American Federation of Government Employees and United States Department of Health and Human Services, Social Security Administration, Baltimore, Maryland (Authority decision, July 22, 1994)

Final FLRA decision. This Authority order modifies an arbitration award and ends the exceptions proceeding. Under 5 U.S.C. § 7123(a)(1), an order involving an arbitral award is generally excluded from judicial review unless it involves an unfair labor practice under 5 U.S.C. § 7116. This decision concerns fees and costs in a pay dispute and does not decide an unfair labor practice.

Plain-English summary

An arbitrator had awarded AFGE attorney fees and costs after earlier rulings on Social Security Administration employees' overtime pay. The agency challenged one attorney's fee, another attorney's lodging and food expenses during hearings, and expert witness fees. The Authority upheld the attorney fee and travel costs because the work was performed for employees and the agency had not shown the hearing expenses were unreasonable. It found that neither the Back Pay Act nor the Fair Labor Standards Act authorized the expert witness fees awarded here. It set aside that part of the award and denied the agency's other exceptions.

Decision snapshot

• Authority: Back Pay Act, 5 U.S.C. § 5596; Fair Labor Standards Act, 29 U.S.C. § 216(b); arbitration exceptions under 5 U.S.C. § 7122(a).
• Outcome: Expert witness fee awards set aside; attorney fees and challenged travel costs remain.
• Key point: The governing pay statutes did not authorize the expert witness fees in this award.

Full text (FLRA public release)

[ v49 p1666 ]
49:1666(153)AR

The decision of the Authority follows:

49 FLRA No. 153

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,
AFL-CIO

(Union)

and

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SOCIAL SECURITY ADMINISTRATION

BALTIMORE, MARYLAND

(Agency)

0-AR-2592

_____

DECISION

July 22, 1994

_____

Before Chairman McKee and Members Talkin and
Armendariz.

I. Statement of the Case

This matter is before the Authority on exceptions to an award of Arbitrator Henry L. Segal filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Union filed an opposition to the Agency's exceptions.(1)

For the following reasons, we conclude that the portion of the Arbitrator's award encompassing expert witness fees is deficient and must be set aside. We will deny the Agency's remaining exceptions.

II. Background and Arbitrator's Award

In previous decisions, the Authority denied exceptions to three separate awards of Arbitrator Segal which granted back pay and, in some circumstances, liquidated damages to certain bargaining unit employees who, according to the Arbitrator, had been improperly designated as exempt from coverage under the Fair Labor Standards Act (FLSA).(2)

In a supplemental award, the Arbitrator granted the Union's request for attorney fees and costs and awarded two Union attorneys, Joe Goldberg and Judith Galat, $285,454.10 in fees and $20,616.87 in costs.(3) With respect to costs, the Arbitrator directed the Agency to reimburse the Union for food and lodging expenses incurred by Goldberg, who resides in the Washington, D.C. area, during the arbitration hearing held in Baltimore, Maryland. In so doing, the Arbitrator rejected the Agency's contention that such expenses were not proper under Agency travel regulations because they resulted from "local travel" in a "single metropolitan area." Award at 20. In this connection, the Arbitrator found that Goldberg was not an Agency employee and, thus, was not subject to Agency travel rules. Moreover, the Arbitrator stated that travel expenses which are not "'unnecessarily luxurious'" are reimbursable. Id. at 19 (citing Crumbaker v. MSPB, 781 F.2d 191, 194 (Fed. Cir. 1986)). The Arbitrator found that lodging expenses are not "luxur[ious] . . . where adequate representation by an attorney usually requires preparation at night for the next day of hearing[,]" and that it would have been "unduly burdensome[]" for Goldberg to commute between Washington and Baltimore during the hearings. Award at 20.

The Arbitrator also awarded attorney Irving Becker $10,896.50 in fees and $842.15 in costs in connection with litigation involving the FLSA status of a particular Agency job (position no. OC-449). The Arbitrator found that Becker was the Union's designated representative in the litigation and that a separate award of fees for Becker satisfied the requirements of both the Back Pay Act and the FLSA. The Arbitrator rejected the Agency's contention that an award of fees to Mr. Becker would be "'duplicative [of] fees claimed by the Union.'" Id. at 26. According to the Arbitrator, no duplication would result because the Union did not request any fees in connection with the OC-449 litigation.

