WPEA under the Spotlight: OSC Attorney Fees

WPEA under the Spotlight is a new running feature that will explore the provisions of the Whistleblower Protection Enhancement Act, currently being debated in Congress. This entry covers the OSC attorney fees section of Senate Committee Report No. 112-155, which accompanies S. 743RS.

Background

F. Office of Special Counsel Attorney’s Fees

The OSC has authority to pursue disciplinary actions against managers who retaliate against whistleblowers. Currently, if the OSC loses such a case, it must pay the legal fees of those against whom it initiated the action. Because the OSC’s budget is small and the amounts involved could significantly deplete its resources, requiring the OSC to pay attorney’s fees undermines the OSC’s ability to enforce the WPA and defend the merit system by protecting whistleblowers.

Illustrative of the problem and the importance of S. 743’s solution is Santella v. Special Counsel.61 In a 2-1 decision, the MSPB held that the OSC could be held liable to pay attorney’s fees, even in cases where its decision to prosecute was a reasonable one, if the accused agency officials were ultimately found “substantially innocent” of the charges brought against them.

The OSC argued that its decision to prosecute the supervisors was a reasonable one, and an award of fees would not be in the interests of justice. Indeed, the OSC contended that awarding fees under the circumstances would be counter to the public interest and contrary to congressional intent that the OSC vigorously enforce the Whistleblower Protection Act by seeking to discipline supervisors who violate the Act. The OSC also argued, in the alternative, that if the supervisors were entitled to be reimbursed for their attorney’s fees, then their employing agency, the IRS, rather than the OSC, should bear the cost of reimbursement. The Board majority rejected the OSC’s arguments and held that the OSC, and not the IRS, should be liable for any award of fees.62 Vice Chair Slavet dissented.

The Committee believes that the OSC’s disciplinary action authority is a powerful weapon to deter whistleblowing retaliation. Should the Santella case remain valid law, the OSC would be subject to heavy financial penalties unless it can predict to a certainty that it will prevail before bringing a disciplinary action. Because the OSC is a small agency with a limited budget, this burden hinders the OSC’s use of disciplinary action as an enforcement mechanism and threatens the OSC’s ability to implement and enforce the WPA. To correct this problem, section 107 of S. 743 would require the employing agency, rather than the OSC, to reimburse any attorney’s fees the manager is entitled to recover.

[61] 86 M.S.P.R. 48 (2000).

[62] Id. at 64-65.

Section by Section Analysis

Section 107—Remedies

This section requires that, in disciplinary actions brought by OSC, the agency where the prevailing party was employed or had applied for employment at the time of the events giving rise to the case would reimburse any attorney’s fees awarded. Current law imposes the burden on the OSC. Section 107 also permits corrective action awarded to whistleblowers to include reasonable and foreseeable compensatory damages.