Union v. Allied Cleaning and Maintenance Corp.
Service Employees International Union, Local 32BJ v. Allied Cleaning and Maintenance Corp.
- Analisa Torres
- 1:23-cv-08403
- U.S. District Court · Southern District of New York
- 2
In Service Employees International Union, Local 32BJ v. Allied Cleaning, Judge Gorenstein ordered briefing on enforcing an arbitration award against alleged alter egos.
The union and the defendants other than Allied Cleaning and Maintenance Corp. were affected because the court questioned whether those defendants could be held responsible for the arbitration award in this proceeding. Allied Cleaning was the only defendant identified as having been a party to the arbitration.
What happened
Service Employees International Union, Local 32BJ asked the court to confirm and enforce a labor arbitration award against Allied Cleaning and Maintenance Corp. and other defendants. Only Allied Cleaning was a party to the arbitration, while the union argued that the other defendants were its single employer or alter egos.
The court explained that a proceeding to confirm an arbitration award is not generally the proper proceeding to decide whether related companies should be treated as one entity. Existing case law says that enforcing an award against entities that did not participate in the arbitration may require a separate lawsuit to establish that responsibility.
The court ordered the union to address these issues in a letter or legal memorandum by April 16, 2024. Judge Gabriel W. Gorenstein did not decide whether the award could be enforced against the other defendants in this proceeding; he requested briefing about the proper procedure, jurisdiction, and whether the complaint gave notice of a separate monetary claim.
The detailed version
- Union v. Allied Cleaning and Maintenance Corp. · No. 1:23-cv-08403
- Analisa Torres
- Apr. 2, 2024
Background
The union brought an action seeking to confirm and enforce a labor arbitration award. The complaint named Allied Cleaning and Maintenance Corp. and other defendants. The opinion states that Allied Cleaning was the only defendant that had been a party to the arbitration proceeding.
The union argued that the other defendants were part of a single employer with Allied Cleaning and were alter egos—entities that could potentially be treated as responsible for another entity’s obligations. The opinion states that the union did not provide case law showing that the court could decide that issue in this proceeding.
Court’s analysis
The court relied on Second Circuit precedent holding that an action to confirm an arbitration award is not the proper time for a district court to pierce the corporate veil. The court also cited decisions stating that an arbitration award generally may not be enforced against defendants that were not parties to the arbitration in an action seeking to confirm the award. Those decisions indicate that a party seeking to hold an alleged alter ego responsible may need to bring a separate lawsuit to establish that liability.
Order
The court directed the union to address whether seeking to reach the alleged alter ego defendants in this action complies with that rule. If the union contends that confirming the award and obtaining a judgment against the alleged alter ego defendants can occur in one proceeding, it must provide supporting case law. The court also directed the union to address the basis for federal subject-matter jurisdiction over any separate, or “plenary,” action against the alleged alter ego defendants and whether the complaint gave notice of a separate claim seeking a monetary judgment against them.
The union may submit these arguments in a letter or memorandum of law by April 16, 2024. The opinion does not state that the court granted or denied a motion, and it does not decide whether the award may ultimately be enforced against the other defendants.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.