Bancroft Owners Inc. v. New York Hotel and Motel Trades Council, AFL-CIO

Background

Bancroft moved under the Federal Arbitration Act to stop an amended arbitration proceeding noticed by the New York Hotel and Motel Trades Council, AFL-CIO. The arbitration concerned Bancroft’s alleged repudiation, or rejection, of a collective bargaining agreement and its alleged failure to pay wage increases beginning July 1, 2020.

In 2013, Bancroft, acting through its non-party agent Associated Hotels and Motels of Greater New York and the Hotel Association of New York City, Inc. (Associated Hotels), entered into a collective bargaining agreement with the Union. The agreement was scheduled to expire on June 30, 2020. A 2015 memorandum of understanding between Associated Hotels and the Union extended the agreement through 2027.

The court had previously ruled that Bancroft consented in 2007 to being represented in multiemployer collective bargaining by the relevant association. It also ruled that Bancroft expressly authorized Associated Hotels to negotiate and bind it to a collective bargaining agreement, extensions, and successor agreements, and that Bancroft had not shown that it revoked that authorization. The court noted that Bancroft had followed the agreement for years by paying scheduled wages, making benefit-fund contributions, and submitting reports.

Arguments

Bancroft argued that the 2013 agreement had expired and that it was not bound by the 2015 extension because it had not authorized a third party to agree to that extension. It also argued that the 2007 authorization applied only to agreements between Associated Hotels and Local 6, Hotel, Restaurant and Club Employees and Bartenders Union, UNITE HERE, and not to the respondent Union or other affiliates. Bancroft further argued that its compliance with the 2013 agreement did not show that it intended to comply with the 2015 extension.

The Union argued that the motion duplicated Bancroft’s earlier motion, that an arbitrator should decide whether the agreement remained applicable, and that Bancroft had not met the standard for stopping arbitration. The Union stated that Local 6 had transferred its negotiating responsibilities to the Union as a successor in interest. It also pointed to Bancroft’s history of complying with the collective bargaining agreements, including provisions found only in the 2015 extension.

Ruling

The court denied Bancroft’s motion to stay arbitration. It found that the amended arbitration was not a new arbitration but an amended version of the earlier proceeding. Although the amended notice added the issue of unpaid wage increases, the court found that the central dispute remained Bancroft’s repudiation of the collective bargaining agreement.

The court held that Bancroft’s challenge depended on the validity of the agreement and whether Associated Hotels had authority to enter the extension—issues the court had already decided. The court concluded that the 2007 authorization covered an agreement and extensions or successor agreements with Local 6, which was represented by the Union, and that Associated Hotels and the Union had entered into both the 2013 agreement and the 2015 extension. Bancroft had provided no information warranting reconsideration and had not shown that it revoked the authorization in 2015.

The court also found that Bancroft acted vexatiously by filing a second, duplicative motion. The order denied the motion to stay, canceled the oral argument scheduled for March 2, 2021, instructed the Clerk to terminate civil case 20-cv-4914 and the open motion, and taxed costs and fees to Bancroft in the amount of $500.