U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Naval Surface Warfare Center, Indian Head, Maryland and American Federation of Government Employees, Local 1923, 0-AR-3285, July 23, 2001, 57 FLRA No. 75.

The Authority turned down agency exceptions to an award in which the arbitrator found that the agency committed an unjustified or unwarranted personnel action when it improperly failed to award the grievant backpay with interest at step one of the grievance procedure and determined that attorney fees were warranted in the interest of justice. Because the issue of the reasonableness of the amount of the attorney fees remained unresolved, FLRA remanded this matter to the parties for settlement or resubmission to the arbitrator. FLRA added that if either party objected to resubmission of this matter to this particular arbitrator, the parties are to select a different arbitrator to determine the reasonableness of the attorney fees sought.

In response to a September 1999 step one grievance seeking a retroactive within-grade step increase (WIGI), backpay with interest, and reasonable attorney fees, the agency apologized for the delay in granting the step increase and sent a form SF-50 stating that the effective date of the step increase was set as June 6, 1999.

In October, 1999, the grievant filed a step two grievance, asking for the same relief. In November 1999, he received a lump sum payment but was unable to determine the amount of interest paid since no itemization was provided. In response to the step two grievance, the agency said the WIGI had been "effected," that interest was being computed and that attorney fees were denied.

In November, 1999, the union filed a step three grievance asking for the same relief requested in the previous steps. At the step three grievance meeting, the agency's Labor Relations Officer indicated the agency committed an unwarranted personnel action and that the union had met the threshold requirement for attorney fees. But the agency's official response stated that the attorney fees were unreasonable and not warranted in the interest of justice.

The matter went to arbitration, where the arbitrator found that the agency committed an unjustified or unwarranted personnel action when it improperly failed to award the grievant backpay with interest at step one of the grievance procedure. He also determined that attorney fees were warranted in the interest of justice because the agency's failure to pay interest at the step one grievance response was "clearly without merit." (The arbitrator noted that in his experience with the parties the agency routinely delayed making payments owed to employees.) The arbitrator sustained the grievance and retained jurisdiction to consider any request for attorney fees. The agency filled numerous exceptions.

FLRA rejected, among other things, the agency's claim that the arbitrator lacked jurisdiction to award attorney fees because he didn't specifically award backpay. "There is no requirement in our precedent or the Back Pay Act that an award of backpay be in the same proceeding as the proceeding that determines entitlement to attorney fees." All that's required is that there be a determination that the employee was entitled to backpay and that this award was made in advance of the proceeding dealing with Attorney fees. "Here, the Arbitrator found that the grievant was entitled to the backpay [that] the Agency [had] granted because the Agency committed an unjustified or unwarranted personnel action. Based on our precedent, such finding is sufficient to justify awarding attorney fees."

FLRA also rejected the agency's claim that the arbitrator didn't conduct a fair hearing by relying on evidence from other hearings involving the same parties. It noted that "while the Arbitrator discussed the Agency's actions in similar grievances before him, he also relied on [a] separate finding, i.e., the Agency's failure to automatically pay interest, to conclude the Agency's action was without merit." (Italics added.)

It also rejected the agency's claim of bias, mainly because it failed to raise that claim at the arbitration hearing. (Apparently the arbitrator had offered his "condolences" in a telecon with the new Labor Relations Officer before the hearing, and had criticized the agency for filing an exception to an earlier award.) "[W]ith respect to a claim of personal bias involving an arbitrator, a party must raise that claim for the first time at the hearing, if it could be raised there, or we will not entertain such claims in the absence of exceptional circumstances."

FLRA also rejected the agency's nonfact exception and its claim that the award of attorney fees was deficient under the "interest of justice" standard. Regarding the latter, it said that "[h]ad the Agency properly considered the Back Pay Act when it issued its step one grievance response awarding backpay, it should have readily concluded that interest was also due. Therefore, the conclusion of the Arbitrator that the Agency's action was clearly without merit is supported by Authority precedent."

Since the amount of attorney fees remained unsettled, this matter was remanded to the parties for settlement or resubmission to an arbitrator. It cited 56 FLRA No. 141, involving the parties and the same arbitrator, as justification for allowing either party to veto resubmission to that particular arbitrator and permitting them instead to agree upon another arbitrator to determine the amount of attorney fees. "[W]hile bias was not proved, the record showed that the relationship between the Arbitrator and the parties was strained to a degree that called into question the Arbitrator's 'continuing ability to assist the parties to resolve their disputes and improve their labor-management relationship.'"