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Hay Adams Hotel LLC v. Hotel & Restaurant Employees

May 9, 2007

HAY ADAMS HOTEL LLC, PLAINTIFF,
v.
HOTEL & RESTAURANT EMPLOYEES, LOCAL 25, UNITE HERE INTERNATIONAL UNION, DEFENDANT.



The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge

MEMORANDUM OPINION

Plaintiff Hay Adams Hotel ("the Hotel") has filed a complaint under Section 301 of the Labor Management Relations Act to vacate an arbitration award rendered by Arbitrator Nicholas Zumas pursuant to a last chance agreement ("LCA") between the Hotel and Local 25 of the Hotel and Restaurant Employees' UNITE HERE International Union ("the Union"). Pending before the Court are the parties' cross motions for summary judgment. Upon consideration of the motions, responses and replies thereto, applicable law, and the entire record, the Court grants the Hotel's motion for summary judgment and denies the Union's motion for summary judgment.

I. BACKGROUND

The Hay Adam Hotel is a luxury hotel located in the District of Columbia, and is a member of the Hotel Association of Washington, DC ("the Association"). Compl. ¶ 2. The Association negotiated the current collective bargaining agreement ("CBA") between the Hotel and the Union. Id. at ¶ 7. The parties' CBA contains a detailed grievance procedure, in which arbitration is put forth as the final means of resolving any "grievance or misunderstanding" arising from the CBA. See CBA, Art. XVII: Grievance and Arbitration Procedure, Ex. 1 to Virk Decl.

Girdharry Merhai worked as a bellman at the Hotel and was covered by the CBA. In 2003, Merhai was terminated from the Hotel after he violated several rules related to proper conduct in the workplace.*fn1 The Union, however, intervened on Merhai's behalf and negotiated a LCA with the Hotel. The LCA provided for Merhai's reinstatement on the condition that he refrain from behavior "similar in nature to that which gave rise to the instant grievance." Settlement Agreement ¶ 3, Ex. 4 to Virk Decl. The agreement stipulates that in the event that Merhai engaged in similar conduct, the Union waived its right to grieve the termination.*fn2 Id. The LCA was signed by the Hotel, the Union, and Merhai himself. Id. at 2. Merhai subsequently returned to work in his previous position at the Hotel.

In July 2005, Merhai violated additional rules related to appropriate conduct in the workplace. He called members of Hotel management "racists" within earshot of Hotel customers and accused the Hotel's controller of harassing him about his worker's compensation absences. Following these incidents, the Hotel terminated Merhai pursuant to the LCA.

The Union then filed a grievance, which was opposed by the Hotel. The Hotel argued that because the behavior which led to Merhai's termination was "similar" to that of the 2003 behavior that led to the LCA, the Union was estopped from grieving his termination. See Settlement Agreement ¶ 3. The Union countered that Merhai's behavior did not constitute a breach of the LCA, and, therefore, his discharge was not justified. Because the parties were unable to resolve their grievance, the matter was submitted to arbitration.

In December 2005, Arbitrator Nicholas Zumas conducted a twoday arbitration hearing regarding Merhai's termination. Both the Hotel and the Union presented witnesses and submitted exhibits. When Merhai was questioned about his actions he testified that he called members of Hotel management "racists" because they made him "feel inferior" and "like a piece of sand." Arbitration Hr'g Tr. Vol. 1, at 233-34 (Dec. 15-16, 2005), Ex. 2 to Virk Decl. He explained that while no member of Hotel management had ever expressly mentioned his race, he felt as though they "conspired against [him]" because of the "color of [his] skin." Id., Vol. 2, at 24-27. Finding Merhai's testimony "bizarre," the arbitrator asked the parties if there was a psychological explanation for Merhai's outburst. Id., Vol. 2, at 76. Neither party was aware of any underlying psychiatric disorder. After the hearing, the arbitrator had the parties submit post-hearing briefs. See generally Union Post-Hearing Brief, Ex. 5 to Virk Decl.; Hotel Post-Hearing Brief, Ex. 6 to Virk Decl.

