161 F. Supp. 3d 262
S.D.N.Y.2016Background
- Timothy Cremin, a bartender employed by Westchester Hills Golf Club (WHGC), was discharged on December 7, 2013; UNITE HERE Local 100 grieved and arbitrated the discharge.
- Parties were bound by a Collective Bargaining Agreement (CBA) with a mandatory grievance/arbitration procedure; Cremin had previously been reinstated by a 2010 arbitration award that included a “Final Warning.”
- WHGC had earlier offered Cremin a Last Chance Agreement (LCA) in late 2011 resolving a threatened termination; the LCA purported to allow summary termination for future infractions.
- After a complaint about Cremin’s conduct at an August 2013 event, WHGC suspended and later terminated him; an arbitrator in December 2014 issued the 2015 Award voiding the LCA, finding no just cause, and ordering reinstatement with back pay.
- UNITE HERE sought court confirmation of the 2015 Award after WHGC refused to comply; WHGC moved to vacate the award on three main grounds (disregard of 2010 Award, invalidation of the LCA, and failure to mitigate damages).
- The District Court confirmed the 2015 Award, granted pre-judgment interest at New York’s statutory 9% rate, denied vacatur, and denied UNITE HERE’s request for attorneys’ fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator exceeded authority by ignoring the 2010 Award’s “Final Warning” | Arbitrator properly interpreted that the Final Warning did not apply to Cremin’s conduct | Final Warning permitted summary discharge and was wrongly disregarded | Denied vacatur — arbitrator considered and applied the 2010 Award; courts may not second-guess factual or contractual interpretations that are at least colorably justified. |
| Whether the LCA was enforceable | LCA unenforceable because it settled a grievance without union involvement, contravening Article 28 of the CBA | LCA valid and allowed WHGC to terminate Cremin independently | Denied vacatur — arbitrator reasonably found the LCA resolved a grievance and was unenforceable under the CBA. |
| Whether arbitrator failed to consider mitigation in awarding back pay | Award included back pay but record showed Cremin attempted to mitigate; arbitrator considered and rejected WHGC’s mitigation claim | Arbitrator ignored mitigation duty and award is arbitrary and capricious | Denied vacatur — arbitrator noted mitigation evidence and reasonably rejected defendant’s position; courts cannot disturb such factual determinations. |
| Whether attorneys’ fees and costs should be awarded to union | Union sought fees as prevailing party enforcing award | WHGC contested merits but did not act in bad faith | Denied — no contractual or statutory basis; fees would require bad-faith or frivolous conduct, which was not shown. |
Key Cases Cited
- Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (U.S. 2013) (arbitral awards are vacated only in very unusual circumstances; review limited to whether arbitrator arguably interpreted the contract)
- Stolt-Nielsen S.A. v. Animal-Feeds Int’l Corp., 559 U.S. 662 (U.S. 2010) (arbitrator exceeds authority when dispensing his own brand of industrial justice)
- Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504 (U.S. 2001) (same principle re: limits on arbitral authority)
- Wallace v. Buttar, 378 F.3d 182 (2d Cir. 2004) (arbitral awards stand if there is a barely colorable justification)
- Westerbeke Corp. v. Daihatsu Motor Co., Ltd., 304 F.3d 200 (2d Cir. 2002) (factual findings and contractual interpretation by arbitrator are not subject to judicial challenge)
- Am. Postal Workers Union, AFL-CIO v. U.S. Postal Serv., 754 F.3d 109 (2d Cir. 2014) (LMRA review standard is materially the same as FAA review)
- Waterside Ocean Navigation Co. v. Int’l Navigation Ltd., 737 F.2d 150 (2d Cir. 1984) (court has inherent authority to award pre-judgment interest in confirming arbitral awards)