Finally, the Arbitrator granted the Union's and Becker's requests for expert witness fees. Although the Arbitrator acknowledged that he was "plowing new ground . . . with respect to reimbursement for expert witness fees[,]" he found that he had the authority to award such fees as costs under both the Back Pay Act and the FLSA. Id. at 24. In this connection, the Arbitrator found that 5 U.S.C. § 5596(b)(1)(A)(ii) "provides a specific waiver of sovereign immunity for attorney's fees and costs by providing for reasonable attorney fees relating to . . . 'a grievance processed under a procedure negotiated in accordance with Chapter 71 of this title . . .'" Id. The Arbitrator also found that "[b]y incorporating Federal employees in the FLSA
. . . the Federal government has waived its Federal immunity [under] . . . 29 U.S.C. § 216(b) [of] the FLSA [which] provides for attorney's fees and costs of prevailing plaintiffs." Id. at 23 (emphasis in original).

The Arbitrator rejected the Agency's claim that the fact that the Back Pay Act does not specifically provide for the payment of expert witness fees renders them not recoverable. In addition, the Arbitrator found that the Agency's reliance on West Virginia University Hospitals, Inc. v. Casey, 499 U.S. 83 (1991) (Casey), was misplaced because, according to the Arbitrator, that decision addressed "limitations on expert witness fees applicable only to litigation in the Federal [c]ourts . . . [and not] arbitration proceedings." Award at 23. Accordingly, the Arbitrator awarded the Union and Becker $16,610.54 and $842.15, respectively, in expert witness fees.

III. First Exception

A. Positions of the Parties

The Agency contends that attorney Becker is not entitled to an award of attorney fees. The Agency argues, in this regard, that the Union did not "'incur' fees incident to Mr. Becker's work . . . ." Exceptions at 4. According to the Agency, any fees attributable to Becker are "Union overhead costs and nothing more." Id. at 5.

The Union asserts that the Agency's exception does not provide a basis for finding the award deficient.

B. Analysis and Conclusions

As relevant here, attorney fees may be awarded under the Back Pay Act when the award is: (1) in conjunction with an award of backpay to the grievant on correction of an unjustified or unwarranted 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). U.S. Patent and Trademark Office and Patent Office Professional Association, 32 FLRA 375, 378 (1988). The prerequisites for an award of attorney fees under section 7701(g)(1) 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. American Federation of Government Employees, Local 12 and U.S. Department of Labor, Washington, D.C., 38 FLRA 1240, 1248 (1990). Fees are incurred, within the meaning of section 7701(g)(1), when an attorney-client relationship exists and the attorney has rendered legal services on behalf of the employee. See U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 48 FLRA 1040, 1047 (1993)(DHHS); Naval Air Development Center, Department of the Navy and American Federation of Government Employees, Local 1928, AFL-CIO, 21 FLRA 131, 136 (1986).

The Agency excepts to the award of attorney fees in connection with Becker's services on the basis that, according to the Agency, the Union did not incur fees with regard to his work. However, the Arbitrator found that Becker was a licensed attorney who had been designated by the Union and who "did work for the Union." Award at 26. The Arbitrator further found that Becker was the "sole attorney" for the Union with respect to the OC-449 claim, that Becker's records indicated that he spent time "conferring with the Union, preparing witnesses," and writing the portion of the Union's brief dealing with the OC-449 claim. Id. at 26, 27. The Arbitrator concluded that Becker's fee "was incurred for the services of an attorney on behalf of employees of
[the Agency]." Id. at 27. We conclude that the record demonstrates that an attorney-client relationship existed between the Union and Becker and that the services rendered by Becker for the Union were on behalf of the grievants. Thus, we conclude further that Becker's fees were incurred by the employees within the meaning of section 7701(g)(1). See DHHS, 48 FLRA at 1047-48. Accordingly, we will deny the Agency's exception.

IV. Second Exception

A. Positions of the Parties

The Agency contends that the Arbitrator erred in directing the Agency to reimburse the Union for Goldberg's food and lodging expenses. The Agency claims that Goldberg is "not entitled to meals and lodging simply because he decided to spend the night rather than return [to Washington] each day after the hearing." Exceptions at 4.

The Union asserts that the Agency's exception does not provide a basis for finding the award deficient.

