ABM Industry Groups, LLC v. International Union of Operating Engineers, No. 19-2755 (2d Cir. 2020)Annotate this Case
ABM appealed the district court's denial of its motion to confirm an arbitration award and granting in part the union's motion to vacate the award, under Section 301 of the Labor Management Relations Act (LMRA). In this case, the arbitrator issued an opinion and award, concluding that two employees were not entitled to termination pay and directing them to repay certain amounts to ABM. The district court denied the motion to confirm the arbitrator's award, concluding that the award was ultra vires and unenforceable.
The Second Circuit held that the arbitrator did not exceed her authority because, under both agency law principles and federal labor law, the union possessed the authority to bind the employees to the arbitration award. The court stated that the district court plainly erred by reasoning that no precedent or authority supported the proposition that a union can bind its members to make payments ordered by an arbitrator under an arbitration agreement to which they were not signatories, following a process in which they did not participate. Rather, the court held that the record is clear that the employees did participate in the arbitration proceeding and the union possessed both agency and statutory authority to appear in the arbitration on their behalf.