---

46 FLRA No. 89

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

UNITED STATES DEPARTMENT OF JUSTICE

BUREAU OF PRISONS, WASHINGTON, D.C. AND

BUREAU OF PRISONS, FEDERAL CORRECTIONAL INSTITUTION

RAY BROOK, NEW YORK

(Respondent)

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

AFL-CIO, LOCAL 3882

(Charging Party/Union)

1-CA-40368

(32 FLRA 20 (1988))

DECISION AND ORDER ON REMAND ON MOTION FOR

PAYMENT OF ATTORNEY FEES

December 18, 1992

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority pursuant to a remand from the United States Court of Appeals for the District of Columbia Circuit in American Federation of Government Employees, Local 3882 v. FLRA, 944 F.2d 922 (D.C. Cir. 1991) (AFGE, Local 3882). In proceedings before the Authority, the Union sought attorney fees and certain costs under the Back Pay Act, 5 U.S.C. § 5596,⁽¹⁾ in connection with a previously decided unfair labor practice case.⁽²⁾ The Authority ordered that the Respondent pay certain attorney fees and costs to Gay H. Snyder and attorney fees to Martin R. Cohen.

The Respondent and the Union petitioned for review of the Authority's decision, and the Authority filed a cross-application for enforcement. The court held that union-employed attorneys are entitled to fees for representing an employee in arbitration and unfair labor practice proceedings based on market rate fees. The court remanded the case to the Authority for further proceedings consistent with its opinion. On remand, we will order the Respondent, if it has not already done so, to pay $4,832.66 in attorney fees and costs to the AFGE Legal Representation Fund and $3,030.34 in attorney fees and costs to Gay H. Snyder for her representation while in private practice. We will remand the fee request for Martin R. Cohen to the Administrative Law Judge to determine the hourly rate and the amount of fees appropriate for the work Cohen performed.

II. History of the Case

A. Background

The facts relating to the underlying unfair labor practice proceeding are set forth in detail in Ray Brook. In Ray Brook, the Authority found that the Respondent committed an unfair labor practice by refusing to comply with an arbitration award which required the Respondent to reinstate an employee, Richard Frontera, to his former position at the Federal Correctional Institution at Ray Brook, New York. The Authority's order, which required the Respondent to comply with the arbitration award, was enforced by the United States Court of Appeals for the Second Circuit. United States Department of Justice, Bureau of Prisons, Federal Correctional Institution (Ray Brook) v. FLRA, 819 F.2d 1131 (2d Cir. 1987).

In connection with the unfair labor practice proceeding, Gay H. Snyder filed a motion for attorney fees and certain costs for her representation of Frontera in the unfair labor practice proceedings. Snyder requested fees for her work as Union-employed counsel and for the hours she spent as private counsel to Frontera after her employment with the Union ceased. An attorney fees award was also sought for Martin R. Cohen, a Union-employed attorney.

An Administrative Law Judge found that the attorney fee requests met the threshold requirements of the Back Pay Act.⁽³⁾ The Judge then determined, as required by the Back Pay Act, that the fee requests met the standards set forth in 5 U.S.C. § 7701(g)(1).⁽⁴⁾ As relevant here, the Judge found that the Union, on Frontera's behalf, incurred attorney fees within the meaning of section 7701(g)(1). The Judge found that Frontera was represented by the Union's counsel, Snyder and Cohen, during the unfair labor practice proceedings. The Judge recommended that attorney fees be awarded to Snyder and Cohen based on a cost-plus formula and at market rates to Snyder for her representation of Frontera as a private practitioner.

Both the Union and the Respondent filed exceptions to the Judge's award with the Authority. The Authority affirmed the Judge's findings and ordered the payment of attorney fees and costs in the amounts recommended by the Judge. United States Department of Justice, Bureau of Prisons Washington, D.C. and Bureau of Prisons, Federal Correctional Institution, Ray Brook, New York, 32 FLRA 20 (1988) (Ray Brook II).

B. Court's Decision

Both the Respondent and the Union petitioned the United States Court of Appeals for the District of Columbia Circuit to review the Authority's decision in Ray Brook II. The Respondent argued, among other things, that an attorney fee award was not authorized under the Back Pay Act because Frontera did not incur fees and was not obligated to pay the Union's attorneys. The Union asserted that an attorney fee award to union-employed attorneys should be based on the prevailing market rate rather than a cost-plus formula.

On the threshold issue of whether attorney fees may be awarded for representation in unfair labor practice proceedings, the court held that a union may qualify for attorney fees for representation of an aggrieved employee. Citing 5 C.F.R. § 550.807(a),⁽⁵⁾ the court found that "the phrase 'employee's personal representative' encompasses a union and its salaried attorney who have represented the employee." AFGE, Local 3882, 944 F.2d at 929.