On April 13, 2006, the arbitrator issued his opinion and award. See generally UNITE HERE, Local 25 v. Hay-Adams Hotel (Apr. 13, 2006) (Zumas, Arb.) ("Arbitration Award"), Ex. 3 to Virk Decl. The arbitrator framed the issue before him as "whether Grievant violated the conditions of his Last Chance Agreement; and if so, whether the penalty of termination was appropriate." Id. at 3. The arbitrator answered the first question in the affirmative. He acknowledged that "[t]he Company presented credible evidence that Grievant in fact committed a number of violations of Company work rules" in violation of the LCA. See id. at 13 (discussing these factual findings). The arbitrator then noted that during the hearings "it became apparent to this Arbitrator that Grievant is a troubled employee, who clearly displays symptoms of underlying psychological imbalance." Id. Finding that an underlying psychological imbalance was not contemplated by the parties when they negotiated the LCA, the arbitrator determined that it was "more appropriate" to "provide for a careful inquiry by a qualified professional into possible psychological problems which might have caused a long-term employee to begin engaging in this kind of misconduct," rather than "simply terminate this employee under the terms of the LCA, without further investigation." Id. at 14.*fn3 Ultimately, then, despite his determination that Merhai "violat[ed] the conditions for his reinstatement under the 2003 LCA," the arbitrator ordered that the Hotel conditionally reinstate Merhai. Id. at 13.

On May 24, 2006, the Hotel filed a complaint, seeking to vacate the arbitration award. The Hotel alleged that the award was unenforceable because it failed to draw its essence from the LCA and was in violation of public policy. The Union then filed a counterclaim for enforcement of the arbitration award. On October 16, 2006, the Hotel filed a motion for summary judgment claiming that the arbitrator exceeded his statutory and contractual authority in rendering his award. On November 22, 2006, the Union filed a cross motion for summary judgment on the ground that the arbitrator's award was proper. Both parties agree that there is no dispute of fact and this matter may be resolved on summary judgment.

II. ANALYSIS

Labor arbitration awards are generally afforded great deference. See Madison Hotel v. Hotel & Restaurant Emples., Local 25, 144 F.3d 855, 855-59 (D.C. Cir. 1998) (citing United Steelworkers of Am. v. Am. Mfg. Co., 363 U.S. 564, 568 (1960)). There are, however, limitations on arbitration awards. For instance, in rendering an award "[t]he arbitrator may not ignore the plain language of the contract." United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987); see also Madison Hotel, 144 F.3d at 858 (noting that an arbitration award which "fails to draw its essence from the collective bargaining agreement cannot stand"). "Nor can an arbitrator simply ignore the contract and 'dispense his own brand of industrial justice.'" Madison Hotel, 144 F.3d at 859 (quoting United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960)). An arbitrator, therefore, is confined to the "interpretation and application" of the parties' agreement. Enterprise Wheel, 363 U.S. at 597. The issue in this case, then, is whether the arbitrator "grossly deviate[d] from his conferred authority or from the issues submitted for arbitration" in rendering his award.*fn4 Office & Prof. Emp. Int'l Union, Local 2 v. Washington Metro. Transit Auth., 724 F.2d 133, 140 (D.C. Cir. 1983).

The Hotel persuasively argues that the award should be vacated, as the arbitrator failed to abide by the clear and unambiguous language of the LCA. The Hotel explains that once the arbitrator determined that Merhai "violated the conditions of his LCA," id. at 13, the arbitrator lacked authority to engage in further inquiry, as the Union agreed in the LCA not to grieve such a termination. See United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960) ("[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.").

The Union counters that because the parties did not stipulate the issues submitted to arbitration, the arbitrator was free to determine the issues before him.*fn5 See Madison Hotel, 144 F.3d at 857 ("An arbitrator's view of the issues submitted to him for arbitration therefore receives the same judicial deference as an arbitrator's interpretation of a collective agreement."). Arguing that the arbitrator's framing of the issues was "rationally derived" from the parties' submission, the Union submits that the arbitrator's decision to engage in a "just cause" analysis was permissible, ...


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