Afge Local 3599 v. E.E.O.C.

• Decision Date: 29 March 2019
• Docket Number: 2018-1888
• Citation: 920 F.3d 794
• Parties: AFGE LOCAL 3599, Petitioner v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Respondent
• Court: U.S. Court of Appeals — Federal Circuit

920 F.3d 794

AFGE LOCAL 3599, Petitioner

v.EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Respondent

2018-1888

United States Court of Appeals, Federal Circuit.

Decided: March 29, 2019

Barbara B. Hutchinson, Washington, DC, argued for petitioner.

Erin Murdock-Park, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by Joseph H. Hunt, Allison Kidd-Miller, Robert Edward Kirschman, Jr.

Before Taranto, Bryson, and Stoll, Circuit Judges.

Bryson, Circuit Judge.

In 2017, the Equal Employment Opportunity Commission ("EEOC") removed David Hamilton from his position as an agency mediator. Mr. Hamilton’s union filed a grievance challenging the removal. Pursuant to the collective bargaining agreement with the agency, Mr. Hamilton elected to have the challenge to his removal heard by an arbitrator rather than by the Merit Systems Protection Board. Following a hearing, the arbitrator overturned Mr. Hamilton’s removal, but denied the union’s request for an award of attorney fees. Mr. Hamilton’s union, AFGE Local 3599, has petitioned for review of the denial of attorney fees. We vacate the arbitrator’s denial of attorney fees and remand for further proceedings on that issue.

I

Mr. Hamilton has been employed by the EEOC for 20 years. In 2014, he was promoted to the position of mediator. The record reflects that during the period of his employment Mr. Hamilton had no disciplinary problems, with the exception of one day in 2016.

On that day, November 29, 2016, Mr. Hamilton was engaged in a mediation when he suddenly began to act erratically. Witnesses later testified that Mr. Hamilton began using racial epithets and engaging in physical violence toward the parties in the mediation, mistreated his co-workers, and refused to follow orders from management officials. Based on his conduct on that day, the EEOC proposed Mr. Hamilton’s removal. Following Mr. Hamilton’s response, the agency removed him from federal service on May 3, 2017. The union filed a grievance, which led to the union taking the case to arbitration.

The arbitrator, appointed by the Federal Mediation and Conciliation Service, conducted a two-day hearing. The EEOC called 11 witnesses at the hearing, and the union called Mr. Hamilton.

Although the arbitrator found that certain aspects of the EEOC’s case had not been proved, the arbitrator credited the testimony of several of the EEOC witnesses to the effect that Mr. Hamilton engaged in bizarre behavior that led the arbitrator to conclude that Mr. Hamilton "had a major physical and/or mental breakdown during the late stage of the November 29, 2016, mediation session." Noting that Mr. Hamilton denied that he lost control of himself or took any of the actions he was charged with, the arbitrator concluded that Mr. Hamilton "did not remember or ... even recall his actions that day."

The arbitrator found that Mr. Hamilton’s behavior on November 29, 2016, was a one-time event and that he otherwise had "an unblemished 19 year record as a Federal employee." The arbitrator further concluded that the EEOC had not shown that Mr. Hamilton’s behavior had any negative effect on the agency’s reputation, and that the agency had failed to consider that Mr. Hamilton’s unusual behavior "was caused by his obvious medical condition." Accordingly, the arbitrator determined that the agency had not established that it had just cause to remove Mr. Hamilton.

As a remedy, the arbitrator directed that Mr. Hamilton’s removal be set aside and that he be reinstated in his position with back pay and benefits. However, the arbitrator denied the union’s request that the agency be held responsible for the union’s arbitration costs and attorney fees.

Both parties petitioned the arbitrator for reconsideration of the decision. The EEOC requested that the arbitrator reconsider reinstating Mr. Hamilton, and the union asked that the arbitrator reconsider the portion of the award denying the union’s request for attorney fees. In response, the arbitrator reaffirmed the award, including the denial of attorney fees. The union then filed this petition for review, challenging the arbitrator’s failure to award attorney fees for the arbitration proceeding. The EEOC did not seek review of the arbitrator’s decision reinstating Mr. Hamilton.

