Scales v. Hotel Trades Council of New York Local 6
23-873
2d Cir.Mar 21, 2025Background
- William Scales, an employee at the Ace Hotel New York, was represented by Hotel Trades Council of New York Local 6 (the Union) after a change in union representation in 2012.
- The collective bargaining agreement between the Union and the Hotel allowed employees a thirty-day window to choose between a 401(k) plan and the Industry Pension Plan, with non-selection resulting in automatic default to the Pension Plan.
- Scales, while on layoff, was not notified of this window and was subsequently defaulted into the Industry Pension Plan.
- After returning to work and attempting to select the 401(k) plan, Scales discovered years later that he had been placed in the Pension Plan and could not access his 401(k) funds.
- Scales filed a pro se complaint alleging breach of contract and breach of the duty of fair representation, which the district court dismissed for failure to state a claim; the decision was appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Dismissal for Failure to State a Claim | Filed claims for breach of duty of fair representation and other related claims. | Union did not act arbitrarily, in bad faith, or in breach of any contract. | Dismissal affirmed; failed to allege legally sufficient claim. |
| Existence of Breach of Contract by Union | Union owed duty to notify laid-off employees about election window. | No specific language in the agreement requiring Union notification. | No enforceable contract duty found against Union. |
| Conversion Claim | Denial of access to 401(k) funds constitutes conversion. | Conversion cannot be based on mere breach of contract. | No distinct tort claim; dismissed. |
| Denial of Appointment of Pro Bono Counsel | District court abused discretion in denying pro bono counsel. | Plaintiff's claims lacked likely merit, so appointment not warranted. | No abuse of discretion; denial affirmed. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for plausibility of claims)
- United Steelworkers of Am., AFL-CIO-CLC v. Rawson, 495 U.S. 362 (1990) (enforceability of union obligations by individual employees)
- Vaughn v. Phx. House N.Y. Inc., 957 F.3d 141 (2d Cir. 2020) (standard of review for 12(b)(6) dismissals and liberal construction of pro se complaints)
- White v. White Rose Food, a Div. of DiGiorgio Corp., 237 F.3d 174 (2d Cir. 2001) (elements of a 'hybrid' union/employer claim)
- Hodge v. Police Officers, 802 F.2d 58 (2d Cir. 1986) (criteria for appointment of pro bono counsel in civil cases)