Labor & Employment Law Daily Wrap Up, ARBITRATION—S.D.N.Y.: ACME Markets prevails against intellectually disabled employee it fired after customer complaint, (May 21, 2025)

By Jason Albright, J.D.

After the customer confronted the employee concerning the freshness of ACME’s bagels that day, the employee “put his arm around him in an effort to ‘make up.’”

ACME Markets, Inc. is entitled to confirmation of an arbitration award finding that it had just cause to fire an intellectually disabled man—who had worked at one of its grocery stores for 17 years—after concluding that the employee had placed a customer “in a headlock,” a federal district court in New York found. The employee—who could not recall the timeline of the incident and sought and was denied the presence of his mother at his union grievance meetings—lacked standing to vacate the award pursuant to New York C.P.L.R. § 7511(b)(1) because only his union and ACME were parties to the arbitration, the court found (Ragusa v. ACME Markets, Inc., No. 24-CV-5561 (CS) (S.D.N.Y. May 20, 2025)).

17 years in bakery department. The plaintiff, a 36-year-old intellectually disabled man whose mental capacity is approximately that of a third grader, according to the court, worked for ACME—the erstwhile A&P—in the bakery department of one of its supermarkets.

Union job. As an ACME employee, he was required to become a member of the union that represented employees at his store, and the terms and conditions of his employment were governed by the labor contract between ACME and the union.

Facilitation of mother. Because his disability could cause him to be forgetful, his mother, who has power of attorney, often facilitated his schedule and other logistics with the bakery manager. The employee maintained regular hours and a clean disciplinary record until May 8, 2023, when the incident giving rise to this dispute took place.

Confrontation regarding the day’s bagels. He alleged that, while he was working in the bakery that day, a regular customer confronted him about the freshness of that day’s bagels. The customer even allegedly shoved the bagels in the employee’s face.

Effort to “make up.” The employee did not touch the customer at that point. However, he alleged that, shortly thereafter, as he came across the customer again on his way out of the supermarket, he “put his arm around him in an effort to ‘make up.’”

Complaining customer. The customer ducked away, and though the customer did not file a written complaint, ACME claimed that he came back the next day and complained about the employee’s behavior.

“[H]eadlock” finding and discharge. After receiving the customer complaint, store administrators reviewed video footage capturing the incident. Based on the footage, they concluded that the employee had “put the customer in a headlock,” and they fired him.

Union grievance. The employee’s union representative filed a grievance challenging his termination, and a first grievance meeting was held between him, the union rep, and three store administrators.

Mother not allowed to attend meetings. The union rep asked that the employee’s mother be allowed to attend in light of his disability, but the manager refused, claiming that the employee’s disability was not proven. At the meeting, the employee could not recall the timeline of the incident or where in the store it took place.

A second grievance meeting was held on July 14, 2023, and ACME once again denied his mother permission to attend. At this second meeting, the employee was still unable to recall the details of the incident, but he declined ACME’s offer to review the video.

“Gross Misconduct.” After the second meeting, ACME sent the employee an official notice of termination. The termination notice cited “violation of company policy including Gross Misconduct in the Workplace.”

Arbitration. The union sought arbitration pursuant to the labor contract, which provided that employees could be terminated only for just cause and that disputes regarding termination could be submitted to arbitration.

“[J]ust cause.” After an arbitration hearing that took place virtually in December 2023, the arbitrator denied his grievance in February 2024, finding that his termination was supported by just cause. In making this determination, she analyzed the provision of ACME’s Associate Policy Handbook prohibiting violence in the workplace, including “assault unwanted physical contact.”

The arbitrator concluded that—regardless of whether the employee intended to put the customer in a “headlock” or otherwise to harm him physically—the employee subjected the customer to unwanted physical contact when he placed his arm around the customer’s shoulder and neck. Based on the policy’s plain language, Black’s Law Dictionary’s definition of “assault,” testimony from ACME officials, and past arbitration decisions interpreting the same policy, the arbitrator found that the employee had violated the policy. She further noted that the employee testified that he was aware of the policy and understood that “you can’t put your hands on a customer.”

Mother’s presence and ADA or due process issues? The arbitrator also considered the union’s argument that ACME’s refusal to allow the employee’s mother to attend the grievance hearings violated the Americans with Disabilities Act (ADA) and denied him due process.

Because the only issue before the arbitrator was whether ACME had just cause to terminate the employee—not whether ACME had committed a statutory violation—the arbitrator clarified that she only addressed this issue to the extent that it impacted the just cause analysis. Here, she found that ACME had the right to hear from the employee directly about his recollection of the incident, and that—especially considering that a competent union representative was present at both meetings to ensure that they were held fairly—ACME’s failure to allow the employee’s mother to be present at the meetings did not affect their outcome, rise to the level of a due process violation, or otherwise prejudice the employee.

Petition to vacate. In June 2024, the employee filed a petition to vacate and set aside the arbitration award in the New York Supreme Court for Westchester County.

ACME’s removal and motion to dismiss. ACME then removed the case to the U.S. District Court for the Southern District of New York and moved to dismiss.

No standing. The federal district court found that the former employee lacks standing to seek vacatur of the labor arbitration award. “While the arbitration was held to contest Petitioner’s termination,” the court observed, “only the Union and ACME – not Petitioner – were parties.”

Fair-representation issue? In his opposition, however, the former employee also raised several purported breaches of the union’s duty of fair representation, contending that the union did not submit his termination letter into evidence; failed to raise certain objections, including to the form or substance of hearsay testimony regarding the customer’s complaint; did not insist on his mother’s presence or otherwise sufficiently emphasize his disability at grievance meetings or the hearing; and consented to a virtual rather than an in-person hearing.

The court was unpersuaded. “Even assuming that the Union erred in making these decisions,” it observed, “‘tactical errors are insufficient to show a breach of the duty of fair representation; even negligence on the union’s part does not give rise to a breach.’” And instead, “the Complaint and its attachments demonstrate that Petitioner’s Union vigorously represented him and argued in good faith to challenge his termination.” The court noted that the union rep requested and attended two grievance meetings and filed for arbitration, and that the union’s counsel raised several arguments in the employee’s favor both at the hearing and in a post-hearing brief. “Petitioner’s dissatisfaction with the outcome of the arbitration and his disagreement with the Union’s strategic decisions cannot support a claim that the Union breached its duty of fair representation.”

As such,” the court concluded, “this exception to the standing requirement does not apply, and Petitioner’s claim must be dismissed.”

The case is No. 24-CV-5561 (CS).

Judge: Seibel, C.

Attorneys: Debra Palazzo (Law Offices of Debra Palazzo) for Frank A. Ragusa. Mark Andrew Saloman (Ford & Harrison) for Acme Markets, Inc.

Companies: Acme Markets, Inc.

Cases: Arbitration Labor UnionsMembers DisabilityDiscrimination Discrimination Discharge NewYorkNews