, FLRA could attack the use of the Laffey matrix as not appropriate in a collective bargaining case.   The Matrix permits attorneys to charge hundreds of dollars more an hour for their work than their employers, whether they be unions or law firms, pay the employees. Unions can use that money to free up other funds for projects that otherwise could not be covered by dues withholding.  (There is also an argument that the Matrix rewards unions for conducting hearings in the Washington, DC metro area where Laffey applies.)

It would not be hard for the authority to structure an argument that the collective bargaining arena is different from other cases because arbitrations over contract provisions, regulations or personnel statutory provisions are almost always conducted by union salaried attorneys, making them a unique legal market for comparison purposes.  Consequently, their actual salaries must be considered in calculating the market rate for cases even if they are simply averaged with the fees typically charged by area private firms. And do not be surprised if the Authority also mentions that these cases can (and at times are) done by non-attorneys, which suggests that the market rate for representation is much lower in collective bargaining cases than others.

Similarly, the market rate could also take into consideration the hourly fee of the arbitrator handling the case.  Expect someone to argue that when the attorneys for both sides pick an expert, generally another attorney, to arbitrate their case, the hourly rate of their chosen expert should also be considered in setting the attorneys’ hourly rate. A reasonable argument for resisting this kind of legal rollback will be that arbitration decisions involving EEO, PPP, FLSA, and adverse action matters, each with its own independent statutory entitlement to fees, must be treated differently than simple contract, regulatory, and statutory interpretation grievances.  The former cases attract a more highly paid market of private attorneys when processed through EEOC or MSPB, and therefore Laffey is more appropriate there.

Finally, look for FLRA to note another significant difference between using private attorneys and salaried union ones.  Private attorneys generally have clients sign retainer agreements that call for one hourly rate should they win the case and a lower rate if they lose. MSPB has used these lower rates to reduce attorney demands.  Union attorneys’ retainer agreements rarely specify lower rates because they are not operating in the same economic market as private attorneys. The courts have not accepted this idea, but that does not mean FLRA will agree with the court where collective bargaining is involved.

Fifth, there is also an argument that when cases go on for years through multiple hearings and decisions, where all the parties are doing is including a new group of grievants in the same initial grievance claim, that the fees for the subsequent litigation should be minimized. (See DOJ, Terminal Island and AFGE, 68 FLRA 537 (2016)) One argument for that is the potential for a conflict of interest when an arbitrator retains jurisdiction for years, through multiple hearings, and rewards the union attorney with fees for each hearing s/he brings the arbitrator.

Sixth, Kiko and Abbott might support the negotiability of agency demands that limit fees, e.g., in no case shall any attorney or other representative be awarded an hourly rate fee of more than $200.00 nor more than two days of non-hearing days for every day of hearing; time spent traveling will not is not eligible for attorney fees; hourly rate determinations must proportionately weigh the hourly rate of union’s salaried attorneys, non-attorney doing arbitrations, and the arbitrator with comparable private attorneys; fee entitlement will be reduced when less than all requested remedies are achieved; etc.

Fedsmill has previously warned unions and attorneys about letting a handful of colleagues abuse the access to fees. The best we can hope for now is that IF THERE MUST BE A CHANGE this issue will be well argued before the FLRA and Panel so that sound, bias-free decisions are made.

About AdminUN

FEDSMILL staff has over 40 years of federal sector labor relations experience on the union as well as management side of the table and even some time as a neutral.
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