New York Hotel and Gaming Trades Council, AFL-CIO v. Luxurban Hotels, Inc.

Background

New York Hotel and Gaming Trades Council, AFL-CIO petitioned to confirm two arbitration awards against LuxUrban Hotels Inc., formerly known as Corphousing LLC and doing business as The Blakely Hotel by LuxUrban. The first award, issued on October 4, 2023, required LuxUrban to pay $727,428.43 in severance payments: $489,928.43 in enhanced severance and $237,500 in statutory severance. The second award, issued on October 11, 2024, authorized the drawdown of a cash bond posted with the Office of the Impartial Chairperson and required LuxUrban to replenish the bond, including amounts used to satisfy the severance award.

The parties had entered into a December 2021 agreement providing that disputes would be resolved under the grievance and arbitration provisions of their industry-wide collective bargaining agreement. Those provisions made the arbitrator’s decision final and binding. After a hearing at which both parties were represented by counsel, the arbitrator found that LuxUrban had misrepresented its authority to bind Blakely to the agreement. The arbitrator concluded that LuxUrban was responsible for the severance payments under a theory that it had breached an implied warranty of authority.

LuxUrban did not respond to the petition, appear in the case, pay the awards, or move to vacate, modify, or correct them. The court therefore treated the unanswered petition as an unopposed motion for summary judgment. Under the Federal Arbitration Act, a court must confirm an arbitration award unless it has been vacated, modified, or corrected. The court’s review is highly deferential and does not reconsider the arbitrator’s decision on the merits; it asks whether the arbitrator acted within the authority granted by the parties’ agreement and provided at least a minimally plausible basis for the result.

Ruling on the Arbitration Awards

Judge Schofield granted the Petition to Confirm Arbitration. She confirmed both the Severance Award and the Drawdown Award because the dispute fell within the arbitration clause, both parties had participated in the arbitration, and LuxUrban had not challenged the awards. The court concluded that the awards had more than the minimally required justification and were supported by undisputed facts.

LuxUrban was ordered to pay the $727,428.43 required by the Severance Award. It was also ordered to replenish the cash bond posted with the Office of the Impartial Chairperson to the extent that the bond was drawn down to satisfy the Severance Award.

Attorney’s Fees and Costs

The court granted the request for reasonable attorney’s fees and costs for two reasons. First, LuxUrban had refused to comply with the arbitration awards without justification. Second, the parties’ 2023 agreement required the nonmoving party to pay reasonable fees and costs when an arbitration award was confirmed after the other party sought confirmation because of noncompliance.

The court did not set a final fee amount in the opinion. It directed the petitioner to submit an application by May 1, 2025, with timesheets, billing rates, descriptions of the work performed, and information about the attorneys involved. The court stated that reasonable fees would be granted based on that application.

Interest

The court awarded prejudgment interest at 9% per year from October 4, 2023, the date of the Severance Award, through entry of judgment. It also awarded post-judgment interest at the statutory rate under 28 U.S.C. § 1961, beginning when judgment is entered and continuing until payment.