Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—D. Minn.: Union granted enforcement of arbitration award regarding accrual of PTO by unit employees, (Apr 15, 2026)

By Ronald Miller, J.D.

The employer cannot challenge the legitimacy of the arbitration award after failing to timely seek vacatur or modification of the award.

On cross-motions for summary judgment, a federal district court in Minnesota granted a union’s motion for summary judgment enforcing an arbitration award regarding the accrual of PTO by unit employees. The arbitrator concluded that the parties’ competing understanding of what constituted a “day” under the employer’s 2024 PTO Policy would “alternately be applied to each disputed absence.” Because the employer did not file any action to have the award vacated or modified, it was precluded from contesting whether the arbitrator ignored the parties’ contract or imposed his own brand of industrial justice. However, the employer was granted its motion for summary judgment, in part, finding that the award had no application after Dec. 31, 2024, because the employer adopted a new PTO policy that went into effect on January 1, 2025 (United Food & Commercial Workers, Local No. 663 v. Seneca Foods Corp., No. 25-cv-2891 (KMM/EMB) (D. Minn. Apr. 14, 2026)).

The employer, which processes fruits and vegetables, operates a frozen-food packaging and distribution facility in Rochester, Minnesota. The union represented the interests of approximately 166 employees who work at the facility. The union and employer are parties to a collective bargaining agreement that governs their relationship from February 1, 2024, through February 1, 2028.

PTO policy. The CBA contains provisions addressing union members’ paid time off (PTO). However, the CBA itself does not spell out the terms that apply to employees’ accrual and use of PTO. Instead, the agreement incorporates by reference a corporate PTO policy applicable to all employees.

In 2023, the Minnesota legislature enacted the Earned Sick and Safe Time Act (ESSTA). Among other things, the ESSTA provides a system by which Minnesota employees accrue earned sick and safe time and allows employees to use that accrued time for a variety of reasons, such as employees’ illnesses or their family members’ health care.

New state law. The employer determined that its previous approach to PTO was non-compliant with the ESSTA, so on January 1, 2024, it adopted the Minnesota State Paid Time Off Policy for Regular Employees (2024 PTO Policy). Under the 2024 PTO Policy, when an employee accrued PTO and sought to take a day off of work, she could redeem PTO so that she still got paid when she missed her shift.

However, the employer occasionally schedules employees to work mandatory overtime, meaning that its employees can sometimes be scheduled to work 10-hour or 12-hour shifts instead of a typical eight-hour day. This caused disagreement between the union and the employer about whether the 2024 PTO Policy required an employee who missed a day of work for an ESSTA-qualifying reason to use more than eight hours of PTO if she was scheduled to work a 10-hour or 12-hour shift that day.

2024 PTO Policy. The 2024 PTO Policy provides that each full day of paid MN PTO for regular non-exempt and exempt employees will be calculated at normal scheduled hours multiplied by the employee’s straight time hourly rate of pay. According to the union, if an employee took a day off for an ESSTA qualifying reason, she would only have to use eight hours of PTO to account for the absence, even if she were scheduled to work mandatory overtime that day. Under the employer’s interpretation, if the employee were scheduled to work a 12-hour shift, she would have to use 12 full hours of accrued PTO.

In April of 2024, the employer began implementing the 2024 PTO Policy based on its interpretation of what the policy required. After the employer adopted the 2024 PTO Policy, the union filed a grievance asserting that the employer “unilaterally changed the ‘day’ from 8 hours to all scheduled hours for purposes of ESSTA.”

On March 1, 2025, the arbitrator issued his decision concluding that unless the parties otherwise agree, the new PTO benefit will alternately be applied to each disputed absence occurring on or after April 29, 2024.

2025 PTO Policy. After the arbitration hearing, but before the arbitrator issued the award, the employer adopted a new PTO policy for its Minnesota employees, effective January 1, 2025 (2025 PTO Policy). In relevant part, the employer changed the language of its PTO policy to more clearly reflect its own view of how PTO must be used when an employee’s ESSTA qualified absence occurred on a day when she was scheduled to work more than eight hours.

