Fed wins case but must fight for costs

Federal employees who win cases in which they charge that their agency has treated them unfairly should not necessarily assume they will be awarded attorney's fees. As a recent case involving a U.S. Postal Service employee illustrates, sometimes even winners have to fight for their rights.

Michael Matthews, a supervisory USPS employee, recently appealed the harshness of a penalty imposed upon him for a breach of conduct. USPS had reduced Matthews in grade from an EAS-16 supervisor of customer services to a PS-5 part-time, flexible distribution clerk based on charges that he failed to make on-the-spot corrections to unsafe driving practices he had observed in other employees.

Matthews appealed the decision to the Merit Systems Protection Board (MSPB). In an initial ruling, the administrative judge sustained the misconduct charges but mitigated the penalty to a 45-day suspension. The judge stated that USPS' penalty determination "exceed[ed] the tolerable limits of reasonableness."

That probably qualifies as the understatement of the year. The penalty clearly was not appropriate for the "crime." Downgrading a supervisory employee from the senior ranks of USPS to a lowly, part-time position for such a minor infraction of the rules suggests that someone was out to get Matthews.

Matthews did not challenge the initial decision but filed a motion seeking $9,459.06 in attorney's fees and expenses. (If I were Matthews, I also would have filed for punitive damages.) According to regulations, the MSPB can award attorney's fees incurred by an appellant who prevails in a final decision if it is clear that a wrongful action was taken against the appellant.

But surprisingly, the administrative judge denied Matthews' motion. He found that although Matthews prevailed in the final decision, an award of fees was not warranted. The judge said he had determined that Matthews was not innocent, so USPS' action could not be considered wholly unfounded or clearly without merit.

The judge even contradicted his previous opinion. He stated that the penalty USPS imposed on Matthews was "not unreasonable," so there really was no basis for awarding Matthews his legal expenses.

Matthews then petitioned the full MSPB for a review of the administrative judge's decision. In his petition, he asserted that the previous decision did find that USPS acted unreasonably. Matthews argued that an award of attorney's fees was warranted because USPS knew or should have known that the penalty imposed on him would not be upheld.

In prior cases of this kind, the courts have ruled that an award of attorney's fees may be warranted if an agency knew or should have known that it would not prevail "on the merits" of the case. The full MSPB ruled in Matthews' favor, stating that an agency's penalty selection is "part of the merits" of a case (Michael B. Matthews v. United States Postal Service; AT-0752-96-0617-A-1; May 22, 1998).

There is ample precedent for awarding Matthews attorney's fees. In the past, the MSPB has awarded attorney's fees in cases in which the board had sustained the charges in adverse action appeals but mitigated the penalty based on evidence readily available to the agency at the time it took the action. In those cases, the MSPB ruled that the agency knew or should have known that its choice of penalty would not be upheld.

In this case, the administrative judge's decision to mitigate the penalty was based on Matthews' 20 years of service with good performance and no prior discipline. This information was considered— and apparently ignored— by the deciding official within USPS. Fortunately, the full MSPB was not about to ignore Matthews' performance record. Therefore, the MSPB agreed with Matthews that the penalty imposed by USPS was not reasonable, and the initial decision had to be set aside.

Accordingly, the MSPB concluded that an award of attorney's fees was warranted in this case. Although Matthews prevailed, it wasn't easy. It should have been.

-- Bureaucratus is a retired federal employee who contributes regularly to Federal Computer Week.