ARBITRATORS, WAVE GOOD-BYE TO LAFFEY

One of the great things an arbitrator can do for a union is award it Laffey Matrix attorney fees for winning a case.  That can mean up to $894.00 for each hour the union attorney put in on the case as opposed to the $75.00 an hour the union actually paid her in salary. In comparison, even the best labor arbitrators only get about $300 an hour for their work. But it now appears that the Laffey Matrix’s application to D.C. area, federal sector arbitrations is coming an end.  That is not just due to the anti-union bile oozing from the Trump FLRA appointees who have proclaimed they are itching to end the use of the Matrix. An actual intellectual and honorable neutral, the polar converse of judges being thinly-veiled political party operatives also has served notice on the Matrix in a recent D.C Circuit court decision. So, this posting primarily is to notify any arbitrator who is thinking of awarding Laffey Matrix fees in an arbitration that his/her award is likely going to be overturned.  Moreover, while FLRA might remand the case for the arbitrator to reconsider the fee issue, it might also just vacate and toss the case into the dust bin never to be reopened again. Our second goal here is to review the obvious options arbitrators have.

We will skip over why a federal circuit court held that Laffey Matrix almost never applies to disputes outside of federal courts and refer you to our recent posting for a review of the holding. It is entitled, “Another Sinkhole Opens Under the Laffey Matrix.” That Circuit Court Panel was chaired by Chief Judge Merrick Garland, an Obama Supreme Court nominee—hardly one of the evolution-denying, woman abusing, bible-thumping, closet racial separatist currently getting those appointments. From our perspective, Garland’s decision leaves arbitrators four options.

First, they can focus on the USAO Matrix.  It was developed by the DOJ US Attorneys drawing on a far, far larger sample of attorneys from a much larger geographic area than the Laffey Matrix. As a result, it suggest hourly fee rates that are hundreds of dollars less an hour than Laffey, e.g. its top rate is about $300 less an hour than the Laffey rate.

A second option would be to use one of the fee surveys circulating.  For example, LexisNexis found that the average national hourly fee for an employment/labor associate attorney is a little over $300.00 an hour. LawCrossing found that the average annual salary of a labor/employment lawyer in DC is $157,000.00, which is about $75.00 an hour of only salary, not benefits and money for the firm.

A third option, and on its face the most powerful, is to use the arbitrator’s own effective hourly fee as the best evidence of what attorneys charge to work on the kind of case before him or her.  After all, most arbitrators are not just attorneys, but they also perform their legal service in the same geographic location (indeed the same room) as the union attorney and on the same kind of case (indeed the identical kind of case). It would not be a stretch to say that the arbitrator’s fee is the best evidence of a representative rate. In fact, it often will be higher than the rate owed a typical union attorney given that most arbitrators have been practicing fare longer than most union attorneys.

We took a look at the average daily fee of the eight arbitrators who dominate the federal sector market in the Washington, DC metro area and found it to be about $2,000.00 a day.  Assuming an 8-hour day, that is $250.00 an hour.  A more realistic six-hour day assumption suggests an average hourly rate of $333.00.  That is very close to the LexisNexis figure as well as the USAO matrix for an attorney with less than eight years of practice.

The fourth option is a messy one.  The arbitrator can take evidence on the fee charged by “similarly situated” attorneys practicing in a “similarly situated” geographic location on a “similar” kind of case as the one before him or her. Given the two Trump FLRA appointees have declared that they have no reluctance second guessing arbitrators on the facts, this carries a high risk of reversal. Moreover, while the union might have affidavits ready to submit from these other attorneys, the agency has the right to cross examine those other attorneys and look at the documents substantiating their claims.

Maybe the best option is for the arbitrator to advise the parties to work real hard on why s/he should not go with a figure drawn from the first three benchmarks reviewed above.  Even better, the parties should take this out of the arbitrator’s and FLRA’s hands by signing a long-term MOU on hourly rates.

Finally, no one should assume that because there are FLRA and MSPB cases out there that appear to base the hourly rate solely on the existence of the Laffey Matrix that this pressure on the Matrix is a fleeting thing.  Both MSPB and the FLRA have cases on the record stating that the Matrix is not enough to substantiate a finding as to the appropriate hourly rate, e.g.,

  • MSPB has ruled, “The Board has never found that the Laffey Matrix, by itself, supports a finding that a specific hourly rate claimed is reasonable.””(Simmons v. DHUD, MSPB, (09/17/14)
  • The FLRA has similarly placed a burden on the arbitrator to issue a “reasoned decision” based on facts, not just the existence of the Laffey Matrix. (70 FLRA 195 (2017))

Our guess is that The Trumpites will reverse attorney fee decision based solely on the Laffy Matrix.

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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