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Unite Here Local 1 v. Hyatt Corp.

United States Court of Appeals, Seventh Circuit

July 6, 2017

Unite Here Local 1, Plaintiff-Appellee,
Hyatt Corporation, doing business as Hyatt Regency Chicago, Defendant-Appellant.

          Argued April 4, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. l:15-cv-04507 - Robert W. Gettleman, Judge.

          Before WOOD, Chief Judge, and Kanne and ROVNER, Circuit Judges.

          ROVNER, Circuit Judge.

         Defendant Hyatt Corporation, doing business as Hyatt Regency Chicago ("Hyatt" or the "hotel"), appeals the district court's entry of judgment on the pleadings in favor of plaintiff Unite Here Local 1 ("Local 1"), confirming the decisions of two arbitrators in Local l's favor. Unite Here, Local 1 v. Hyatt Corp., 2015 WL 7077329 (N.D. 111. Nov. 13, 2015). Hyatt contends that the matter is either moot or does not present an appropriate case for confirmation of the awards, and that the district court's decision to confirm the awards needlessly interjects the court into an ongoing set of disputes between itself and Local 1 that should be resolved by way of further arbitration. We disagree and affirm the judgment. The district court's modest action in confirming the awards places the court's contempt power behind the prospective relief ordered by the arbitrators, while reserving the merits of any pending or future grievances for arbitration. Indeed, Local 1 has conceded that any contempt petition would be based solely on the outcome of arbitrations post-dating the district court's confirmation order. Consequently, we are not convinced that the court's decision to confirm the two awards in any way undermines the parties' agreement to resolve their disputes through arbitration. We therefore affirm the district court's decision.


         The Hyatt Regency Chicago is a convention hotel with over 2, 000 guest rooms, five ballrooms, and between 80 and 100 meeting and event rooms. It employs approximately 1, 200 people, 850 of whom are hourly employees belonging to the union. Local 1 represents the members of the bargaining unit, who include door and bell attendants; switchboard operators; room, house, and public area housekeeping attendants; linen throwers and attendants; food and beverage hostesses, servers, bussers, cooks, bartenders, and cafeteria attendants; convention housemen; and various other workers. The size of the hotel's facilities and workforce enable it to host up to 10, 000 guests at a time and thus to handle some of the city's largest professional conclaves and other gatherings.

         Hyatt and Local 1 are parties to a longstanding collective bargaining agreement, the current version of which is effective from September 1, 2013 through August 31, 2018 (the "CBA" or "agreement"). Section 56 of that agreement prohibits the hotel's 140 managerial employees from performing work normally performed by bargaining-unit employees absent an emergency. R.l-1 at 48.[1] Section 46 of the CBA sets forth a multi-step grievance procedure for the resolution of disputes between the parties, and section 45 provides for the arbitration of any disputes over the interpretation or alleged violations of any terms of the agreement not resolved by the grievance procedure. In the second half of 2013 and the first part of 2014, there were a number of incidents in which managers performed bargaining-unit work in circumstances that Local 1 did not regard as emergencies. The union took two sets of grievances on that subject to arbitration in the Fall of 2014, both of which resulted in awards in Local l's favor.

         In an award dated February 2, 2015, arbitrator George R. Fleischli found that Hyatt had violated section 56 by permitting managers to perform work normally done by housemen in the convention services department of the hotel. Housemen perform the tasks necessary to set up meeting rooms and ball rooms for the particular types of events scheduled for those rooms: they bring the appropriate types of tables into the rooms, arrange chairs around them, place linens on the tables if necessary, establish water and refreshment stations, and set up any podiums, stages, or dance floors that might be required. When an event has concluded, they then break down the room and set it up for the next event. Local 1 alleged that on some 17 occasions from September 2013 through June 2014, supervisors took on tasks that they should have left to housemen, including: setting up tables, replacing tables that had already been set up, straightening or adjusting chairs, placing drinking glasses on tables, setting up or moving special "highboy" cocktail tables, breaking down tables, stacking chairs, cleaning up trash, and so forth.

         As a threshold matter, arbitrator Fleischli rejected the hotel's dual contentions that there was an established practice of "shared work" between housemen and supervisors that envisioned them both working side by side as necessary to set up and break down event rooms and, relatedly, that the individuals supervising housemen were "working supervisors" whose job responsibilities included pitching in as necessary to complete tasks. The evidence, in the arbitrator's view, simply did not support the existence of a consistent practice in either respect. (In the concluding section of his decision, he did allow that there had been lax enforcement of section 56 in the convention services department of the hotel for many years which had effectively permitted supervisors in that department to violate the rule unchecked.)

