Appeal from a judgment of the District Court for the Southern District of New York (Robert W. Sweet, Judge) vacating, on cross-motions for summary judgment, an arbitrator's ruling that the New York Hotel and Motel Trades Council, AFL-CIO, lacked authority to terminate employment of the arbitrator. Vacated and remanded for arbitration by a different arbitrator.
Before: VAN GRAAFEILAND, MESKILL, and NEWMAN, Circuit Judges.
JON O. NEWMAN, Circuit Judge:
This appeal concerns the arbitrability, under an industry-wide arbitration grievance procedure set up by a collective bargaining agreement, of a dispute about the grievance process itself. The appeal also presents the issue, rarely litigated, whether an arbitrator may resolve a grievance that requires him to interpret his own contract of employment to decide if he has been validly dismissed. Defendant-appellant Hotel Association of New York ("Association") appeals from a judgment of the District Court for the Southern District of New York (Robert W. Sweet, Judge) vacating, on cross-motions for summary judgment, an arbitrator's ruling that the New York Hotel and Motel Trades Council, AFL-CIO ("Council") lacked authority unilaterally to dismiss him from his position as arbitrator. We vacate Judge Sweet's judgment and order that the grievance be submitted to arbitration before a different arbitrator.
For decades a series of collective bargaining agreements have governed the relationship between the Association, comprising approximately 100 New York City employer hotels, and the Council, representing more than 25,000 New York City hotel employees. The collective bargaining agreement (the "Bargaining Agreement") currently in effect creates a procedure for arbitrating grievances and complaints. Paragraph 15 of the Bargaining Agreement broadly defines what disputes are arbitrable:
All complaints, disputes or grievances arising between the parties hereto involving questions of interpretation or application of any clause of this Agreement, or any acts, conduct or relations between the parties, directly or indirectly, which shall not have been adjusted by and between the parties involved shall be referred to a permanent umpire to be known as the Impartial Chairman, and his decision shall be final and binding upon the parties hereto.
Paragraph 15 specifies procedures for designating a replacement "should the Impartial Chairman resign, refuse to act, or be incapable of acting, or should the office become vacant for any reason": if the parties cannot agree to a successor Impartial Chairman within five days of the vacancy, the Chief Judge of the New York Court of Appeals shall make a suitable appointment upon application of either party to the Bargaining Agreement. The Bargaining Agreement is silent, however, as to the terms of employment or the identity of the Impartial Chairman.
In 1978 the Association and the Council appointed Millard Cass Impartial Chairman. A letter to Cass from the Association and the Council dated June 8, 1978, (the "Employment Association"), stated the terms and conditions of Cass's appointment. The Employment Agreement specified that it was to "continue for the duration of the [Bargaining Agreement] unless terminated sooner by either party, upon notice to the other of not less than sixty (60) days."
On June 2, 1986, Vito Pitta, as President of the Council, notified Cass and the Association that the Council was terminating Cass's appointment. He called upon the Association to meet and appoint a successor Impartial Chairman as mandated by paragraph 15 of the Bargaining Agreement. The Association, protesting that the Council's action was invalid under the Employment Agreement, took steps to have Cass arbitrate the questions whether he had been validly dismissed by the Council and whether the Office of Impartial Chairman was vacant.
On June 9, 1986, the Council filed this action in the Southern District of New York,*fn1 requesting (1) a temporary restraining order prohibiting Cass from continuing to act as Impartial Chairman and (2) a preliminary injunction compelling the Association to comply with the procedure for selecting a new Impartial Chairman. The dispute on the merits turned on the meaning of the phrase "either party" in the termination clause of the Employment Agreement. The Council claimed that "either party" referred to each of the two parties to the Bargaining Agreement; under this view the Council acted within its authority in terminating Cass's position without consent of the Association. The Association countered that "either party" referred to Cass on the one hand and to both of the two parties to the Bargaining Agreement on the other; under this theory the Council lacked authority unilaterally to dismiss Cass. The Association urged, in addition, that the dispute was arbitrable under paragraph 15 and therefore unsuitable for determination by the District Court.
Ruling from the bench after a hearing on June 20, 1986, Judge Sweet denied the preliminary injunction. He accepted the Council's theory that "either party" meant either the Council or the Association and that, therefore, the Council acted within its rights in terminating Cass's employment. However, finding that the requirement in the Employment Agreement of sixty days' notice of termination modified the five-day emergency appointment provision in paragraph 15, he concluded that no irreparable harm existed to justify a preliminary injunction.
Five days later, on June 25, 1986, Cass issued a lengthy report deciding the grievance identified as "Paragraph 15, Industry-Wide Agreement -- Does a vacancy exist in the Office of the Impartial Chairman." First, he determined that the dispute "over the meaning of the [Employment Agreement] is itself a dispute within the clear intent of Paragraph 15 of [the Bargaining] Agreement" and that "similarly, a dispute between them over whether there is a vacancy in the position of Impartial Chairman falls within those parameters." Second, noting the absence in the Bargaining Agreement of authority "for any other individual or forum to consider this matter ab initio " Cass found he was impelled by both his "authority" and his "duty" to "hear and decide this matter initially." And, finally, he concluded on the merits that the Bargaining Agreement required joint action by the Association and the Council to terminate his employment. Accordingly, he found no vacancy in the position of Impartial Chairman and made an award in favor of the Association.
Armed with its award, the Association returned to the District Court and sought confirmation and summary judgment dismissing the complaint. The Council cross-moved to vacate the award and sought summary judgment in favor of its complaint. Judge Sweet granted the Council's motions. He reaffirmed his earlier interpretation of the Employment Agreement, finding that the Council acted within its authority in dismissing Cass. And he held on principles of res judicata that his earlier decision precluded Cass's subsequent findings and award. The District Judge ordered the award vacated, directed the parties to select a successor Impartial Chairman, and on its own motion stayed the effect of the judgment until ...