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Chelsea Grand LLC v. New York Hotel & Motel Trades Council

United States District Court, S.D. New York

March 23, 2017

CHELSEA GRAND LLC, Plaintiff,
v.
NEW YORK HOTEL & MOTEL TRADES COUNCIL, AFL-CIO, Defendant.

          OPINION & ORDER

          HONORABLE PAUL A. CROTTY, UNITED STATES DISTRICT JUDGE.

         Chelsea Grand LLC ("Chelsea") seeks an order vacating a 2016 arbitral award ("2016 Award") issued by the Office of the Impartial Chairperson ("OIC") in favor of the New York Hotel & Motel Trades Council, AFL-CIO (the "Hotel Workers Union"). Chelsea also seeks a declaratory judgment that it is not bound to any labor agreement with the Hotel Workers Union. The Hotel Workers Union cross petitions for confirmation of the 2016 Award and moves to dismiss Chelsea's declaratory judgment action.

         For the reasons set forth below, the Court denies Chelsea's petition to vacate the 2016 Award; grants the Hotel Workers Union's petition to confirm the 2016 Award; and grants the Hotel Workers Union's motion to dismiss the declaratory judgment action.

         BACKGROUND

          I. Prior Litigation and Relevant Agreements

          In February 2003, Chelsea entered into a Hotel Management Agreement ("HMA") with Interstate[1] for Interstate to act as the manager of Chelsea's hotel, the Four Points Hotel, located on West 25th Street in Manhattan. Chelsea Grand, LLC v. N.Y. Hotel & Motel Trades Council, AFL-CIO, 07 Civ. 2614 (PAC), 2014 WL 4813028, at *3 (S.D.N.Y. Sept. 29, 2014) ("Chelsea /"). On January 15, 2004, Interstate entered into a Memorandum of Agreement with the Hotel Wokers Union ("2004 MOA"). Id. at *6. In it, Interstate "agree[d] to be bound by the Accretion and Card Count/Neutrality provisions of the Memorandum of Understanding dated June 15, 2000 between the Union and the Hotel Association of New York City Inc. [("2000 MOU")]." Id. The 2004 MOA took retroactive effect on July 1, 2001 and had no expiration date. Id.

         The 2000 MOU modified the terms of the collective bargaining agreement-the Industry Wide Agreement ("IWA")-between the Hotel Workers Union and the Hotel Association of New York City ("HANYC"). See Id. at *2. The Card Count/Neutrality provision of the 2000 MOU was incorporated into the 2001 IWA as Addendum IV, and it sets forth the procedure for the Hotel Workers Union to try to organize the employees of a hotel to which the Hotel Workers Union does not have representational rights. See Id. at *2; Addendum IV, Declaration of Paul Rosenberg ("Rosenberg Decl.") Ex. 1 (Dkt. 7-1). Addendum IV also includes an arbitration clause, which provides that the Impartial Chairperson ("IC") "will resolve any and all disputes of any kind whatsoever arising out of this Agreement, or concerning the meaning or interpretation of any and all matters discussed herein." Addendum IV at 111.

         In 2007, the Hotel Workers Union sought to organize Chelsea's hotel pursuant to the Card Count/Neutrality provision. Chelsea Grand LLC v. N.Y. Hotel & Motel Trades Council, AFC-CIO, 629 F.App'x 152, 153 (2d Cir. 2015) ("Chelsea 7"). Chelsea resisted, and the Hotel Workers Union commenced an arbitration proceeding against Chelsea before the OIC. Id. at 153. The IC issued two awards finding Chelsea in violation of its obligations under the 2004 MOA, reasoning that Chelsea was bound to the 2004 MOA because it was a joint employer and principal to Interstate. Id.

         Chelsea then challenged the arbitral proceedings pursuant to New York Civil Practice Law and Rules ("N.Y. C.P.L.R.") Article 75. Chelsea /, 2014 WL 4813028, at *1. The action was removed to federal court, and this Court confirmed the arbitral awards, finding Chelsea bound to Interstate's commitments under theories of joint employer and apparent agency.[2]Chelsea I, 629 F.App'x at 154. Chelsea appealed, and the Second Circuit affirmed, explaining that the Card Check/Neutrality provision of the 2001 IWA was applicable to Chelsea Grand through the 2004 MOA. Id. at 155.