II

When arbitration is provided for in a government agency’s collective bargaining agreement, an affected employee has the option to invoke arbitration in place of an appeal to the Merit Systems Protection Board. 5 U.S.C. § 7121(e)(1). Such an arbitration proceeding is governed by the same standard of proof as a proceeding before the Board. Id. § 7121(e)(2). A fee award following an arbitration is available to a prevailing employee under the same circumstances that it would be available to such an employee following a successful appeal to the Merit Systems Protection Board, and is awarded in accordance with standards established under 5 U.S.C. § 7701(g). Id. § 5596(b)(1)(A)(ii). This court has jurisdiction over appeals from arbitration awards, as it does over appeals from the Merit Systems Protection Board. Id. §§ 7121(f), 7703.

We review an arbitrator’s decision in the same manner as decisions of the Merit Systems Protection Board. Dunn v. Dep’t of Veterans Affairs , 98 F.3d 1308, 1311 (Fed. Cir. 1996). We will therefore uphold an arbitrator’s denial of attorneyfees unless the arbitrator’s decision was arbitrary, capricious, an abuse of discretion, or otherwise unlawful, procedurally deficient, or unsupported by substantial evidence. 5 U.S.C. § 7703(c). We afford "great deference to the Board (or an arbitrator standing in the place of the Board) on questions of entitlement to attorney fees." Dunn , 98 F.3d at 1311.

The governing statute for fee awards in this context, 5 U.S.C. § 7701(g), provides that an adjudicator may require an agency to pay the employee’s reasonable attorney fees if the employee is the prevailing party and the adjudicator determines that payment by the agency "is warranted in the interest of justice." This court has identified five non-exclusive factors that the Board (or an arbitrator) may consider in determining whether a fee award is in the interest of justice. Those factors, first identified by the Board in Allen v. U.S. Postal Service , 2 M.S.P.R. 420 (1980), and known ever since as the Allen factors, are the following:

1. Where the agency engaged in a "prohibited personnel practice" ( § 7701(g)(1) );

2. Where the agency’s action was "clearly without merit" ( § 7701(g)(1) ), or was "wholly unfounded," or the employee is "substantially innocent" of the charges brought by the agency;

3. Where the agency initiated the action against the employee in "bad faith," including:

a. Where the agency’s action was brought to "harass" the employee;

b. Where the agency’s action was brought to "exert improper pressure on the employee to act in certain ways";

4. Where the agency committed a "gross procedural error" which "prolonged the proceeding" or "severely prejudiced" the employee;

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

Yorkshire v. Merit Sys. Prot. Bd. , 746 F.2d 1454, 1456 (Fed. Cir. 1984).

In challenging the arbitrator’s decision denying the request for fees, the union makes essentially three arguments. First, the union contends that under the applicable standards, the arbitrator was required to award fees. Second, the union contends that the arbitrator improperly failed to apply the findings he made in his decision on the merits to the question whether to award fees. And third, the union argues that the arbitrator’s failure to provide reasons for his decision to deny attorney fees requires that the decision be reversed.¹ The court will address the three arguments in the order presented above.

1. In light of the fact that the arbitrator made no findings as to the reasons for denying the fee application, the union’s first argument in effect asks us to hold that regardless of any findings that the arbitrator might have made on that issue, the record compels us to hold that the arbitrator abused his discretion by denying a fee award. Put another way, in order to reverse outright and hold that the arbitrator abused his discretion in denying fees, we would have to conclude that any application of the Allen factors in this case would compel the conclusion that a fee award was required. While it may be that in some cases the record would point so strongly toward granting a fee award that we could reverse the adjudicator’s denial even in the absence of any express findings by the adjudicator as to the Allen factors or other reasons to deny the award, this is not such a case. In his opinion, the arbitrator found that a number of the EEOC’s allegations were supported by evidence, credited the testimony of those EEOC officials who testified at the hearing, and did not credit Mr. Hamilton’s denials that any of the events set forth in the EEOC’s charges had occurred. Nor does the record contain undisputed evidence that would have compelled an adjudicator to find that the Allen factors indisputably favored granting fees. This is therefore not a case in which we can say that no application of the Allen factors could reasonably lead to a conclusion that a fee award should be denied.

2. As for the union’s second argument, developed in the reply brief and at oral argument, we reject the contention that in determining whether to award fees, the arbitrator could not consider any facts other than those that were included in his opinion on the merits. The union argues that its position is supported by this court’s decision in Morrison v. National Science Foundation , 423 F.3d 1366 (Fed. Cir. 2005), but we disagree.

The Morrison court criticized an arbitrator’s decision to deny a fee award, because in deciding the attorney fee issue, the arbitrator "retreated from his earlier position" in his opinion...