ABM Industry Groups, LLC v. Service Employees International Union, Local 26

Background

ABM Industry Groups, LLC provides janitorial services and employs approximately 1,300 janitors covered by a collective bargaining agreement with Service Employees International Union, Local 26. The agreement provided sick days based on length of service and stated that employers would provide sick days required by an ordinance or statute within that law’s jurisdiction or application.

During the agreement’s term, Minneapolis and St. Paul adopted sick-leave ordinances requiring covered employees to accrue paid sick and safe time. The parties met to bargain about the ordinances but did not reach an agreement. ABM believed that neither ordinance applied to it and did not implement terms to comply with them. The Union filed a grievance alleging that ABM violated the collective bargaining agreement by failing to implement the ordinances and by requiring employees to use vacation and floating holidays for purposes other than their intended use.

The arbitrator denied the grievance in part and sustained it in part. He found that ABM did not violate the agreement by requiring employees to use holiday or vacation time for sick leave. He also found that ABM violated the agreement by failing to apply the Minneapolis and St. Paul sick-leave ordinances under the agreement’s sick-leave provision. The arbitrator directed ABM to comply with the ordinances as of July 1, 2017 and ordered qualifying St. Paul employees to begin accruing sick and safe time on that date.

ABM’s Motion to Vacate

ABM asked the court to vacate, or set aside, the arbitration award. ABM argued that the Union’s grievance was procedurally defective because it was filed before the ordinances took effect and did not identify the affected employees as required by the agreement. ABM also argued that the arbitrator failed to interpret the agreement’s language, ignored evidence about bargaining history and past practice, and relied instead on the ordinances and related state-court decisions.

ABM further argued that the arbitrator exceeded his authority by creating a new employment benefit. According to ABM, the arbitrator’s ruling conflicted with the agreement’s provision requiring the parties to bargain over changes needed to comply with legislation and with the provision barring the arbitrator from amending the agreement or establishing new terms and conditions of employment.

Court’s Analysis

The court applied the highly deferential standard governing review of labor arbitration awards. Under that standard, an award generally must be upheld if the arbitrator was at least arguably interpreting or applying the collective bargaining agreement and acted within the scope of the arbitrator’s authority. A court may not overturn an award merely because it believes the arbitrator made a serious legal or factual error.

The court rejected ABM’s procedural challenge. It found that the arbitrator had applied the agreement’s grievance procedure and had reasonably determined that the grievance was timely in relation to the ordinances’ effective dates. The court also accepted the arbitrator’s findings that the grievance contained enough information for ABM to investigate and respond and that the Union had provided an illustrative list of affected bargaining-unit employees.

The court also held that the award drew its essence from the collective bargaining agreement. The agreement expressly incorporated sick days mandated by applicable ordinances or statutes. In the court’s view, determining whether the agreement required ABM to provide the ordinance benefits necessarily required the arbitrator to examine the ordinances’ scope and application. The arbitrator’s use of external law to interpret the agreement did not make the award invalid.

The court further found that the arbitrator had considered ABM’s position on the merits. Even if the arbitrator had not discussed every argument about bargaining history or past practice, that omission was not enough to justify vacating the award under the deferential review standard. Finally, because the arbitrator interpreted the agreement as already requiring the ordinance benefits, the court concluded that he had not created a new employment term or nullified the agreement’s provision concerning legislative readjustments.

Disposition

The court denied Plaintiff’s Motion to Vacate an Arbitration Award and granted Defendant’s Motion for Judgment on the Pleadings. The court directed that judgment be entered accordingly.