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Federal Circuit Wants Reasons for Mediator’s Fee Denial in EEOC Case

April 1, 2019 | Posted in : Expenses / Costs, Fee Clause, Fee Entitlement, Fee Issues on Appeal, Fee Reduction / Fee Denial, Fee Statute

A recent Law 360 story by Braden Campbell, “Fed. Circ. Wants Reasons for EEOC Mediator’s Fee Denial,” reports that the Federal Circuit told an arbitrator to reconsider denying fees to a U.S. Equal Employment Opportunity Commission mediator whose firing for a violent outburst the arbitrator reversed, directing him to explain his ultimate decision.  The panel said arbitrator John Dorsey should have explained why he denied mediator David Hamilton's request for fees while granting his request for reinstatement, saying it couldn't do its duty of deciding whether Hamilton abused his discretion with the fee denial because he didn't share his reasoning.

"In some instances, the matter may be so clear that the failure of the adjudicator to provide an explanation for its action will be harmless error, so that this court can enter judgment in accordance with the ruling below despite the absence of an explanation for that ruling," the panel said.  "But this is not such a case."

The EEOC fired Hamilton in 2017 following a mediation in which he "suddenly began to act erratically," hurling racial epithets and "engaging in physical violence" toward the parties in the dispute, according to the ruling.  Hamilton filed a grievance through his union, the American Federation of Government Employees Local 3599, and argued for reinstatement in arbitration.  Dorsey attributed the outburst to a one-time "major physical and/or mental breakdown" and ordered Hamilton be reinstated with back pay.  But Dorsey denied the union's request for arbitration costs and fees without explanation, and, after he reaffirmed his ruling following the EEOC's request for reconsideration, the union appealed to the Federal Circuit.

The panel frames the union as making three arguments on appeal: that Dorsey had to award fees "under the applicable standards," that he deviated from his merits decision by denying fees, and that his failure to explain the denial means it must be reversed.  The panel dispensed with the union's first two arguments briefly, saying the first amounted to a request that it find Dorsey abused his discretion "regardless of any findings," and that arbitrators can consider other factors than those behind their merits ruling in denying fees.  The panel said the third argument "has more force," discussing it in detail.

The panel said appeals ordinarily require that the adjudicator explain their reasoning "even on a matter as to which the adjudicator is given broad deference" because the reviewing body otherwise can't say whether the ruling was well reasoned.  This case illustrates why such reasoning "is typically critical to judicial review," the panel said.

The panel noted the EEOC argued in its bid for reconsideration that Dorsey rightly denied fees for two reasons: awarding fees would have been unjust, and its collective bargaining agreement with Local 3599 holds that parties in arbitration bear "fees and expenses" equally.  The EEOC later backed off the second argument, which omitted that this portion of the CBA spoke to arbitrators' fees only.  But because Dorsey did not explain his reasoning, it's unclear whether that argument factored into his fee decision, the panel said.

"Because the EEOC invited the arbitrator to deny fees on that ground, the agency is not well situated to argue that the arbitrator must have denied fees based on a valid ground, rather than on the invalid ground that the agency itself proposed," the panel said.

Barbara Hutchinson, who represents the union, said the panel's ruling "is consistent with the law, which requires an arbitrator state the findings and conclusions when ruling on a request for attorney fees and costs in arbitration cases appealable to MSPB."