With respect to the question of whether the fee award should be based on a cost-plus formula or on market rates, the court noted that the Back Pay Act provides for "reasonable" attorney fees and that this criterion is the sole limit on fee awards paid to lawyers. Id. at 934. The court stated that "[w]e are constrained to follow our earlier decisions equating 'reasonable' with market-rate fees." Id. at 937. The court agreed with the reasoning of the United States Court of Appeals for the Ninth Circuit regarding market rate fees. See Curran v. Department of the Treasury, 805 F.2d 1406 (9th Cir. 1986) (Curran).

The court also noted that although ethical concerns regarding the practice of law by an entity which is not a law firm are raised when organizations conduct other activities as well as furnishing legal services, market rate fees are appropriate when the organization places the fees in a legal representation fund. In this regard, the court disagreed with decisions of the Merit Systems Protection Board and the United States Court of Appeals for the Federal Circuit which held that, despite the existence of legal representation funds, attorney fee awards to unions must be limited to costs to avoid allowing unions to profit from litigation and, thereby, violate ethical principles.

The court found that fees received by the Union's lawyers in this case would be placed in the Union's legal representation fund, an account which is "totally separate from its general treasury," "under the sole control of the union's general counsel," and "used solely for legal work." AFGE, Local 3882, 944 F.2d at 935 (footnote omitted). The court found that the Union's fund is "the very sort we have approved as a bulwark against unethical practice." Id. (footnote omitted).

III. Analysis and Conclusions

Initially, we note that the sole issues before the court in AFGE, Local 3882 were whether an award of attorney fees was appropriate when a union represented an employee in unfair labor practice proceedings which were initiated by a union and, if so, whether fees could be awarded at the market rate to union-employed attorneys. The amount of an attorney fee award was not an issue before the court.

The court stated that, in agreement with the decision of the U.S. Court of Appeals for the Ninth Circuit in Curran, it saw no reason to place different ethical obligations upon lawyers seeking fees under the Back Pay Act from those seeking fees under other statutory provisions. The court found that market rate fees may be used to calculate reimbursement for attorney fee expenses under the provision in the Back Pay Act authorizing the payment of reasonable attorney fees. The market rate fees may be used in situations where, as here, a union attorney represented an employee who has prevailed in a case.

We agree that in these circumstances, there is "'no ethical barrier to compensation at market rate'" and that market rate is the appropriate standard to be applied under the Back Pay Act. AFGE, Local 3882, 944 F.2d at 937, (quoting Curran, 805 F.2d at 1409 (footnote omitted)). Accordingly, in agreement with the reasoning of the court, in this and future cases, where attorney fees are awarded under the Back Pay Act to successful employees represented by union attorneys, we will use market rate fees to calculate the payment of those attorney fees. To the extent that previous decisions applied a cost-plus formula for determining such attorney fees, those decisions will no longer be followed.

In Ray Brook II, the Authority awarded fees to Snyder at market rates for her representation of Frontera while she was in private practice. Consistent with the court's decision that attorney fees may be awarded, we find that the Authority's award of $3,030.34 to Snyder in Ray Brook II for the hours that she represented Frontera while she was in private practice is appropriate.

The remaining issue before us is to determine the appropriate market rate for fee awards to Snyder for her representation of Frontera while she was employed by the Union and to Cohen, a Union-employed attorney.

The Back Pay Act requires that an award of attorney fees be reasonable. See n.1. In order to make an attorney fee award, it is necessary to determine the number of hours reasonably expended in the litigation and whether the applicant's request for an award at a particular hourly rate is reasonable. The hours expended multiplied by the rate establish "'an objective basis on which to make an initial estimate of the value of a lawyer's services.'" Department of the Air Force Headquarters, 832D Combat Support Group DPCE, Luke Air Force Base, Arizona and American Federation of Government Employees, AFL-CIO, Local 1547, 32 FLRA 1084, 1100 (1988) (Luke AFB) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).

In Ray Brook II, the Judge found that Snyder reasonably expended 52.4 hours in representing Frontera. The Judge also concluded that Cohen's billing of 2.5 hours for his work on the case was reasonable. The Respondent did not dispute the Judge's determinations as to the hours reasonably expended, the Authority affirmed those determinations, and nothing in AFGE, Local 3882 affected this computation. Accordingly, consistent with the Authority's decision in Ray Brook II, we will use 52.4 hours to determine a fee award for Snyder and 2.5 hours for Cohen.

With respect to the market rate, the Authority has held that where an applicant for a fee award has a prior billing history, the reasonable hourly rate will be counsel's established billing rate. Luke AFB, 32 FLRA at 1109. See also Blum v. Stenson, 465 U.S. 886, 895-96 n.11 (1984) (Blum) ("the rates charged in private representations may afford relevant comparisons" in determining the market rate). To obtain an award at counsel's customary billing rate, the applicant must furnish precise information concerning billing rates during the relevant time periods. Contemporaneous retainer agreements are one source of this information. Other evidence that the applicant may submit includes awards from courts and arbitrators and fees agreed to through settlements. Luke AFB, 32 FLRA at 1111-12.