         On examining the terms of section 56, arbitrator Fleischli concluded that it was not self-evident what constituted an "emergency" that would permit supervisors to step in and perform tasks that were otherwise assigned to housemen. He rejected Hyatt's contention that the term should be defined simply as a set of unforeseen circumstances. Having weighed the parties' competing arguments on this point, Fleischli concluded that an "emergency" was properly defined as unforeseen circumstances that require immediate action, including in particular the need for the hands-on intervention of supervisors when bargaining-unit members are not reasonably available to take care of the urgent task at hand.

         Ultimately, arbitrator Fleischli found that the union's grievances were arbitrable (i.e., properly preserved and presented for decision) as to five of the incidents cited, and he concluded that Hyatt had violated section 56 in three of those incidents. The proven violations were relatively minor, in his view, but at least in the first two of the incidents, they were not de minimis. Fleischli declined to order make-whole relief in the form of backpay given the history of lax enforcement of section 56 in the department, but he did order Hyatt to cease and desist from further violations of section 56 and to take such steps as were necessary to ensure that hotel managers complied with the provision in the future.

         In a second award dated March 1, 2015, arbitrator Ann S. Kenis likewise found that Hyatt had violated section 56 on multiple occasions. Arbitrator Kenis addressed a broader range of circumstances than had her colleague. She was presented with two grievances. The first involved supervisors doing work normally performed by bell attendants (also know as bellmen), including the receipt and storage of guest luggage, retrieving checked bags for guests, and loading luggage into guest vehicles. These incidents occurred in the Fall of 2013. The second, more general grievance involved bargaining-unit employees from multiple hotel departments and was based on supervisors performing any number of tasks (beginning on or about March 13, 2014 and continuing thereafter), including: cleaning (e.g., mopping or sweeping floors, using mechanical ride-on "chariots" to clean ballroom or public area carpets, cleaning the front doors of the hotel, and emptying trash cans in public areas); serving guests in the hotel restaurants, cafe, and employee cafeteria (e.g., seating guests, pouring drinks, making coffee, bussing tables, stocking the buffet, handing out condiments, working the cash register, wiping counters); transporting food, beverages, and dishes to and from ballroom banquets; loading soiled linens into the hotel laundry chute; and helping to clear rooms after events (e.g., picking up trash, removing special items like ice sculptures, and so on).

         Upon review of the evidence and the parties' arguments as to the proper construction of section 56, arbitrator Kenis agreed with arbitrator Fleischli as to certain key points. First, she found insufficient evidence to support Hyatt's contention as to a practice of shared work responsibilities between bargaining-unit employees and their supervisors or as to a practice of "working supervisors" who routinely pitched in to help the line employees they supervised. Second, she agreed with her colleague that the term "emergency" connotes more than just unforeseen circumstances, as Hyatt had suggested. Kenis noted that in the arbitration context, another arbitrator's interpretation of "emergency" was neither conclusive nor binding upon her. Yet, she believed that she should not disregard arbitrator Fleischli's reasoning absent substantially altered circumstances, which Hyatt had not established. In that regard, arbitrator Kenis noted that although Hyatt had attempted to convince her that there was a longstanding, uniform practice of managers doing bargaining-unit work whenever unforeseen circumstances presented themselves, she regarded the hotel's proof on that point as being even weaker than the evidence presented to arbitrator Fleischli. Arbitrator Kenis therefore adopted her colleague's definition of emergency.

         Turning to the evidence presented to her, arbitrator Kenis found that there were only a few genuine emergencies involving unforeseen circumstances coupled with a need for immediate action: One involved a pipe leaking water into a ballroom; the second involved a large professional conference and a shortage of staff members to handle all tasks despite management's efforts to summon additional workers; and the third involved scraping gum from pavement at the entrance to the hotel immediately prior to a VIP's arrival. Beyond those incidents, Hyatt had either failed to establish that there was a genuine emergency requiring immediate action as it claimed, or the facts showed that supervisors were simply pitching in to perform mundane, bargaining-unit tasks as a matter of course (in some instances, for hours at a time) without first ascertaining whether there was a bargaining-unit employee available to handle the task in question.

