18‐2898‐cv 1199 SEIU United Healthcare Workers v. Alaris Health at Hamilton Park

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 17th day of September two thousand nineteen.

PRESENT: RICHARD C. WESLEY, DENNY CHIN, JOSEPH F. BIANCO, Circuit Judges. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

1199 SEIU UNITED HEALTHCARE WORKERS EAST, Petitioner‐Appellee,

v. 18‐2898‐cv

ALARIS HEALTH AT HAMILTON PARK, CONFIDENCE MANAGEMENT SYSTEMS, LLC, Respondents‐Appellants,

ATRIUM AT HAMILTON PARK, Intervenor‐Defendant‐ Appellant.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x FOR PETITIONER‐APPELLEE: KATHERINE H. HANSEN (Kent Y. Hirozawa, on the brief), Gladstein, Reif & Meginniss, LLP, New York, New York.

FOR RESPONDENTS‐APPELLANTS David F. Jasinski, Jennifer C. Van Syckle, AND INTERVENOR‐DEFENDANT‐ Jasinski, P.C., Newark, New Jersey. APPELLANT:

Appeal from the United States District Court for the Southern District of

New York (Rakoff, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

Respondents‐appellants Alaris Health at Hamilton Park (ʺHamilton Parkʺ)

and Confidence Management Systems, LLC (ʺCMSʺ) and intervenor‐defendant‐

appellant Atrium at Hamilton Park (ʺAtriumʺ) (collectively, ʺDefendantsʺ) appeal from

a judgment of the district court entered December 21, 2018 confirming an arbitration

award (the ʺAwardʺ), issued March 16, 2018, in favor of petitioner‐appellee 1199 SEIU

United Healthcare Workers East (the ʺUnionʺ). By memorandum order entered

September 4, 2018, the district court granted the Unionʹs motion to confirm the Award,

granted Atriumʹs motion to intervene, and denied Defendantsʹ motion to vacate the

Award and transfer venue. On appeal, Defendants principally argue that the district

court erred in confirming the Award because the arbitrator exceeded his authority

under the operative collective bargaining agreement (ʺ2008 CBAʺ), and, in doing so, the

‐2‐ arbitrator violated public policy. Defs. Appellantsʹ Br. at 2. We assume the partiesʹ

familiarity with the underlying facts, procedural history, and issues on appeal.

Hamilton Park provides long‐term care services in Jersey City, New

Jersey. Atrium provides assisted living services in the same building. The Union has

represented housekeeping, maintenance, and dietary employees at the location for

many years. Hamilton Park was a signatory to the relevant collective bargaining

agreements, and for years it applied the terms of the agreements to Atrium employees,

including remitting Union dues and health fund payments on their behalf. CMS began

managing the housekeeping department at the property in 2013 and signed an

assumption agreement with respect to the 2008 CBA.

A dispute arose after an ownership change in 2013. The new owner

stopped applying the 2008 CBA to the Atrium employees. The Union filed a grievance

and arbitration ensued, resulting in issuance of the Award.

We review a district courtʹs confirmation of an arbitration award de novo

on questions of law and for clear error as to its factual findings. Landau v. Eisenberg,

(2d Cir. 2019). There is a ʺstrong presumption in favor of enforcing

arbitration awards,ʺ and an award ʺshould be enforced, despite a courtʹs disagreement

with it on the merits, if there is a barely colorable justification for the outcome reached.ʺ

(internal quotation marks omitted); see United Bhd. of Carpenters & Joiners of Am. v.

Tappan Zee Constructors, LLC,

(2d Cir. 2015) (ʺ[A]s long as the

‐3‐ arbitrator is even arguably construing or applying the contract and acting within the

scope of his authority, that a court is convinced he committed serious error does not

suffice to overturn his decision.ʺ (internal quotation marks omitted)).

On review, we affirm the decision of the district court for substantially the

reasons set forth in its September 4, 2018 order. We add only the following. The 2008

CBA broadly authorizes the arbitrator to resolve grievances, defined as ʺa dispute with

regard to the application, interpretation or performance of an express term or condition

of the [2008 CBA],ʺ Appʹx at 385, except that he ʺmay not add to, subtract from, or

otherwise amend or modify the terms of th[e 2008 CBA],ʺ

. The arbitrator

determined that prior to the change in ownership in 2013, Hamilton Park and Atrium

were treated as a single employer; Atrium employees received the benefits of a previous

collective bargaining agreement that expressly referenced Atrium in the signatory

employers list; Hamilton Park continued to provide those benefits under the 2008 CBA

even though Atrium was omitted from the signatory employers list; and Hamilton Park

and CMS ʺviolated the 2008 [CBA], as extended by [his] 2012 Interest Arbitration

Award,ʺ by unilaterally removing Atriumʹs dietary, maintenance, and housekeeping

employees from the bargaining unit after the sale of the facilities. Appʹx at 268; see

Appʹx at 268‐70.

The arbitrator also concluded that Hamilton Park and Atriumʹs single

employer status continued after the sale because Hamilton Park and Atrium had

‐4‐ interrelated operations, common management, centralized control of labor relations,

and common ownership. The arbitratorʹs determination of who was bound by the 2008

CBA by virtue of the partiesʹ conduct was within the scope of his authority and an

arguable construction of the agreement. See IBJ Schroder Bank & Tr. Co. v. Resolution Tr.

Corp.,

, 374 (2d Cir. 1994) (ʺGenerally speaking, the practical interpretation of

a contract by the parties to it for any considerable period of time before it comes to be

the subject of controversy is deemed of great, if not controlling, influence.ʺ (internal

quotation marks omitted)).

In confirming the Award, the district court rejected each of Defendantsʹ

arguments claiming that the arbitrator exceeded his powers under the 2008 CBA. It

recognized that the Award was issued against the ʺEmployers,ʺ i.e., Hamilton Park and

CMS, and only imposes obligations on the two employers to apply the 2008 CBA to

employees of Atrium. The district court also observed that ʺsignatories to a collective

bargaining agreement cannot challenge the validity of arbitration proceedings simply

because a non‐signatoryʹs interests are implicated.ʺ Appʹx 630‐31 (citing Bedroc

Contracting LLC v. Mason Tenders Dist. Council of Greater N.Y. & Long Island, No. 06 Civ.

6399 (RMB),

(S.D.N.Y. Oct. 25, 2006); Vittoria Corp. v. New York Hotel &

Motel Trades Council,

(S.D.N.Y. 1998)).

Defendants make two additional arguments on appeal that warrant a brief

response: (1) the Award violates public policy by making the Union the bargaining

‐5‐ representative for Atrium employees; and (2) the Award does not draw its essence from

the 2008 CBA. See Intʹl Org. of Masters, Mates & Pilots v. Trinidad Corp.,

(2d Cir. 1986) (ʺIt would contravene public policy to confirm an arbitratorʹs award

enforcing a provision of a collective bargaining agreement violative of federal labor

law.ʺ);

(ʺAs long as the award draws its essence from the collective bargaining

agreement, the award generally should be confirmed regardless of any faulty factual or

legal conclusions reached therein.ʺ (citations and internal quotation marks omitted)).

The Award, however, only places obligations on Hamilton Park and CMS as to

employees who are part of the existing bargaining unit, in accord with federal labor

law, and the partiesʹ dispute arises under the 2008 CBA because the arbitrator was

tasked with interpreting the meaning of the partiesʹ omission of reference to Atrium in

the signatory employers list. Thus, these additional arguments fail.

* * *

We have considered Defendantsʹ remaining arguments and conclude they

are without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

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