Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—S.D.N.Y.: Award in favor of hotel workers’ union confirmed, (Sep 8, 2025)

By Todd Harrison, J.D.

Contractual interpretation is firmly within the province of the arbitrator and courts must enforce any award in which the arbitrator is even arguably construing or interpreting the contract.

Denying a hotel’s cross motion to vacate two arbitral awards in favor of a hotel workers’ union, a federal district court in New York determined that contract interpretation was within the realm of the arbitrator and under the FAA it was required to give “strong deference” to the arbitrator’s decision. Rejecting the argument that two agreements separate from an industry wide collective bargaining agreement were terminable at will, the court noted that under New York law, a contract may supply an end date by implication even if its express terms do not mention one. The arbitrator applied that principle to the two agreements and found that both implicitly adopted the expiration date of the overarching CBA (White Pearl Hospitality LLC v. Hotel & Gaming Trades Council, AFL-CIO, No. 24-cv-3022 (RA) (S.D.N.Y. Sept. 5, 2025)).

In 2012, the Hotel Association of New York City entered into a collective bargaining agreement with the union, a labor organization representing various hotel employees in New York and New Jersey. The CBA was later extended through June 2026. The CBA provided that any disputes would be subject to arbitration.

Technological change. A provision in the CBA entitled “Technological Change” required hotel employers to meet with the union before implementing any technological improvements in order to discuss whether such changes would lead to layoffs and, if so, whether severance would be provided.

Additional agreements. At the time the CBA took effect, the hotel in this case was under different ownership. Over the years that followed, the union and the hotel entered into two additional agreements after the hotel sought to implement new technological changes to its facilities.

In 2013, the two parties agreed to permit the hotel to implement an automatic answering system in its phone system. The agreement expressly acknowledged that both parties were also parties to the CBA, and provided that any disputes regarding its terms would be subject to the same arbitration procedures set forth in the CBA.

Several years later, in 2019, the parties entered into another agreement after the hotel sought to implement a keyless entry system for guests. This agreement also acknowledged that both parties were also parties to the CBA. This new agreement permitted the hotel to implement the system so long as it would not result in any employee being laid off or having their hours reduced. It also purported to limit the hotel’s ability to rely on the CBA to implement additional technological changes to its facilities.

New telephone system. Two years later, the hotel was purchased by a different owner, which assumed all obligations under the CBA and all agreements supplementing it. In February 2024, the hotel notified the union that it planned to implement a new telephone system. The union responded that it was “improper and unlawful to unilaterally implement this New Technology absent agreement with the Union,” and asked for more information about the planned system.

Although the parties met twice to discuss the hotel’s plan, they were unable to reach an agreement. At the second meeting, the union produced copies of the 2013 and 2019 agreements and told the hotel it was prohibited from implementing the new phone system without the union’s consent.

After a month had passed with no further negotiations, the hotel notified the union that it had decided to “exercise its discretion” and “terminate” the 2013 and 2019 agreements. The hotel took the position that both agreements were terminable at will since neither specified an end date.

Arbitration. Subsequently, the union requested an emergency hearing on the hotel’s alleged violations of the 2013 and 2019 agreements. The arbitrator rejected the hotel’s arguments that the agreements were terminable at will and issued an award in favor of the union on May 2, 2024.

Layoffs. Around this same time, the hotel allegedly began requiring all of its customer service hosts who answer internal and switchboard calls to maintain daily call logs. Although the hosts initially complied, they eventually stopped maintaining the logs, purportedly on instructions from the union. The hotel the began laying off some of these employees, citing “redundancy and overstaffing.” The hotel maintained that the layoffs were unrelated to its proposed new phone system and insisted that the system had never been implemented.

Arbitration part two. Soon after the layoffs, the union requested another emergency hearing, alleging the hotel had violated the 2013 and 2019 agreements by terminating the employees. In July 2024, the arbitrator again issued an award in favor of the union. The hotel then filed this action seeking to vacate both awards and the union responded by filing a motion to confirm both awards. The court began with the hotel’s motion to vacate.

