Summary
granting summary judgment for Union finding no breach of the Union's duty of fair representation
Summary of this case from Hussein v. Hotel Employees and Restaurant Union, Local 6Opinion
No. 00 Civ. 5584 (GEL).
May 18, 2001
Wendy E. Sloan, New York, New York, for Plaintiffs Brian Shait, Richard Austin, Tyne Firmin, Ariane Lemay and Purported Class Members.
Judith A. Stoll, Kane Kessler, PC. (Robert L. Sacks, of counsel), New York, New York for Defendant Millennium Broadway Hotel.
Barry N Saltzman, Herrick Feinstein LLP (Joseph J. Lynett, of counsel), New York, New York, for Defendants New York Hotel and Motel Trades Council, AFL-CIO and Hotel, Restaurant Club Employees and Bartenders Union Local 6, AFL-CIO.
OPINION AND ORDER
Plaintiffs Brian Shait, Richard Austin, Tyne Firmin and Ariane LeMay ("Plaintiffs"), acting individually and on behalf of a purported class of banquet waiters at Defendant Millennium Broadway Hotel (the "Hotel"), have brought this action to vacate certain arbitration awards that were rendered against Defendants New York Hotel and Motel Trades Council, AFL-CIO, and Hotel, Restaurant Club Employees and Bartenders Union Local 6, AFL-CIO (collectively the "Union"). Plaintiffs have also asserted duty of fair representation claims, pursuant to section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the Labor-Management Reporting Disclosure Act ("LMRDA"), 29 U.S.C. § 411(a)(2), related to, among other things, actions that the Union's President, Peter Ward, allegedly undertook to stifle Plaintiffs' criticism of the Union. The Union answered the complaint and moved for judgment on the pleadings or, alternatively, for summary judgment, on all claims asserted against it. The Hotel also moved to dismiss for failure to state a claim or, in the alternative, for summary judgment. Plaintiffs cross-moved for summary judgment on the claims asserted in the complaint, and also moved for leave to assert an additional LMRDA claim against the Union.
The dispute centers on the Plaintiffs' claims that the Union failed adequately to protect their interests in connection with an arbitration proceeding. For the reasons that follow, Defendants' motions for summary judgment are granted, and Plaintiffs' cross-motion for summary judgment and motion for leave to amend the complaint are denied.
BACKGROUND
I. Facts
The following facts are drawn from the parties' pleadings and motions papers and, unless stated otherwise, are uncontroverted.
In 1998, the Union began negotiations with the Hotel to secure a collective bargaining agreement for the Hotel's employees, who until 1996 had been non-unionized. (Ward Aff. ¶¶ 24-26) Following fruitful talks, the parties executed a Memorandum of Understanding ("MOU") on July 1, 1998. in which the Hotel for the most part agreed to bind itself to an Industry-Wide Agreement ("IWA") that, among other things, sets wage schedules for various classifications of hotel workers in New York City. The parties, however, were unable to reach agreement about wages and gratuities that would be paid to the Hotel's banquet waiters (also referred to as "Club Dining" \waiters). (Id. ¶¶ 31-36.) The Union's representatives, including Brian Shait, a delegate for the Club Dining waiters at the Hotel, pushed the Hotel to accept Schedule A-1 of the IWA, which would have more than doubled the waiters' compensation. See, eg., Shait Aff. ¶ 6 Ward Aff. ¶¶ 30-31) The Hotel refused, because of the increased wage costs it would have to incur and the prospect of losing business to customers who, it claimed, were not accustomed to paying gratuities for business-related conference events. (Shait Aff. Ex. A at 6-8.) The banquet waiters, of course were disappointed with the Hotel's stance, the more so as they were then litigating a back-gratuities case against the Hotel in New York State court, arising out of certain allegedly illegal labor practices (Shait Aff. ¶ 30(d) n4)
Most hotels in New York City bargain collectively through the Hotel Association of the City of New York, Inc (Ward Aff. ¶ 11) However, the Millennium Broadway Hotel has opted-out of that arrangement.
Having reached an impasse in their negotiations, the parties agreed to refer the dispute to interest arbitration before the Office of the Impartial Chairman. a standing organization of labor arbitrators empaneled to hear disputes arising out of the IWA (Ward Aff. ¶ 28.) From 1998 through 1999, the Office consisted of three arbitrators with extensive experience in adjudicating IWA cases, including Elliott Shriftman, an arbitrator affiliated with organizations such as the American Arbitration Association, the National Academy of Arbitrators and the Federal Mediation and Concihation Service (Id. ¶ 15.)
The Club Dining waiters, apparently confident that an arbitrator would require the Hotel to adopt Schedule A-1, informed Union officials that they wanted a baseball arbitration," in which the arbitrator would have to choose between one of the dueling proposals in its entirety and would not have the authority to fashion a compromise. (Id. ¶ 28.) The Hotel agreed to arbitrate under the "baseball" format, which is described in Section 22(c)(3) of the MOU:
After considering the arguments of the parties, the Impartial Chairman will decide which party's proposal is the most appropriate for the parties based upon the aforesaid submissions and upon review of all relevant factors and will inform the parties of his/her decision The Impartial Chairman will choose one of the proposals submitted by the parties in its entirety The proposal selected by the Impartial Chairman will be final and binding upon the parties hereto and will be incorporated by reference into the MOU and will be retroactive as of and to the effective date of the MOU.
