SHOULD FLRA REWRITE ATTORNEY FEE CASE LAW?

While abuses are not rampant, they are there. One lawyer will charge five times what another does to win the same kind of case. Hourly fees are based on seniority rather than the level of skill needed to do the work. Bills are padded easily by adding several time-consuming arguments to a case that needs only one. Arbitrators order back pay in group-wide grievances for all work—even the work done on behalf of those grievants who did not get back pay. Unions are allowed to keep secret from members and the public how they spend their attorney fee profits, which makes them all potential slush funds. We said it before and we will say it again, a few greedy attorneys are going to kill this goose that lays golden eggs for federal employee. But is it FLRA’s role to correct the situation?

FLRA just sent out a call for amicus briefs from any interested person in the world to help it decide an attorney fee dispute.  Because the case issues are simply answered, we suspect that Abbott and Kiko are pretending this is an emergency so that they can build a wall that unions can almost never clear to get attorney fees. (Where have we heard that before?)

Attorney fees are already a highly restricted right by law and regulation. Title 5 USC 5596 and 7701 impose 5 criteria that must be met to get fees, i.e.,

1. A judgement from an appropriate authority
2. An unjustified and unwarranted personnel action
3. A withdrawal or reduction of pay, allowances, or differentials,
4. A party that prevailed over the government,
5. A payment warranted by an interest of justice

OPM restates those criteria in its regulations, and MSPB has imposed at least five more hurdles that must be cleared when arguing that a fee request meets the interest of justice criterion.  They are known as the Allen Factors and are as follows:

1) whether the agency engaged in a prohibited personnel practice;

2) whether the agency’s action was clearly without merit or wholly unfounded, or the employee is substantially innocent of the charges;

3) whether the agency initiated the action in bad faith;

4) whether the agency committed a gross procedural error that prolonged the proceeding or severely prejudiced the employee; or

5) whether the agency knew or should have known that it would not prevail on the merits when it brought the proceeding.

Finally, the courts, including the Supreme Court, have weighed in with their thoughts no less than 100 times.  That should leave Kiko and Abbott very little room to create new criteria out of thin air as they so often have. But that does not mean unions are safe or that agency concerns need be ignored.

The Authority can always apply a strict interpretation of the existing case law criteria.  For example,

• the Board’s “clearly without merit” criterion (Allen Factor #2) does not mean fees are justified whenever the union wins a case. A win means that the agency’s position was without merit, but the Allen Factor requires it be clearly without merit;
• “substantially innocent” does not mean merely innocent. One is innocent of an adverse action suspension charge if the agency fails to produce the preponderance of the evidence, but is s/he substantially innocent if the arbitrator merely reduces the penalty, reverses due to harmful error, or considers it a close call on the evidence;
• the Board has said that “gross procedural error” prolongs the proceeding or severely prejudices the employee, and it amounts to more than harmful error. Given that harmful error can overturn a disciplinary action, the employee would need more than a win to earn fees;
• attorney’s fees under the “knew or should have known standard” require proof that the agency never possessed any credible, probative evidence to support the action taken according to MSPB; and
• the Board has established that the amount of fees should not be based on the Laffey Matrix alone, as far too many arbitrators are doing today. See “Remember, Laffey Is Not Enough.”

Although the case FLRA is using to call around the galaxy for comments is not broad enough to get to these issues, the Authority could let the following be known through future cases:

• the Laffey Matrix is a weak benchmark for collective bargaining grievance-arbitration work because Laffey contemplates work done against DOJ attorneys in far more complex matters than an alleged incorrect performance appraisal or leave denial. FLRA could suggest that the arbitrator’s hourly fee (and total hours charged) is a much better benchmark for the market rate for grievance-arbitration work.
• that basing fees on a seniority or years of practice consideration is not consistent with the statute’s requirement for the “efficient accomplishment of government operations.”
• arbitration decisions awarding fees must address every criterion in statute and case law.
• billing records must have a high level of detail on the work one does during the charged time.
• time is not compensable in group grievance for work done on behalf of those who were not ultimately entitled to back pay.

But by far the most beneficial thing the Authority can do in the current case is to jump start negotiations between the parties on fees.  It should affirm that the questions around what are “reasonable attorney fees” (5 USC 5596) are just as negotiable as what are “reasonable” amounts of official time. (5 USC 7131) There are probably two dozen ways to abuse a claim for fees and the Authority will never get to all of them.  But the parties can.  Agencies are in a very good position at collective bargaining tables to place restrictions on fees given that the union is typically asking for several other financial subsidies, e.g., official time, office space, travel and per diem, supplies and equipment, etc. Our bet is that unions will be only too happy to accept reasonable limits on their right to attorney fees in return for other subsidies.