         II. 2008 Award

         While Chelsea I was pending, the IC conducted a card count and certified that a majority of eligible employees had designated the Hotel Workers Union as their collective bargaining representative. Hotel Workers Union Answer & Countercl. Ex. B (Dkt. 16-2). The Hotel Workers Union then made additional arbitration demands on Chelsea under Addendum IV, alleging unfair labor practices. Compl. (Dkt. 1) ¶ 21; Hotel Workers Union Answer & Countercl. (Dkt. 16) ¶ 21. After 11 days of hearings, supplemented by post-hearing and reply briefs, Chairperson Ira Drogin issued an award on April 14, 2008 ("2008 Award"). Compl. ¶ 24; Hotel Workers Union Answer & Countercl. ¶¶ 24, 74; Chelsea Answer (Dkt. 23) ¶ 74. Chairperson Drogin found in favor of the Hotel Workers Union with respect to certain unfair labor practice allegations, and against the Hotel Workers Union with respect to others ("2008 Award"). Compl. ¶ 24; Hotel Workers Union Answer & Countercl. ¶ 24.

         To remedy the effects of Chelsea's unlawful conduct, Chairperson Drogin directed Chelsea, among other things, to pay applicable employees "the minimum hourly wage rates, and fringe benefits ... contained in the Collective Bargaining Agreement between the Union and the Wingate Hotel, until the sooner of the execution of a Collective Bargaining Agreement between the Hotel and the Union, or the expiration date of the aforementioned Wingate Hotel Collective Bargaining Agreement." 2008 Award, Rosenberg Decl. Ex. 2 (Dkt. 7-2, 7-3) at 57-58. He also directed that Chelsea would "be bound by all of the other provisions of the [2001 IWA]" for the same duration of time. Id. at 58. With respect to these remedies, Chairperson Drogin "retain[ed] jurisdiction should there arise any dispute with regard to application, entitlement, or the amount due bargaining unit employees." Id.

         The 2008 Award was neither vacated nor confirmed.

          III. 2016 Award

         On December 7, 2015, the Hotel Workers Union tried to negotiate with Chelsea for a collective bargaining agreement, and served a Request for Information ("RFI") on Chelsea. Hotel Workers Union Answer & Countercl. ¶ 82; Chelsea Answer ¶ 82. Chelsea provided some but not all information requested in the RFI. Compl. ¶ 36; Hotel Workers Union Answer & Countercl. ¶ 83.

         On January 11, 2016, the Hotel Workers demanded arbitration regarding (1) Chelsea's "[f]ailure and refusal to produce documents and information requested by the Union, " and (2) Chelsea's failure and refusal "to honor obligations under [the 2008 Award], including but not limited to employee wages and benefits; instituting unilateral changes." Rosenberg Decl. Ex. 13 (Dkt. 7-14). A hearing was held on February 24, 2016 before the OIC, and Chairperson Drogin issued an award relating to these two issues on May 10, 2016 ("2016 Award"). Hotel Workers Union Answer & Countercl. ¶ 87, 91; Chelsea Answer ¶ 87, 91.

         A. Request for Information

         In the 2016 Award, Chairperson Drogin noted that Chelsea claimed "employee privacy" at the February 24, 2016 hearing as a reason for its refusal to provide the employee contact information requested by the Hotel Workers Union in its RFI. 2016 Award, Compl. Ex. 1 (Dkt. 1-1), at 3-4. Chairperson Drogin found Chelsea's argument to "border[] on being frivolous, " and stated in the 2016 Award that he ruled orally at the February 24, 2016 hearing "that such information was to be provided to the Union." Id. Chairperson Drogin also rejected in the 2016 Award Chelsea's argument that the requested information was not relevant. Id. at 4. Because Chelsea had not provided the requested information after the February 24, 2016 hearing, Chairperson Drogin directed Chelsea to pay the ...


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