(Shait Supplemental Aff. Ex G.)
Additionally, the Club Dining waiters were concerned that various issues of fact would arise during the course of the arbitration As a result, they asked Union officials to seek a provision in the MOU authorizing an evidentiary hearing to resolve factual issues. (Ward Aff. ¶ 28.) The Hotel agreed to the suggested provision, which appears in Section 22(c)(2) of the MOU:
The Impartial Chairman will be empowered, in his/her sole discretion, to order an evidentiary hearing at a later date if there is a factual dispute which he/she considers relevant to his/her deliberations
(Shait Supplemental Aff. Ex. G.) Although Section 22 on its face expressly provides that the decision to hold a hearing is within the sole discretion of the arbitrator, Plaintiffs contend that the Union misled the waiters by not informing them that the evidentiary hearing would be discretionary (Shait Aff. ¶¶ 17-19.)
Brian Shait, the Union delegate from the Club Dining waiters at the Hotel, took an active role in preparing the Union's presentation to the arbitrator. The Union arranged for Shait to canter with its lead counsel, Stephen O'Beirne, an experienced labor attorney at Richards O'Neil, LLP, who had handled other major arbitrations for the Union. (O'Beirne Aff. ¶ 8.) Among other preparatory activities. Shait compiled a voluminous compendium of exhibits and actively assisted O'Beirne in drafting the Union's brief, which went through approximately fifteen drafts Overall, O'Beirne worked hundreds of hours on the Union's papers. (Id. ¶¶ 25, 27-29, 31-33).
O'Beirne states that he advised Shad that there are very limited grounds under federal and New York law for vacating an arbitration award — especially one that is rendered within the context of an interest arbitration. (O'Beirne Aff. ¶ 26.)
Additionally, O'Beirne avers that he and Shait discussed the possibility of making an argument regarding the "Most Favored Nations Clause" ("MFN") of the IWA. O'Beirne explained to Shait that the clause is designed to aid management by allowing an employer to obtain the same benefits that are embodied in other collective bargaining agreements negotiated by the Union. Thus, O'Beirne claims, he and Shait agreed that the MFN clause in the IWA did not bolster the Union's arguments regarding whether the Hotel should be compelled to adopt Schedule A-1. (Id. ¶ 34.) Shait, however, denies that he agreed with O'Beirne's analysis of the issue. (Shait Aff. ¶ 18.)
On October 14, 1998, the parties submitted their papers to Arbitrator Shriftman. The Union proposed that the arbitrator should adopt Schedule A-1, the industry standard for banquet waiters, which at the time consisted of a fiat hourly wage plus gratuities (equal to 15% of the fees paid for the event) and set-up fees for all banquet events (Shait Supplemental Aff. Ex. I at 3.) The Hotel, contending that it could not afford to adopt the Schedule A-1 standard because many of its events were supposedly business conferences that were not banquets in the traditional sense (and because it would therefore lose prospective customers who would not be willing to pay gratuities for those events), proposed that banquet waiters receive base pay of $12.00 per hour, and 15% gratuities on the bill for the event, if they worked at "social" functions (such as weddings and bar mitzvah receptions) For events that were more business-related, the waiters would simply receive base pay of $21.85 per hour. (Id. Ex H at 6-9, 11-21, 23-25.)
The Hotel's proposal also guaranteed that the waiters would earn at least the equivalent of $21.85 per hour for work on "social events (Shait Supplemental Aff. Ex. H at 15.)
The Union vigorously attacked the Hotel's proposal. The IWA, the Union argued, does not distinguish between business and "social" events. In its arbitration brief, the Union devoted considerable space to evidence casting doubt on the proposed distinction, by illustrating, among other things, that the Hotel had historically charged gratuities (most of which, the Union had alleged in its state court action, were pocketed by the Hotel) to business customers. (Id. Ex. I at 15-20) The Hotel did not submit any evidence in support of its proposal.
Among other things. the Union argued in its arbitration papers that, contrary to the Hotel's assertions:
(A) the Hotel had a history of bad faith, having representing to the Union and its employees that it did not charge gratuities, when its own documents showed it did,
(B) the Hotel operates a traditional banquet department,
(C) the Hotel could afford to pay the same wage rates as other unionized hotels in New York City,
(D) the Union's proposal did not require any particular method of employee scheduling; and
(E) the Union's proposal would not create a greater wage disparity among employees than already existed at the Hotel, given, among other reasons, the sporadic and seasonal nature of the work.
(O'Beirne Aff. ¶ 30.)
Shait claims that he and other Union members requested that the Union affirmatively seek an evidentiary hearing before Arbitrator Shriftman. (Shait Aff. ¶ 16.) O'Beirne disputes Shait's allegations. More importantly, O'Beirne avers that such a hearing would not have been beneficial, since the Union already had submitted voluminous evidence and the Hotel had presented none. An evidentiary hearing would have allowed the Hotel an opportunity to present additional materials, and to challenge b cross-examination the evidence assembled by Shait and presented in the Union's papers. (O'Beirne Aff. ¶ 35.)
