1199SEIU United HealthCare Workers East v. PSC Community Services

Background

The dispute concerned an arbitration under Section 301 of the Labor Management Relations Act. The arbitrator found that the respondent home care agencies had violated wage-and-hour laws affecting more than 100,000 current and former union-member employees. The arbitrator ordered the agencies to make per-person contributions to a compensation fund that, once fully funded, would exceed $30 million and would be distributed to eligible claimants.

The union petitioned the court to confirm the arbitration award. Thirteen former employees of three respondent agencies—Employers Alliance for Health, the First Chinese Presbyterian Community Affairs Home Attendant Corporation, Inc., and the Chinese-American Planning Council Home Attendant Program—moved to intervene so they could seek partial vacatur of the award. They also moved to vacate the portions concerning them and certain other former employees. The respondents did not oppose confirmation.

Intervention and standing

The court held that the former employees could not intervene because they lacked Article III standing and did not show a sufficient interest under Federal Rule of Civil Procedure 24. The former employees were not parties to the arbitration and sought relief different from the union and the respondents. Under the governing precedent, an individual employee generally cannot challenge an arbitration between a union and an employer unless the employee shows fraud or deceit, a breach of the union’s duty of fair representation, or that the union failed to act on the award.

The court found that the former employees had not made any of those showings. It rejected their argument that the union lacked authority to represent employees whose employment ended before the 2015 memorandum of agreement. The court relied on its earlier ruling that the union had authority to enter the agreement and pursue arbitration on behalf of the bargaining unit, including the claims of those former employees.

The court also rejected arguments based on possible effects on separate wage-and-hour actions and potential class-certification motions. It found those alleged effects too remote and speculative to constitute a legally recognizable injury. The employees who had been carved out of the award were not bound by it, and confirmation would not prevent them from pursuing claims elsewhere. The court also ruled that prior state-court orders did not give the former employees a right to intervene under Federal Rule of Civil Procedure 71. In particular, the court said that observations in one prior order about the 2015 agreement were not part of the relief granted in that order.

Partial vacatur and confirmation

The court stated that, because the former employees lacked standing and could not intervene, their motion to vacate was moot. It nevertheless addressed their arguments and concluded that they lacked merit. The court explained that review of an arbitration award under the Labor Management Relations Act is highly deferential. A court generally confirms an award if the arbitrator was arguably interpreting or applying the parties’ agreement and acted within the scope of the arbitrator’s authority.

The court found that the award was thorough, rational, and supported by the arbitration record. The arbitrator had considered employee affidavits, the agencies’ financial records, evidence about pay practices, the parties’ factual stipulations, and the financial stability of the home care industry. The court also found that the arbitrator had reasonably selected a per-person contribution remedy after considering the parties’ stated goal of creating a fair and efficient process.

The former employees did not present arguments attacking the substantive merits of the award. Their arguments primarily repeated challenges to the arbitrator’s authority and to whether certain former employees’ claims were subject to arbitration. The court declined to revisit its earlier confirmation of the arbitrator’s jurisdictional ruling and rejected the argument that a pending appeal deprived it of jurisdiction over the amended petition to confirm the later award.

Disposition

The court denied the former employees’ motion to intervene for the purpose of seeking partial vacatur. It denied their motion to vacate the award in part. It granted the union’s amended petition to confirm the award. The court also denied a later request for leave to file three additional affidavits because the proposed affiants had not moved to intervene, the affidavits were filed after briefing had ended, and the former employees gave no persuasive reason to excuse the delay. The Clerk was directed to enter judgment, close pending motions, and close the case.