Can We Get Attorney's Fees?
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I've written a bit about remedies before in Should We Arbitrate This? and A Few Words on Remedies. I now want to talk a little more about an oft-sought, rarely award remedy: attorney's fees.
Attorney's fees are usually a creature of statutes to ensure that some lawyer, somewhere, will take the case. You occasionally see attorney's fees provisions in contracts but they are rare in collective bargaining agreements. CBAs presume that the parties will have an ongoing relationship and will manage their own representation. Labor arbitration is not an alternative to litigation and you don't actually need lawyers to handle a grievance. So the general principle is: there are no attorney's fees in labor arbitration.
That doesn't stop people from asking, of course. I have personally only awarded attorney's fees in one case but I think it's a good illustration of the very narrow terms that those fees would be awarded. This case involved a pay dispute that was resolved in the union's favor and backpay was awarded. The employer agreed to the amount that was due, and the parties signed a post-award settlement agreement that included my retained jurisdiction over the implementation of the award. The Employer agreed to pay the backpay within 30 days.
Many months passed. Each time the Union inquired, the Employer said, "We just need 30 more days." Finally, after about 8 months of this, perhaps longer, the Union invoked my jurisdiction, and asked me to find out what was going on, expand the order to calculate interest, and add attorney's fees.
After a hearing where the Employer representative testified, I wrote the following:
The Union has also requested the unusual remedy of attorneys’ fees, which are rarely granted in labor arbitration. As noted in their brief, “a request for attorneys’ fees may be granted for the same reasons as a punitive damage award: bad faith, or egregious, flagrant, willful, and repeated violations of the contract.”[1] Bad faith is further defined as “a refusal to fulfill some duty or contractual obligation, not prompted by an honest mistake as to one’s rights and duties, but by some interested or sinister motive.”[2]
The Union cites several arbitration awards under other collective bargaining agreements where the arbitrator awarded attorneys’ fees and costs. Arbitrator Bonnie Bogue awarded fees and costs in Contempo Design.[3] In that case, the employer admitted their breach but failed or refused to participate in the grievance procedure or communicate with their own lawyer. Attorney’s fees were awarded in other cases where the employer failed or refused to participate in arbitration or failed to make timely payments, or were responsible for the prolonged and continued prosecution of a grievance.[4]
An award of attorney fees and costs is an extraordinary measure that is not imposed without due consideration for the Agreement. Typically, as here, the parties are expected to bear their own costs and fees associated with the grievance procedure, sharing the mutual costs equally. In this case, the Agreement does not prohibit an award of attorney’s fees, so it is in the Arbitrator’s discretion to determine whether an award of attorneys’ fees and costs is justified by the circumstances of this case.
As an initial matter, I think it’s worth noting that the [employer] representative does not have the power to issue the required payments, and likely would have done so if it were within his control. The responsibility for the ongoing breach currently rests with the controller’s office, who will not even provide the name of a responsible authority who could assist with resolving this dispute. The controller’s office blames a software problem, but it is not the software who is a signatory to the Agreement with [the union]. The [employer] is, and the [employer] is in breach of the Agreement and the Remedy Agreement. By blaming the software problem, the [employer] is refusing to fulfill its contractual obligations.
The delay in making the payment has gone beyond an honest mistake. The [employer] is acting in bad faith by not finding an alternative to the [software] system to meet its obligations. It’s failure to pay its employees what they are owed is dilatory and capricious, and an award of attorney’s fees is justified.
It's important to note that the final attorney's fee award was only the amount of attorney's fees incurred by the union in its pursuit of the backpay dues, i.e. communicating with the employer about the remedy and preparing it's case for the remedy hearing. They did not get attorney's fees for the original grievance and arbitration.
[1] Elkouri & Elkouri, How Arbitration Works, 18.3.H.i.
[2] Id, citing Synergy Gas, 91 BNA 92.
[3] 120 BNA LA 1317 (2004).
[4] See, Laidlaw Transit, 109 BNA LA 647 (Landau 1997); San Benito Health Found., 105 BNA LA 263 (Levy 1995); Tennessee Valley Auth., 101 BNA LA 218 (Bankston 1993).