During the arbitration's pendency, Ward notified senior management at the Hotel that even if the Union were to lose the arbitration, it intended to continue to press for Club Dining waiters to be compensated pursuant to Schedule A-1 (Ward Aff. ¶ 34) Ward also received various written and telephonic correspondence from Shait, who often sought to apprise Ward about information that Shait believed would be helpful to the arbitration efforts. (Id.)
Shait also sent a letter to Arbitrator Shriftman on March 15, 1999, in which, among other things, he argued that the Hotel was incorrect in stating that 30% of its banquet events would have been classified as "social" in nature (Shait Aff. Ex. J.).
In March 1999, Ward telephoned Shriftman ex parte to determine when an award would be entered. (Shait Aff. ¶¶ 37-39.) Shriftman apparently did not respond. At a subsequent Union meeting on April 8, 1999, Ward told the rank and file that he may have erred in making the phone call. He also allegedly said that if the Club Dining waiters were unhappy with the arbitrator's award, the Union would consider allowing the waiters to withdraw from the Union. (Id. ¶¶ 40-42.)
From May 9-19, 1999, Shait convened a series of meetings with banquet waiters throughout New York City to discuss the members' working conditions, the pending arbitration, the Union's conduct and representation of its members, and the Hotel's actions. Shait also circulated petitions and leaflets at hotels throughout the city, in which he sought support for various proposals that would be presented to the Union. (Pls.' Rule 56.1 Statement ¶¶ 29-30.) The Union became concerned about Shait's activities, because it did not want other hotels to learn that the Millennium Broadway Hotel had resisted adopting the terms of Schedule A-1. (Ward Aff. ¶¶ 35-36.) Accordingly, during a telephone conversation with Shait on May 19, 1999, Ward asked Shait to desist from his activism Among other things, he "criticized" Shait for attempting to circumvent the Union's efforts to achieve a negotiated solution. (Id. ¶ 37.) Ward, Shait avers, told Shait that he had "no right to go around and tell other people what is going on with you guys at the hotel. You want to talk to other people, you get my permission first." (Shait Aff. ¶ 52.) Shait also claims that Ward told him to "watch out . . . you are charting some dangerous territory here" (Id. ¶ 53) Following their conversation, Shait abandoned his organizational activities. (Id.)
On May 25, 1999. the Office of the Impartial Chairman presided over an arbitration concerning compensation paid to banquet waiters at the Waldorf-Astoria Hotel. Numerous union members from different hotels, including Shait, attempted to enter the hearing site to lend their support to the Waldorf employees. The arbitrator presiding over the hearing apparently became concerned about security, which led him to enter an interim order permitting only union delegates from the Waldorf and Union officers to attend. Shait, who was neither, was therefore excluded from entering the hearing room. (Ward Aff. ¶ 38 Ex C)
Ward invited Joe Salmieri and Pat Morgan, who he avers were officers of the Union, to attend Shait claims that Morgan was not an officer.
That same day, Ward conducted a meeting with several Union members. He allegedly claimed that he would not negotiate with the Hotel on Shait's "behalf anymore" and "whatever [Shait] gets, he's gonna have to live with." Ward also supposedly said that the Club Dining waiters "aren't serious waiters" and "they don't want to make a living." (Shait Aff. ¶ 59.) Subsequently, Ward told Shait that he would no longer communicate with him directly regarding the arbitration or other Union-related matters. (Id. ¶ 58.)
On June I, 1999, Shriftman, without having conducted an evidentiary hearing, entered an award that adopted the Hotel's gratuity proposal. Shriftman found that the Hotel's proposal to pay gratuities only for social events, which the Hotel argued constitute 30% of the events on its schedule (a factual assertion disputed by the Union), was less economically onerous for the Hotel than adopting Schedule A-I would have been (O'Beirne Aff. Ex. A at 11.) Shriftman also found that the Hotel's proposal was less disruptive from a logistical perspective, because some club waiters might end up being displaced into job classifications (such as bartending and greeting, duties that had historically been performed by club waiters at the Hotel) that paid less under Schedule A-1. (Id.) Essentially, the arbitrator awarded the Union half a loaf, adopting the Hotel's proposal, which was more advantageous to the waiters than thestatus quo ante, but less advantageous than the immediate adoption of the full industry standard for which the Union had argued. In addition, the arbitrator implicitly retained jurisdiction to decide factual disputes about the implementation of his award, which, the Union argues in this Court, constitutes a significant advantage, permitting the Union to work on a case-by-case basis to expand the "social" events category and build a record supporting its view that the distinction is not meaningful.
