Recovering Attorney Fees in a Disability Retirement Appeal

When can a Federal Employee or Postal Worker recover their attorney fees and costs from OPM in a Disability Retirement appeal?

When a Federal or Postal employee hires an attorney to file their applications for federal disability retirement with OPM, and the employee is successful before the MSPB, can he or she recover the attorney fees paid?

If the Federal Employee or USPS worker can prove the following four (4) elements, then the answer would generally be yes.

1. Attorney-Client Relationship

First, the applicant for Federal Disability Retirement will need to prove that there was an attorney-client relationship, and that the attorney provided legal services for the Federal employee in connection with an MSPB appeal. If OPM grants your application, and there is no need to file an MSPB appeal, the Federal employee or Postal worker will not be able to recover any attorney fees paid.

However, when there is an MSPB appeal, the best evidence of an attorney-client relationship is often the attorney's appearance in the proceedings or a written attorney-client agreement that the Federal employee or postal worker entered with their attorney. My Firm, the Attig Law Firm, will never represent a client for any reason without a written attorney-client agreement. However, this is not the case with all attorneys; I have seen and heard of many attorneys that tell someone that they are representing a Federal employee, the Federal employee pays the attorney money, and the day of the MSPB hearing rolls around the attorney is sitting in his office and has forgotten that he was paid by the Federal employee.

2. Prevailing Party

Second, the MSPB will want the Federal employee or USPS worker to prove that he or she was the "prevailing party". This is harder than it looks - the term "prevailing party" is what lawyers like to call a "legal term of art", and has a very specific definition in MSPB appeals. To show that he or she is a "prevailing party", a Federal employee or postal worker must show that his or her position changed materially, as a result of a ruling of the Merit Systems Protection Board. For example, if OPM denies you disability retirement, you have likely filed an MSPB appeal. If OPM changes their mind at any time before the MSPB Judge issues a decision, then you will not be considered a Prevailing Party. Why? (This will defy common sense, but for the time being, it is the law) The MSPB position is that it was OPM's reversal that changed your position, not the MSPB appeal. Even if it was the MSPB appeal which made OPM change its mind, you generally need a decision from an MSPB Judge to recover attorney fees against OPM.

3. Warranted in the Interest of Justice

Third, the MSPB judge will determine whether or not the award of attorney fees is "warranted in the interest of justice"? Again, this is another phrase that has a particular legal meaning.

There are two scenarios that can allow the Federal employee or USPS worker to prove that OPM's denial of disability retirement meets this standard. First, if (at the time of its reconsideration decision), OPM knew or should have known that it would not win on the merits at the MSPB, then attorney fees may be warranted in the interest of justice. Second, if OPM's decision to deny disability retirement benefits to the Federal Employee is totally without merit, then attorney fees might be warranted in the interest of justice.

4. Fees are Reasonable

Fourth, the federal or postal employee or their attorney will need to show that the fees sought from OPM are “reasonable." In an MSPB appeal, fees are reasonable if: a) the hourly rate their attorney charged was reasonable, and b) that the time the attorney spent on the matter was not duplicative, excessive, and was for compensable legal services.

If a USPS worker or Federal employee who has appealed to the MSPB and won a disability retirement case, and can show the above four (4) elements, then he or she will likely recover most, or all, of their attorney fees.