In Ray Brook II, the Judge found, based on the documentation submitted, that Snyder's fee request for the hours that she represented Frontera as a private practitioner was reasonably calculated at her customary hourly rate of $90. The Respondent did not object to the Judge's recommendation that this hourly rate be used, and the Authority accepted the Judge's recommendation. Consequently, we find that it is appropriate to use the same hourly rate of $90 to calculate the fee award for the hours Snyder spent as Union-employed counsel. Using that rate, we will award $4,716.00 in attorney fees to Snyder, which will be paid to the AFGE Legal Representation Fund for her representation as a Union-employed counsel. Additionally, the Judge awarded, and the Authority affirmed, that an award of $116.66 in costs was appropriate. Therefore, we will order that the Respondent pay $4,832.66 in attorney fees and costs to the AFGE Legal Representation Fund.

We now turn to Cohen's request for an attorney fee award. Cohen, a Union-employed attorney at all times during the unfair labor practice proceedings involving Frontera, requested attorney fees before the Judge on a market rate basis in Ray Brook II. In support of his request, Cohen submitted to the Judge only an affidavit in which he stated that the "[m]arket value [for an attorney's services] in the Delaware Valley area would be $100 an hour." Affidavit attached to Charging Party's Supplemental Brief in Support of its Motion for Attorney Fees, dated June 19, 1987. We note the Supreme Court's direction in Blum that "the burden is on the fees applicant to produce satisfactory evidence--in addition to the attorney's own affidavits--that the prevailing requested rates are in line with those in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum, 465 U.S. at 895-96 n.11. Although it is clear that Cohen expended 2.5 hours of work on this case, we are unable to determine the market rate basis on which to award Cohen attorney fees. Noting that this case arose at a time when the Authority was applying a cost-plus basis for determining attorney fees, we will remand Cohen's request for attorney fees to the Judge to determine the hourly market rate and the amount of fees appropriate for the 2.5 hours of work Cohen performed.⁽⁶⁾ In cases arising subsequent to this decision, a party requesting an award of attorney fees must satisfy the requirements for market rate fees. A party's failure to do so may result in denial of fees.

IV. Order

Pursuant to the Back Pay Act, 5 U.S.C. § 5596, and the Civil Service Reform Act of 1978, 5 U.S.C. § 7701(g), the Authority grants an award in the amount of $7746.34, plus $116.66 in costs. The Authority orders the U.S. Department of Justice, Bureau of Prisons, Washington, D.C. and the Bureau of Prisons, Federal Correctional Institution, Ray Brook, N.Y. to pay $4,832.66 to the AFGE Legal Representation Fund and $3,030.34 to Attorney Gay H. Snyder, if it has not already done so. The request for attorney fees for Martin R. Cohen is remanded to the Administrative Law Judge to determine the hourly rate and the amount of fees appropriate for the work Cohen performed.

---

---

---

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

1. 5 U.S.C. § 5596 provides, in relevant part, that an employee who

is found by appropriate authority under applicable law, rule, regulation . . . to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee--

(A) is entitled, on correction of the personnel action, . . .

(ii) reasonable attorney fees related to the personnel action which, with respect to any decision relating to an unfair labor practice . . . shall be awarded in accordance with standards established under section 7701(g) of this title[.]

2. United States Department of Justice, Bureau of Prisons, Washington, D.C. and Bureau of Prisons, Federal Correctional Institution, Ray Brook, New York, 22 FLRA 928 (1986) (Ray Brook).

3. The Back Pay Act, 5 U.S.C. § 5596, provides, as pertinent here, that:

(b)(1) An employee of an agency who, on the basis of a timely appeal . . . is found by appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee--

(A) is entitled, on correction of the personnel action, to receive for the period for which the personnel action was in effect--

(i) an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred . . . and

(ii) reasonable attorney fees . . . awarded in accordance with standards established under section 7701(g) of this title . . . .

4. 5 U.S.C. § 7701(g) provides, in relevant part, that:

. . . an administrative law judge . . . designated to hear a case, may require payment by the agency involved of reasonable attorney fees incurred by an employee . . . if the employee . . . is the prevailing party and the . . . administrative law judge . . . determines that payment by the agency is warranted in the interest of justice . . . .

5. 5 C.F.R. § 550.807(a) provides, in relevant part, that: "An employee or an employee's personal representative may request payment of reasonable attorney fees . . . ."

6. On September 23, 1992, Cohen mailed a Motion for Payment of Attorney Fees Upon Reversal and Remand to the Office of the Administrative Law Judges. On October 7, 1992, the document was transferred to the Authority's Docket Room. The Judge may consider this material on remand or request additional documentation.

---