Disappointed by the result, and pressed by the banquet waiters to take further action, Ward and various Union officials then decided to petition for an appeal to a three-arbitrator panel convened by the Office of the Impartial Chairman. The Union determined that such an appeal, if accepted by the panel, would be difficult to win, but would be preferable to seeking a vacatur of the award in federal court, because the appeal would be conducted under a de novo standard, rather than with the deference to the arbitrator's decision that a court would accord. The banquet waiters at the Hotel, including Shait, agreed with this strategy, (Ward Aff. ¶¶ 39-40) During the summer months, Peter Ward, the Union's President, personally lobbied the Hotel and hotel industry officials to allow the appeal to go forward. Eventually, management at the Hotel acquiesced, and the Office of the Impartial Chairman agreed to hear the appeal. (Id. ¶ 41.)
Shait claims that O'Beirne told him that the decision to seek a de novo review before the appellate panel "did not make sense." (Shait Aff. ¶ 45.) O'Beirne denies having made such a statement. (O'Beirne Aff. ¶ 38.)
On June 30, 1999, shortly after the arbitrator's decision, Union officials including Ward met with various of the Hotel's Club Dining waiters, who had "prepared a list of grievances and a booklet detailing ongoing problems and grievances of the Department." (Shait Aff. ¶ 66.) At the meeting, Shait claims, Ward told him that he "was difficult and that he had never had such trouble dealing with a delegate before." (Id. ¶ 67.) Ward also supposedly promised to set up a meeting between the Club Dining waiters and the Hotel's manager, Michael Littler. To date, no such meeting has occurred. (Id. ¶ 68.)
Following briefing, the arbitration panel heard oral arguments from the parties on December 28, 1999. O'Beirne presented the Union's case, and argued, among other things, that Shriftman had erred in failing to conduct an evidentiary hearing. (O'Beirne Aff. ¶ 36.) The panel proceeded to take the matter under submission, and reviewed the entire evidentiary record that the parties had presented to Shriftman. (Ward Aff. ¶ 42.) On May 1, 2000, a unanimous panel entered an award affirming Shriftman's earlier award. Among other things, the panel ruled that Shriftman did not abuse his discretion in failing to conduct an evidentiary hearing:
Chairman Shriftman was obligated to order an evidentiary hearing only if after a review of the documents and briefs he determined there was a factual dispute relevant to his deliberation. The decision makes clear that Chairman Shriftman was satisfied that all relevant issues were fully addressed by the parties in their submissions and arguments.
The Chairman's decision also reveals that he engaged in careful.il analysis and consideration of all the evidence. We find that all of the issues raised by the parties were amply discussed by Chairman Shriftman in his lengthy and carefully reasoned decision. No newly discovered evidence which placed the facts in dispute was shown.
(O'Beirne Aff. Ex. B.)
Subsequently, Shait requested that the Union commence an action in federal district court to vacate the two awards rendered in the Hotel's favor. (Shait Aff. ¶ 77 Ex. F.) After due consideration, however, the Union declined to file such an action. reasoning that interest arbitrations are extremely difficult to vacate under the deferential standard of review applied under federal law, and desiring not to undermine the integrity of the labor arbitration process by setting a precedent for future management attempts to vacate arbitration awards rendered in favor of the Union. (Ward Aff. ¶¶ 39, 43.)
Indeed, Ward avers that in the past decade, no judge in the Southern District has vacated an award entered by the Office of the Impartial Chairman. (Ward Aff. ¶ 19.)
II. Procedural History
On July 27, 2000, Plaintiffs filed an action in this Court against the Union and the Hotel. They alleged the following claims: (1) that the arbitration awards should be vacated because under the Federal Arbitration Act, 9 U.S.C. § 10, Shriftman and the appellate panel exceeded their powers by, among other things, failing to order/conduct an evidentiary hearing when disputed facts existed (Compl. ¶¶ 14-50); (2) the Union breached its duty of fair representation of the Club Dining waiters by, among other things, failing to bring an action in federal district court to vacate the adverse awards (Id. ¶¶ 51-87), and (3) the Union violated certain provisions of the LMRDA by preventing Plaintiffs from exercising free speech and assembly rights. Plaintiffs concomitantly moved for a preliminary injunction and sought certification of a class consisting of all individuals who have worked as Club Dining waiters at the Hotel since July 1, 1998. (Id. ¶ 88-97.)
At an initial status conference on August 14, 2000, Judge Chin noted that although Plaintiffs had structured their motion to vacate in an effort to obtain interlocutory relief, from a practical standpoint, any decision concerning the merits of their claims to vacate the above mentioned arbitration awards would conclusively resolve those claims. Accordingly, Judge Chin notified the parties that he would evaluate Plaintiffs' motion as a conventional motion to vacate, and he invited Defendants to cross-move to confirm the awards. The action was subsequently reassigned to me on September 5, 2000
On September 29, 2000, the Hotel moved to dismiss or, in the alternative, for summary judgment on the claims asserted against it in the complaint. On October 2, 2000, the Union answered and moved for judgment on the pleadings or, in the alternative, for summary judgment. Plaintiffs opposed Defendants' motions on November 9, 2000, cross-moved to vacate the arbitration awards and for summary judgment on their duty of fair representation and LMRDA claims, and also moved for leave to amend the complaint to assert additional LMRDA claims arising out of allegedly retaliator actions taken by the Union against Plaintiffs for bringing this action The Court heard oral argument on the pending motions on April 28, 2001.