May 2024 award. In challenging the May 2024 award, the hotel asserted that it had the unilateral right to terminate the 2013 and 2019 agreements—and eliminate the restrictions on technological changes imposed in the 2019 agreement—because both contracts were of indefinite duration. The arbitrator rejected those arguments and found both agreements had incorporated the same expiration date as the CBA.

Here, the hotel argued that the arbitrator reached this conclusion in manifest disregard of the law and the award should be vacated. In its view, the arbitrator was not interpreting the agreements so much as “act[ing] like a legislator” by “creating” new contract terms out of whole cloth and inserting them into the agreements. The court was not persuaded.

When courts review awards under the FAA, “strong deference” is given to the arbitrator, and an award may be overruled only in very unusual circumstances. Arbitrators have particular leeway when it comes to construing the terms of a contract, explained the court, noting that contractual interpretation is firmly within the province of the arbitrator. As such, courts must enforce any award in which the arbitrator is even arguably construing or applying the contract and will do so as long as the arbitrator has provided a barely colorable justification for their interpretation of the contract. The award in this case cleared that bar and cannot be overruled, said the court.

Implied end date. Under New York law, a contract may supply an end date by implication even if its express terms do not mention one. Here, the arbitrator applied that principle to the 2013 and 2019 agreements and found that both implicitly adopted the expiration date of the CBA. The court found that this interpretation of the agreements was a plausible one and was supported by more than a “colorable justification.”

As to the hotel’s argument that the arbitrator created new obligations out of thin air, the court noted that the arbitrator did not reach his conclusion because he believed it to be fair or just or otherwise relied on non-contractual concepts. Rather, he inferred the termination date of both agreements from their actual terms, an exercise of contractual interpretation. Accordingly, the motion to vacate this award was denied.

July 2024 award. Turning to the July 2024 award, the hotel argued that the award contained three manifest errors: (1) that the 2013 and 2019 agreements remained in force; (2) that the 2019 agreement applied to the telephone system dispute; and (3) that the 2019 agreement excused the union from renegotiating the introduction of the new telephone system.

The court rejected the hotel’s first argument, finding it to be a re-hashing of its challenge to the May 2024 award. It also rejected the hotel’s argument that the 2019 agreement applied exclusively to the keyless entry system. That agreement purportedly limited the hotel’s ability to implement “any changes” under the CBA that would “increase workload or otherwise appreciably alter other terms and conditions of employment without the consent of the Union.” The natural reading of this language is that it applies to any future technological change, not just the keyless entry system, said the court.

Also rejected was the hotel’s argument that the arbitrator manifestly erred in ruling that the hotel could not compel the union to renegotiate in order to implement its proposed telephone system. Here, the court again deferred to the arbitrator’s construction of the relevant agreements. The arbitrator interpreted the agreements as effectively foreclosing the hotel from unilaterally enacting new systems that would result in the layoffs of employees. That interpretation finds a colorable basis in the text of the 2019 agreement itself, explained the court, denying the motion to vacate this award as well.

Award confirmed. Finally, the court granted the union’s motion to confirm the arbitral award, and to dismiss the complaint, noting that the denial of the hotel’s motions to vacate all but decide the remainder of the case.

The case is No. 24-cv-3022 (RA).

Judge: Abrams, R.

Attorneys: Steven M. Coren (Coren Law Group) for White Pearl Hospitality LLC dba Hyatt Centric Wall Street New York. Barry Neal Saltzman (Pitta & Giblin) for Hotel and Gaming Trades Council, AFL-CIO aka New York Hotel & Motel Trades Council, AFL-CIO.

Companies: White Pearl Hospitality LLC; Hyatt Centric Wall Street New York; Hotel and Gaming Trades Council, AFL-CIO; New York Hotel & Motel Trades Council, AFL-CIO

Cases: Labor Arbitration Layoffs UnionsMembers ContractClaims CoverageLiability NewYorkNews