Following the issuance of the arbitration award, the employer did not file any action to have the award vacated or modified. Instead, on July 16, 2025, the union filed this case seeking to have the award confirmed. In response, the employer denied that the union was entitled to confirmation of the award. It also filed two counterclaims. First, the employer asked the court to declare that there was no valid arbitration award to confirm. Second, if the award was deemed valid, it asked the court to declare it has no application after December 31, 2024, because the employer exercised its right under the CBA to adopt a new PTO policy when it promulgated the 2025 PTO Policy.

The union asserted that the arbitration award must be confirmed because the employer had until June 6, 2025, to file a motion to vacate the award but failed to do so. For its part, the employer argued that it was not required to take any step to vacate the arbitration award because the award was not a valid decision by the arbitrator resolving the parties’ disagreement about the meaning of the 2024 PTO Policy.

Decision on the merits. The court determined that the arbitration award in this case was a decision on the merits of the parties’ dispute. It resolved the grievance that the union filed challenging the employer’s application of the 2024 PTO Policy. That Policy stated only that each full day of PTO would be calculated at normal scheduled hours multiplied by the employee’s straight time hourly pay. But what constitutes a “day” is not defined, nor does the 2024 PTO Policy spell out how that provision should apply if an employee was scheduled to work more than eight hours on a day when she had to miss work. The union’s grievance asserted that the employer had unilaterally redefined what constituted a “day.”

The arbitrator issued a decision concluding that the parties’ competing understanding of those terms would “alternately be applied to each disputed absence occurring on or after April 29, 2024 (the date the grievance was filed) in a manner first consistent with the Employer’s view and then next with the Union’s view.” The parties got what they bargained for—an arbitral decision resolving the issue raised in the union’s grievance. Dissatisfied with that resolution, the employer should have filed a motion to vacate or modify the award.

The employer’s efforts to reframe the arbitrator’s decision as no decision at all were unavailing because they are the very arguments that it could have raised in a motion to vacate. Had the employer filed a timely motion to vacate, it could have argued that the arbitration award was improper because it “had no basis in the terms of the CBA.” In electing not to move to vacate the arbitration award, the employer assumed the risk that its inaction would preclude it from contesting whether the arbitrator ignored the parties’ contract or imposed his own brand of industrial justice. The consequence of the employer’s choice not to act is that it cannot now receive a declaratory judgment that would have the effect of vacating the arbitration award.

Accordingly, the court agreed with the union that the employer cannot now challenge the legitimacy of the arbitration award after failing to timely seek vacatur or modification of the award. As a result, the union was entitled to summary judgment on its confirmation claim.

Effect of award after December 31, 2024. The parties also disputed whether the arbitration award continues to govern the relationship between the parties, or whether it was superseded by the employer’s adoption of the 2025 PTO Policy. The employer argued that the arbitration award has no effect after December 31, 2024, because the company adopted the 2025 PTO Policy pursuant to its rights under the CBA, and the union failed to file a grievance regarding the adoption of that policy. For its part, the union argued that the arbitration award necessarily became a part of the CBA.

Dispute under consideration. Here, the court found that the employer had the better argument. First, the court concluded that the arbitrator was not asked to decide any dispute about the effect of the 2025 PTO Policy on future disputes arising under the CBA. The employer did not announce the 2025 PTO Policy until after the arbitration hearing had concluded. And there was no grievance relating to that policy (or the employer’s right to unilaterally implement it) before the arbitrator. The arbitration award did not mention the 2025 PTO Policy and nothing in the record suggested that the arbitrator had been asked in the parties’ post-hearing briefing to consider the effect of the 2025 policy.

Under these circumstances, the arbitrator could not have passed upon the meaning of the 2025 PTO Policy, nor could he have considered whether the employer acted within its rights under the CBA when it adopted the new PTO policy. Accordingly, the court found that because the union failed to file a timely grievance concerning the employer’s adoption of the 2025 PTO Policy, the employer was entitled to summary judgment on its counterclaim regarding the award’s application after December 31, 2024.

The case is No. 25-cv-2891 (KMM/EMB).

Judge: Menendez, K.

Attorneys: Emily Lacy Marshall (Miller O’Brien Jensen) for United Food & Commercial Workers Union, Local No. 663. Dean F. Pacific (Warner Norcross Judd) for Seneca Foods Corp.

Companies: United Food & Commercial Workers, Local No. 663; Seneca Foods Corp.

Cases: Labor Arbitration UnionsMembers EmployeeLeave MinnesotaNews