DISCUSSION
I. Defendants' Procedural Defenses
Before turning to the merits of the parties' dispositive motions, the Court will briefly discuss various procedural defenses that have been interposed by Defendants. First, Defendants claim that Plaintiffs' duty of fair representation claims are time-barred because they were not commenced within six months of accrual, which Defendants contend occurred as early as May 1999 (when Ward requested that Shait cease his organizational activities). They also argue that Plaintiffs are precluded from bringing an action to vacate Arbitrator Shriftman's award, because, under both federal and New York law, they were required to commence an action to vacate the arbitrator's award within 90 days after it was rendered (See eg., Union's Mem. Supp. Summ. J. at 5-7.) However, given that Plaintiffs' duty of fair representation claims principally arise out of the Union's loss before Shriftman — and subsequently in a de novo appeal — it would elevate form over substance to suggest that Plaintiffs had to commence their action before determining that the Union's putative misconduct actually caused them harm, by causing the loss of the arbitration as a consequence of gross malfeasance by the Union. Moreover, Plaintiffs should not have been required to commence a vacatur action in federal court during the pendency of appellate arbitration proceedings — especially given that the arbitration appeal provided for a much more favorable standard of review than would have been applied by a judge in this District. The determinative date in this proceeding is the May 1, 2000, decision of the appellate arbitration decision, which Plaintiffs allege resulted from the Union's breach of its duties The action was commenced within 90 days of this decision, and is therefore timely
Second, the Union claims that three of the Plaintiffs lack standing to bring LMRDA claims, because, not being current with their dues payments, they are not, under the terms of the Union's By-Laws, members "in good standing" of the Union as is defined by 29 U.S.C. § 402(o). (Union's Mem. Supp. Summ. J. at 21.) The point is somewhat academic, in that the Union agrees that one of the Plaintiffs, Richard Austin, is current with his dues (id.), and thus the attack on the arbitration result, which is at the heart of the litigation, would go forward even if the point were well-taken. Moreover, the Union concedes that it has taken no action against the non-dues-paying Plaintiffs, and that they maintain full voting privileges and continue to receive benefits. (Union's Mem. Opp. Pls.' Motion for Leave to Amend Compl at 4) So even though the "suspensions" may exist on paper. they will not have any legal effect until and unless the Union actually punishes the members for non-payment of dues The Union has no apparent plan to do so, and, consequently, as a practical matter the Plaintiffs remain members and the defense lacks merit.
Third. the Union argues that the Plaintiffs are required to exhaust internal union remedies before bringing LMRDA claims in this Court. (Union's Mem. Supp. Summ. J. at 21-22.) The Court, however, is not required to dismiss the claims for failure to exhaust; rather, it may adjudicate them if it determines that either (1) "union officials are so hostile to the employee that he could not hope to obtain a fair hearing on his claim"; (2) "the internal union appeals procedures would be inadequate either to reactivate the employee's grievance or to award him the full relief he seeks", and (3) exhaustion of internal procedures would unreasonably delay the employee's opportunity to obtain a judicial hearing on the merits of his claim." Maddalone v. Local 17, United Bhd. of Carpenters and Joiners of America, 152 F.3d 178, 186 (2d Cir. 1998). There is some evidence that the Union might maintain an adequate grievance procedure in which Plaintiffs can prosecute their grievancesSee Ward Reply Aff. ¶¶ 10-15.) However, given that (as will be demonstrated) Plaintiffs' LMRDA claims are without merit, it would be futile to force Plaintiffs to exhaust the claims when they would ultimately be dismissed following internal Union proceedings.
II. The Parties' Cross-Motions for Summary Judgment
Turning to the merits of the parties' cross-dispositive motions, the Court observes that the Union. having answered Plaintiffs' Complaint, has alternatively moved for judgment on the pleadings, pursuant to Fed.R.Civ.P. 12(c), and for summary judgment, pursuant to Fed.R.Civ.P. 56(c) Similarly, the Hotel has alternatively moved to dismiss Plaintiffs' complaint for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6), and for summary judgment. Because all parties refer to evidence of record extrinsic to the pleadings in making their various arguments, the Court will evaluate Defendants' motions under the familiar summary judgment standard.
