AGENCY OPTIONS WHEN UNION LAWYERS LIE

This is a hypothetical; any connection to facts you may know of is purely coincidental. We have a great deal of respect for most union leaders and generally wish them the best.  But every once in a while an unethical one slips through and behaves in a way that hurts employees and damages the image of all unions. Management can ignore them or they can act.  We are rooting for them to act and want to outline how they might do it.

Suppose a salaried union attorney wins a back pay case entitling her to attorney fees.  As part of her request for full market rate fees, e.g., $500.00 an hour for 1,000 hours of work, she informed the arbitrator that she must refund to the union its hourly cost of employing her for those 1,000 hours, but she can keep the rest.  When the arbitrator asked how much the union’s hourly salary and benefit costs were to employ her, she said $100.00. Based on that statement, the arbitrator ordered the agency to pay the full $500.00 per hour she requested or $500,000.00 in total fees.

Now suppose the attorney’s statement was not true and that she never repaid the union a dime for her salary and benefit costs for that case or ten others she won for a total of $5 million dollars in fees.   Maybe that was a lie from the beginning, maybe the attorney  just forgot to write the union a check for $100,000.00, or maybe the union changed its mind and decided to let her keep the entire fee.  It does not matter.  The impact on several stakeholders is the same, namely,

• The union members do not get the $100,000.00 reimbursed to their treasury that they were entitled to,
• The agency probably had to pay $100.00 an hour in fees more than it would have if the union attorney had admitted she already was paid $100.00 an hour for hers work, e.g., the arbitrator likely would have ordered an hourly rate of only $400.00 for a $100,000.00 savings for the agency, and
• The arbitrator’s final and binding decision in the matter of a federal arbitration case was based on a false statement—from an attorney no less.

As we said, the agency can ignore the situation and move on. But, it seems that would be wrong if it discovered that the union attorney’s statement was false.  It is not hard to track these things.  An agency need only check the union’s on-line  LM and 990 reports to see if the union received and reported a reimbursement from the attorney.  For purposes of this hypothetical, let’s assume the agency checks the reports and verifies that the attorney never reimbursed the union for this case or any of the others.  Here is what it can do to the attorney and union if they leave themselves so exposed.

First, it can contact the President and General Counsel of the union that employs the attorney, call the facts to their attention, and ask for an explanation.   If the union leaders are honorable—and the vast majority are, they will admit the mistake, immediately collect the reimbursement from the attorney, and send the agency a check for the $100,000.00 overpayment of fees for this case and any other—plus interest.  If the union resists correcting the error, it opens the door to lots of agency options that are far worse than writing the agency a big check.

Second, the agency could file a grievance against the union to get its money back and other sanctions.

Third, the agency could notify all officers of the union of the facts, not just the president and GC who might be “overlooking” the attorney’s decision not to reimburse the union. That might result in internal charges against the union president for a failure to fulfill his/her statutory fiduciary duty.

Fourth, the agency can notify the Department of Labor of the union’s failure to fulfill its fiduciary duty and trigger an investigation that could result in federal charges against the union. The penalties include removal from office, fines, and worse.

Fifth, the agency can notify the attorney’s bar association that she has made false statements in the matter of official federal litigation that produced a benefit for her.  This is the real club because the attorney can be disbarred for doing so.

We are not going into potential criminal penalties for the attorney because it is outside our expertise, but we doubt that the law prohibiting false statements in connection with federal business has an exception solely for union attorneys.

Agency leaders, including ER/LR staff, who deal with attorneys who claim they reimburse the employing union, can probably ignore this or similar unethical and/or illegal activity by a union attorney.  No one audits agency LR staff for things like this.  However, like union leaders, they also have a fiduciary responsibility, e.g., OGE regulations impose on them, “An affirmative duty to protect and conserve Government property and to use Government property only for authorized purposes.”

Here is hoping that agencies get involved. Illegal, unethical and/or irresponsible behavior is no more acceptable from union leaders than it from agency ones.