         Arbitrator Kenis thus concluded that Hyatt had transgressed section 56 in all but the isolated instances in which she found there had been a true emergency. She rejected the hotel's suggestion that the violations were de minimis, reasoning that even if that characterization applied to certain individual incidents, "there is a cumulative pattern shown on this record that requires a remedy." R. 1-3 at 50. In this respect, she viewed the evidentiary record as being significantly different from the one presented to arbitrator Fleischli. Arbitrator Kenis therefore concluded that make-whole relief in the form of backpay (at an overtime rate) was appropriate to compensate the union for the time supervisors had spent performing bargaining-unit tasks. Like arbitrator Fleischli, she also ordered Hyatt to cease and desist from future violations of section 56.

         Hyatt allowed 90 days to pass without filing a petition to vacate either of the awards in federal court;[2] the union, however, pursuant to section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), filed a petition in the district court to confirm the two awards. In its complaint, the union alleged that Hyatt "has failed and refused and continues to fail and refuse to comply with or otherwise be bound by" the Fleischli and Kenis awards. R. 1 at 3 ¶¶ 16, 18. In support of that contention, Local 1 cited some 41 examples of managers allegedly performing bargaining-unit work in February through May of 2015, after the two arbitrators had ordered Hyatt to cease and desist from further violations of section 56. R. 1 at 3-7 ¶ 19. (These incidents constitute the same alleged 41 violations of section 56 pending between the parties, and working their way through the contractual grievance and arbitration procedure, that we refer to elsewhere in this opinion.)

         The parties filed cross-motions for judgment on the pleadings, and Judge Gettleman ultimately granted judgment on the pleadings in favor of Local l.[3] Among other things, he noted that Hyatt had not timely challenged the awards, rendering them final and beyond review. 2015 WL 7077329, at *2 n.l. In any case, he reasoned, the awards drew their essence from the CBA and were therefore valid. Id., at *2. He rejected Hyatt's contention that confirmation of the awards was foreclosed by this court's decisions in United Elec. Radio & Mach. Workers of Am. v. Honeywell Inc., 522 F.2d 1221, 1225-27 (7th Cir. 1975), and Local 1545, United Mine Workers of Am. v. Inland Steel Coal Co., 876 F.2d 1288, 1294-97 (7th Cir. 1989). He pointed out that the unions in those cases were attempting to bypass the arbitration process and give prospective effect to arbitration awards that contained only backward-looking, make-whole remedies. This court held that a union could do this only if it met certain criteria. The arbitration awards in this case, by contrast, expressly granted prospective relief in the form of cease-and-desist orders. "Nothing in Honeywell or Inland Steel suggests that an arbitration award granting prospective relief cannot be confirmed, " Judge Gettleman reasoned. "Indeed, they both suggest just the opposite." 2015 WL 7077329, at *3 (N.D. 111. Nov. 13, 2015).

         Hyatt filed a motion to stay the district court's judgment pending appeal. Hyatt raised two principal concerns about the court's order of confirmation. First, to the extent the order was viewed as an injunction (in that it confirmed the cease and desist commands entered by the arbitrators), the order gave Hyatt no notice of the duties imposed on it-i.e., no description of the particular acts from which Hyatt was obligated to refrain. Essentially, the court, like the arbitrators, had merely told Hyatt, "Do not violate the contract." Hyatt was concerned that the lack of specifics placed it at undue risk of contempt sanctions. Second, in Hyatt's view, confirmation of the two awards had given the union the means to bypass the grievance and arbitration procedure set forth in the CBA by enabling the union to seek contempt sanctions for new violations of section 56. Rather than seeking a determination from an arbitrator as to new grievances, the union could simply seek a contempt finding from the district court. Given the nature of the hotel's business-including the variety of events it hosted, guest demands, and the unforeseen circumstances that may occur-Hyatt anticipated that the parties might be in front of the court on a regular basis.

         At the hearing on Hyatt's motion, both the district court and the union contradicted the twin premises of the request for a stay. The district court pointed out that it had entered no injunction. It had done no more than confirm the two arbitration awards. To the extent Hyatt believed the cease-and-desist aspects of those awards gave it insufficient guidance as to what specific acts were prohibited, that would be a matter for the court to consider at a later contempt proceeding. Secondly, the court rejected the notion that confirmation gave the union license to bypass arbitration and bring future grievances directly to court by way of a contempt petition. The union's counsel expressly agreed with the court: Any pending and future grievances would be resolved by way of arbitration, she represented. The union had no immediate plans to file a contempt petition, and any such petition would be based on the outcome of future arbitrations post-dating the confirmation of the Fleischli and Kenis awards. R. 54.

         With those points having been clarified, Hyatt withdrew its stay motion without prejudice. It proceeded with this appeal, ...

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