A. Summary Judgment Standard
Summary judgment may only be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The party opposing summary judgment "may not rest upon mere allegations or denials"; rather it must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). To defeat a motion for summary judgment, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp, 475 U.S. 574. 586 (1986). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) Similarly, a party cannot defeat summary judgment by "offering purely conclusory allegations," Meiri v Dacon, 759 F.2d 989, 998 (2d Cir 1985), or by offering evidence in opposition that is merely speculative. See Dister v. Continental Group. Inc., 859 F.2d 1108, 1116-1117 (2d Cir. 1988)
B. Plaintiffs' Vacatur Claims
Plaintiffs seek to vacate the awards rendered by Arbitrator Shriftman and the appellate panel, pursuant to the Federal Arbitration Act, 9 U.S.C. § 10, and New York law, N.Y. CPLR § 7506, arguing that Shriftman failed to conduct a full and fair hearing as a consequence of declining to hear the testimony of live witnesses. (Pls.'15. Mem. Supp. Summ. J. at 1-3.) They also argue that Shriftman, by making, among other things, erroneous factual findings about the Hotel's claims that 30% of its events could be classified as social in nature, "so imperfectly executed [his] powers that a mutual, final and definite award upon the subject matter submitted was not made." (Pls.' Mem Supp. Prelim. Inj at 13-17)
As the Hotel correctly notes (Hotel's Mem. Supp. Summ. J. at 21 n. 7), CPLR § 7506(f) does not require an evidentiary hearing to be conducted if the parties have waived their hearing rights — which essentially occurred in the instant case when the parties agreed to give the arbitrator the discretion to order one Plaintiffs argued during oral argument that any waiver of hearing rights by the Union was not validly effected. However, the cases they cite for this proposition are completely inapposite. Both Tray-Wrap, Inc. v. Six L's Packing Co., 984 F.2d 65 (2d Cir. 1993), and National Equipment Rental Ltd. v. Hendrix, 565 F.2d 255 (2d Cir. 1977), concern waivers of civil jury trial rights and do not in any way discuss whether a union may waive a right to an evidentiary hearing during the course of an arbitration proceeding.
For individual members of a union, such as Plaintiffs, to challenge an arbitration award rendered against the organization as a whole, they must first establish as a threshold matter that the Union breached its duty of fair representation to them during the course of the arbitration proceeding. If Plaintiffs cannot satisfy this requirement, they consequently lack the standing to seek the vacatur of a given arbitration award. Barr v. United Postal Service, 868 F.2d 36, 43 (2d Cir 1989) To prove that a union breached its duty of fair representation under Section 301 of the LMRA. members must demonstrate that the union acted so far outside a "wide range of reasonableness" with regard to the arbitration that its conduct can only be considered "arbitrary, discriminatory or in bad faith" Spellacy v. Airline Pilots Association-International, 156 F.3d 120, 126 (2d Cir. 1998) (internal quotations omitted). Mere tactical errors by the Union that resulted from "negligence or errors" in judgment do not rise to the level of a breach of duty of fair representation. Barr, 868 F.2d at 43.
Here, Plaintiffs make several arguments in an effort to demonstrate that the Union's conduct toward them constituted breaches of its duty of fair representation. First, they argue that Ward and other Union officials misled Club Dining waiters into believing that the Union would automatically be entitled to an evidentiary hearing at arbitration if disputed factual issues existed. Plaintiffs also claim that the Union breached its duty by failing to request a hearing before Arbitrator Shriftman. (Pls.' Mem. Supp. Prelim. Inj. at 22.) However, assumingarguendo the truth of these allegations, the Union's conduct does not even remotely approach the level of malfeasance necessary to constitute a breach of its duty of fair representation. Plaintiffs' argument seems to be premised on the mistaken assumption that an evidentiary hearing before Arbitrator Shriftman would somehow have guaranteed a more successful outcome, by enabling the Union, through the presentation of live witnesses, to remove any doubts from the arbitrator's mind about the efficacy of its gratuities proposal. In fact, however, the Union's conduct with respect to the evidentiary hearing issue represents a series of perfectly logical strategic choices that were well within the bounds of fair representation by a Union zealously representing its members' interests.
The Union denies having represented to its members that an evidentiary hearing would be mandatory in the event of an evidentiary dispute. (Ward Reply Aff. ¶ 3.) The Court nevertheless assumes for purposes of this summary judgment motion the truth of Plaintiffs' allegations. In any event, the allegations of misrepresentation are less than persuasive, given that the text of the MOU, which was concededly made available to the members, provided in the clearest possible language that the decision to hold a hearing lay within the sole discretion of the arbitrator. (Shait Supplemental Aff. Ex. G.) Given this fact, any assertion by Union leaders that the arbitrator would have no choice about conducting a hearing could not be taken by reasonable members as anything but a prediction of how the arbitrator would exercise his discretion.
At the outset, it must be recognized that the Union did not have it in its power to guarantee an evidentiary hearing. The discretionary language embodied in Section 22 of the MOU was the product of aggressive bargaining by the Union against the Hotel, which, as the Union's counsel represented at oral argument, initially resisted even the possibility of giving the arbitrator the authority to order an evidentiary hearing. Once the arbitration had begun, whether to hold a hearing was within the arbitrator's discretion. To the extent that the Union could have pressed the arbitrator more aggressively to hold a hearing, its decision not to do so was a rational tactical choice. The Union had presented a significant body of evidence in written form, most of which was undisputed by the Hotel. A reasonable litigator could well have concluded that the Union benefitted from not having a hearing, at which the Hotel would have been given a second opportunity to present factual information, and to challenge the Union's proof (which Arbitrator Shriftman stated he reviewed in its entirety) by cross-examination.