B. Analysis and Conclusions

We do not construe the exception as an assertion that travel costs are never recoverable under the Back Pay Act. Rather, we construe the exception as an assertion that, in this case, Goldberg's expenses are not recoverable because they were not reasonable.

The Arbitrator found, among other things, it would have been "unduly burdensome" to require Goldberg to commute between Washington and Baltimore during the arbitration hearings. Award at 20. Moreover, according to the Arbitrator, if the Union had been awarded fees for Goldberg's travel time to and from the hearing sight rather than for hotel and per diem expenses, then the cost to the Agency would have been greater. The Agency has not provided any authority for its argument that Goldberg's expenses were unreasonable or, for any other reason, are not recoverable. Accordingly, we find that the Agency's exception constitutes mere disagreement with the Arbitrator's award and does not demonstrate that the award is deficient. See U.S. Department of Defense, Defense Mapping Agency, Hydrographic/Topographic Center, Washington, D.C. and American Federation of Government Employees, Local 3407, 47 FLRA 1187, 1200 (1993).

V. Third Exception

A. Positions of the Parties

The Agency contends that the Arbitrator erred in awarding expert witness fees because, according to the Agency, such fees are not expressly provided for in either the Back Pay Act or the FLSA. The Agency claims that the award is inconsistent with the Supreme Court's decision in Casey, which, according to the Agency, holds that expert witness fees may not be awarded unless they are expressly authorized by statute.

The Union claims that the Agency's argument constitutes mere disagreement with the Arbitrator's award and does not provide a basis for finding the award deficient.

B. Analysis and Conclusions

The Authority has held that expert witness fees are not recoverable under the Back Pay Act. See National Gallery of Art and American Federation of Government Employees, Local 1831, 39 FLRA 226, 236-37 (1991). The Authority's decisions on this subject are consistent with those of the Merit Systems Protection Board (MSPB) and the U.S. Court of Appeals for the Federal Circuit. See, for example, Bennett v. Department of the Navy, 699 F.2d 1140, 1145 (Fed. Cir. 1983); Fishback v. United States Postal Service, 54 M.S.P.R. 257 (1992). Similarly, the FLSA has been interpreted as precluding the payment of expert witness fees. See Gray v. Phillips Petroleum Company, 971 F.2d 591, 594-95 (10th Cir. 1992); Glenn v. General Motors Corporation, 841 F.2d 1567, 1575 (11th Cir.), cert. denied, 488 U.S. 948 (1988); Houghton v. Sipco, Inc., 828 F.Supp 631, 650 (S.D. Iowa 1993). Compare Sterling Federal Systems, Inc. v. Goldin, 16 F.3d 1177 (Fed. Cir. 1994) (General Service Administration Board of Contract Appeals did not err in awarding expert witness fees in connection with procurement protests under the Competition in Contracting Act, 40 U.S.C. § 759(f)(5)(C)).

The record before us provides no basis for concluding that the foregoing precedent under the Back Pay Act and the FLSA(4) is contrary to law or that, on any other basis, expert witness fees are recoverable under either of those statutes. Accordingly, consistent with that precedent, we find that expert witness fees are not recoverable under the Back Pay Act or the FLSA and that the portion of the award granting such fees is deficient as contrary to law. As such, that portion of the award will be set aside.

VI. Decision

The portion of the award granting expert witness fees is set aside, and the remaining Agency exceptions are denied.

FOOTNOTES:
(If blank, the decision does not
have footnotes.)

1. The Union also filed a supplemental
   submission. However, as the Authority's Rules and Regulations do not provide for the filing of such submissions, and as no basis for accepting the submission has been asserted or is apparent, we have not considered it.

2. U.S. Department of Health and
   Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 44 FLRA 773 (1992); U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 47 FLRA 819 (1993); and U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 49 FLRA 483 (1994).

3. As the Agency does not dispute that
   the Union is entitled to attorney fees with respect to Goldberg and Galat, we will not address those fees further. Moreover, we will address the award of costs only insofar as it is in dispute.

4. In view of this precedent, we find
   it unnecessary to address whether, by awarding expert witness fees, the award is inconsistent with the Supreme Court's decision in Casey. We note, however, that the MSPB has relied on Casey in concluding that the Back Pay Act does not permit recovery of such fees. Fishback, 54 M.S.P.R. at 260.