Second, Plaintiffs argue that the Union breached its duty by failing to move in this Court to vacate the arbitration awards. (Pls.' Mem. Supp. Summ. J. at 3-12.) This contention fails, however, because the Union has adduced numerous, entirely reasonable strategic bases for declining to commence a federal court action. The Union correctly observes that the chances of vacating an interest arbitration in this Court are extremely small, given the legal standard that applies to such an action. To vacate a labor arbitration award, as the Supreme Court recently held, a district court must find that the arbitrator "stray[ed] from interpretation and application of the agreement" such that he "effectively disperse[d] his own brand of industrial justice." Major League Baseball Players Ass'n v. Garvey, 532 U.S. ___, No. 00-1210, slip op. at 5 (May 14, 2001) (per curiam) (internal quotations omitted). Indeed, the Court further noted that "[w]hen an arbitrator resolves disputes regarding the application of a contract, and no dishonesty is alleged, the arbitrator's improvident, even silly factfinding, does not provide a basis for a reviewing court to refuse to enforce the award." Id. (internal quotations omitted) Arbitrator Shriftman, an experienced industry arbitrator, carefully compared the parties' proposals before adopting the Hotel's more incremental approach In the absence of a showing that Shriftman went so far beyond the purview of his authority as to engage in what would be tantamount to arbitral alchemy (which he clearly did not do, given that he was directed to choose between the competing proposals), the Court cannot second-guess Arbitrator Shriftman's reasoned award. Nor does the Court have the authority to review the arbitrator's discretionary decision not to order an evidentiary hearing. See British Ins. Co of Cayman v. Water Street Ins. Co. Ltd., 93 F. Supp.2d 506, 517 (S.D.N Y 2000) ("As long as an arbitrator's choice to render a decision based solely on documentary evidence is reasonable, and does not render the proceeding fundamentally unfair, the arbitrator is acting within the liberal sphere of permissible discretion.") (internal quotations omitted). In the nature of an interest arbitration, the arbitrator is empowered to decide what is a fair wage plan for the parties; such a matter is even less susceptible to meaningful judicial review than other forms of arbitration, in which the standard for judicial review is already extremely deferential. See Local 58, Int'l Bhd. of Elec Workers AFL-CIO v. Southeastern Michigan Chapter Nat'l Elec. Contractors Ass'n, 43 F.3d 1026, 1030 (6th Cir. 1996) (citing United Paperworkers Int'l Union AFL-CIO v. Misco, Inc, 484 U.S. 29, 37-38 (1987)).
Moreover, the Union also has a significant interest in maintaining the integrity of the arbitration system, so that management would not seek to undermine future pro-union awards by challenging them in federal district court. The Union cites numerous cases in which this Court has declined to overturn arbitration awards made by the Office of the Impartial Chairman (Union's Mem. Supp. Summ. J. at 11), and the Union contends that the stability of this arbitral system is in the long-term interests of its members. This is certainly within the range of views that could reasonably be adopted by a Union zealously pursuing its members' interests. Accordingly, the Court finds that the Union made a permissible tactical decision to forego commencing a federal court action. Such strategic decision making does not even remotely approach the gross misconduct necessary to give rise to a duty of fair representation claim.
Indeed, it would be folly to suggest that the Union did not aggressively litigate on its members' behalf during the arbitration process. Its counsel spent hundreds of hours preparing for the hearing, leading to the submission of detailed papers that included scores of documentary exhibits that Shait had prepared. (O'Beirne Aff. ¶¶ 25, 27-29, 31-33.) Also, the Union obtained a highly unusual de novo review of Arbitrator Shriftman's award. (Ward Aff. ¶¶ 39-40.) The overall record supports the conclusion that the Union fought aggressively for the waiters' position, and thus reinforces the conclusion that the decision not to bring a probably futile action to vacate the arbitration award was not the result of disloyalty to the banquet waiters or lack of stomach for a fight.
Third, Plaintiffs contend that the Union committed misconduct by failing to argue before Arbitrator Shriftman that the "Most Favored Nations" clause of the IWA required the Hotel to adopt Schedule A-1. (See Shait Aff. ¶ 36.) In the first place, the intrinsically tactical nature of the Union's decision to forego such a line of attack virtually insulates that decision from judicial review, courts are ill-placed to second-guess the quality of a union's actions in an arbitration by reviewing the tactical merits of every argument made and not made by the parties in their briefs. In any event, however, Plaintiffs' argument in this instance appears to be meritless, because that particular IWA clause apparently required management to receive favorable terms embodied in other collective bargaining agreements, and was therefore completely inapposite to the subject matter of the arbitration.
In pertinent part. the "Most Favored Nations" clause reads as follows:
The UNION obligates itself to enter into no contract whereby any person, firm or corporation operating a hotel in the City of New York shall receive any benefit or aid not accorded to the ASSOCIATION and EMPLOYERS pursuant to the terms of this Agreement.
(Shait Supplemental Aff. Ex. G.)
Fourth, Plaintiffs contend that Ward's ex parte contact with Arbitrator Shriftman in March 1999, inquiring about the timing of his decision, was the type of feckless conduct that could give rise to a duty of fair representation claim. (See Shait Aff. ¶¶ 38-40.) While Ward's decision may have been questionable under the circumstances, Plaintiffs present no evidence that the arbitrator's award in favor of the Hotel was influenced by Ward's telephone call. Moreover, even if the arbitrator reacted adversely to pressure from the Union to reach a prompt decision, Ward's possibly ill-advised inquiry hardly evidences a failure of fair representation. If it was a mistake to try to press the arbitrator, it was an error of excessive zeal, not of abandonment of the Union's members, and was manifestly not arbitrary, discriminatory or in bad faith.
Plaintiffs have failed to demonstrate that the Union breached its duty of fair representation of its constituent members during the course of the arbitration proceeding. Accordingly, they have no standing to challenge the arbitrators' decisions. Defendants' motion for summary judgment thus must be granted with regard to all of Plaintiffs' claims that seek vacatur of the arbitration awards.
C. Plaintiffs' LMRDA Claims
Plaintiffs separately contend that various conduct by Ward and other Union officials breached their free speech and assembly rights in violation of the LMRDA. (Pls.' Mem. Supp. Summ. J. at 17-23.) To maintain a viable claim under that statute, Plaintiffs must demonstrate that they were threatened with physical harm, a legal proceeding, or loss of membership benefits as a consequence of their organizational activitiesSee, e.g., Coomer v. Keller, 64 F. Supp.2d 266, 271-72 (S.D N.Y. 1999).
First, Plaintiffs claim that it was improper for Ward to seek a cessation of Shait's organizational activities at the Millennium Broadway Hotel and other hotels while the arbitration was sub judice before Arbitrator Shriftman. (Pls.' Mem. Supp. Summ. J. at 22.) While some of the language that Ward allegedly directed toward Shait was forceful and direct, Ward never made an explicit physical threat against Shait, nor does Shait plausibly allege that Ward's language put him in fear of physical violence. Nor did the Union threaten to either commence legal actions against Shait or punish him by withholding benefits and privileges attendant to union membership.
To the extent that Plaintiffs also style allegations regarding Ward's conduct as a duty of fair representation claim, the Court finds that the Union has proffered valid tactical reasons for Ward's pressing Shait to desist from his organizational activities. For example, as the Union notes, it would not have been in the members' best interests for Shait to have openly publicized to other hotels in New York City that the Millennium Broadway Hotel had refused to adopt Schedule A-1 of the IWA (Ward Aff. ¶¶ 35-36.)
Second, Shait claims that the Union punished him by precluding him from attending the arbitration hearing in May 1999 concerning certain labor practices at the Waldorf-Astoria Hotel. (Pls.' Mem Summ. J. at 22-23.) However, since Shait was not an officer of the Union, he was prohibited from attending by order of the arbitrator, who essentially ordered that Union delegates, such as Shait, other than those representing the Waldorf workers, could not be present. Whether or not the two members who were allowed to be present were both Union officers, the Union's failure to smuggle Shait into the Waldorf arbitration proceedings did not constitute an affirmative action against Shait that could give rise to an LMRDA claim.
Finally, Plaintiffs have moved for leave to amend their complaint to allege additional LMRDA claims that the Union has retaliated against them for commencing this action by expelling them from the Union, based on the Union's contention in its motion papers that three of them lack standing to bring the claims, because they are not "members" as a consequence of failing to pay union dues. Plaintiffs contend that this "expulsion" must constitute retaliation, since the relevant provision of the Union's By-Laws is rarely enforced, and since, until the issue was raised in this lawsuit, no adverse action was taken against them and they were treated by the Union as members. (Pls.' Mem. Supp. Summ. J. at 19.)
However, Plaintiffs' admission that they have not actually suffered tangible harm from litigating this action dooms their proposed claims. Plaintiffs do not deny that they can continue to vote in Union elections and otherwise enjoy all of the privileges and benefits of Union membership. Plaintiffs' proposed claim, therefore, arises out of nothing more than the Union counsel's unsuccessful effort to characterize Plaintiffs as being "suspended" by operation of the Union's By-Laws (so as to give rise to a standing argument), when in fact the members have not actually suffered any adverse consequence as a result of their non-payment of dues. There is no evidence that Plaintiffs have been "suspended" by the Union in any practical sense. Counsel's allegation that they have suffered a paper suspension by reason of non-payment of dues may have unfairly stigmatized Plaintiffs, but does not, as a matter of federal labor law, give rise to an LMRDA claim. Accordingly, because it would be futile to allow Plaintiffs leave to amend the complaint to allege a claim that cannot survive a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), Plaintiffs' motion is denied. See, e.g., Prudential Ins. Co. v. BMC Indus. Inc., 655 F. Supp. 710, 711 (S.D.N Y. 1987).
Plaintiffs also contend that the Hotel was responsible for paying the dues to the Union, and that the Union consequently cannot suspend them if, for example, they did not work during a particular period (and thus did not earn any salary from which the dues would be deducted). (Pls.' Mem. Supp. Summ J at 18.)
CONCLUSION
For the foregoing reasons, Defendants' motions for summary judgment are granted, and Plaintiffs' cross-motion for summary judgment is denied. Plaintiffs' motion for leave to amend the complaint is denied. The Clerk of Court is respectfully directed to enter judgment in favor of Defendants.
SO ORDERED