Trustees of the Laundry, Dry Cleaning Workers and Allied Industries Health Fund, Workers United v. FDR Services Corp. of New York

Filing 142

OPINION AND ORDER re: 137 CROSS MOTION to Confirm Arbitration Award filed by Alberto Arroyo, Wilfredo Larancuent, Laundry, Distribution and Food Service Joint Board, 134 MOTION to Vacate Arbitration Award filed by FDR Services Corp. of New York. FDR's motion to vacate the Final Award is DENIED. (Doc. #134). The Union Defendants' motion to confirm the Final Award is GRANTED. (Doc. #137). The third-party complaint is dismissed. By February 23, 2024, counsel for all parties shall file a joint case management report on the docket of this case ("Laundry I") and on the docket of Trustees of the Laundry, Dry Cleaning Workers and Allied Industries Retirement Fund, Workers United v. FDR Services Corp. of New York, No. 17-cv-8 353 (S.D.N.Y. filed Oct. 30, 2017) ("Laundry II"), not to exceed three pages, setting forth the parties' proposal for how Laundry I and Laundry II should proceed now that the third-party action in Laundry I has been dismissed. In addit ion, on March 5, 2024, at 11:30 a.m., the Court will conduct a case management conference in both Laundry I and Laundry II in Courtroom 620 at the White Plains Courthouse to discuss how the two cases should proceed. The stay of proceedings previously entered in Laundry I and Laundry II is vacated. The Clerk is directed to terminate the pending motions. (Docs. ##134, 137). SO ORDERED. Case Stay Lifted. (Case Management Conference set for 3/5/2024 at 11:30 AM in Courtroom 620, 300 Quarropas Stree t, White Plains, NY 10601 before Judge Vincent L. Briccetti.) Wilfredo Larancuent, Laundry, Distribution and Food Service Joint Board, Alberto Arroyo and FDR Services Corp. of New York terminated. (Signed by Judge Vincent L. Briccetti on 2/9/2024) (mml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------x
TRUSTEES OF THE LAUNDRY, DRY
:
CLEANING WORKERS AND ALLIED
:
INDUSTRIES HEALTH FUND, WORKERS
:
UNITED; TRUSTEES OF THE LAUNDRY,
:
DRY CLEANING WORKERS AND ALLIED
:
INDUSTRIES RETIREMENT FUND,
:
WORKERS UNITED; and TRUSTEES OF
:
THE LAUNDRY AND DRY CLEANING
:
WORKERS EDUCATION AND LEGAL
:
ASSISTANCE FUND,
:
Plaintiffs,
:
v.
:
:
FDR SERVICES CORP. OF NEW YORK,
:
Defendant.
:
--------------------------------------------------------------x
FDR SERVICES CORP. OF NEW YORK,
:
Third-Party Plaintiff,
:
v.
:
:
LAUNDRY, DISTRIBUTION, AND FOOD
:
SERVICE JOINT BOARD; and ALBERTO
:
ARROYO and WILFREDO LARANCUENT,
:
as Union Trustees of the Laundry, Dry Cleaning :
Workers and Allied Industries Health Fund,
:
Workers United and Officers of the Laundry,
:
Distribution and Food Service Joint Board,
:
Third-Party Defendants.
:
--------------------------------------------------------------x

OPINION AND ORDER
17 CV 7145 (VB)

Briccetti, J.:
FDR Services Corp. of New York (“FDR”) brings this third-party action against
defendants the Laundry, Distribution, and Food Service Joint Board (the “Union”); Alberto
Arroyo; and Wilfredo Larancuent (collectively, the “Union Defendants”), claiming the Union
Defendants failed to process waivers signed by FDR employees opting out of health insurance
coverage that would have reduced the amount of allegedly delinquent contributions for which
1

FDR is being sued in the main action brought pursuant to the Employee Retirement Income and
Security Act of 1974 (“ERISA”) by plaintiffs Trustees of the Laundry, Dry Cleaning Workers
and Allied Industries Health Fund, Workers United (the “Health Fund”); Trustees of the
Laundry, Dry Cleaning Workers and Allied Industries Retirement Fund, Workers United; and
Trustees of the Laundry and Dry Cleaning Workers Education and Legal Assistance Fund
(collectively, the “Funds”). In the main action, the Funds seek to compel FDR to submit to an
audit and pay purportedly delinquent and outstanding contributions to the Funds.
Before the Court is FDR’s motion to vacate an arbitration award dated February 1, 2023,
issued by Arbitrator Hezekiah Brown, Esq. (the “Arbitrator”), denying FDR’s third-party claims
against the Union Defendants (Doc. #134), and a cross-motion by the Union Defendants to
confirm the award. (Doc. #137).
For the following reasons, FDR’s motion to vacate is DENIED, and the Union
Defendants’ motion to confirm is GRANTED.
The Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1367.
BACKGROUND
The following factual background is drawn from the parties’ submissions in support of
and in opposition to the pending motions, as well as the third-party complaint (Doc. #62) and this
Court’s Memorandum Opinion and Order dated August 28, 2019. (Doc. #91 (the “Order
Compelling Arbitration”)).
I.

FDR’s Third-Party Claims
In the third-party complaint, FDR asserts claims against the Union Defendants for

contribution and breach of fiduciary duties under ERISA and the common law.

2

FDR operated a commercial laundry facility in Paterson, New Jersey, from 2005 to 2016
and opened an additional facility in Hempstead, New York, in 2013. The Union represented
production workers and drivers employed at both facilities pursuant to a Collective Bargaining
Agreement, effective from May 1, 2013, through April 30, 2016 (the “CBA”). Union Defendants
Arroyo and Larancuent were Union representatives and trustees who would visit the facilities to
address employee grievances and negotiate with FDR on behalf of covered employees.
In 2017, the Health Fund audited FDR’s contributions under the CBA and determined
FDR failed to remit approximately $300,000 of contributions for covered employees. The Funds
sued FDR pursuant to ERISA to collect it.
In the third-party complaint, FDR alleges the Union Defendants failed to forward to the
Health Fund thirty-nine forms in which new hires waived Health Fund coverage. Thus, FDR
claims any failure to pay contributions for these thirty-nine individuals is the Union Defendants’
fault because, if those waivers had been properly submitted, it would have relieved FDR of its
obligation to contribute on these employees’ behalf. Accordingly, FDR contends the Union
Defendants are liable for approximately $150,000 of the allegedly delinquent contributions.
II.

Motion to Compel Arbitration
On December 7, 2018, the Union Defendants moved to compel arbitration of, or in the

alternative, to dismiss, the third-party complaint. The Court granted the motion to compel and
denied the motion to dismiss on August 28, 2019.
In the Order Compelling Arbitration, the Court summarized FDR’s position opposing
arbitration as follows:
FDR argues the Union’s alleged failure to forward signed employee waivers to the
Health Fund breached a practice beyond the scope of the CBA—i.e., was not a
breach of the CBA itself. Further, according to FDR, the CBA provides only for
FDR’s obligation to make contributions to the Health Fund and does not address
3

the mechanics by which the Union and FDR ensured that the Health Fund received
the information necessary to enroll employees in the Fund.
(Order Compelling Arbitration at 5–6). The Court concluded “FDR’s interpretation of the
arbitration clause is too narrow,” because “the parties dispute whether the CBA requires FDR to
contribute to the Health Fund on behalf of employees who waived coverage—a dispute that
explicitly calls for interpreting the CBA so as to define the scope of FDR’s obligation to
contribute to the Health Fund.” (Id. at 6).
III.

Arbitration and Post-Arbitration Briefing
The parties proceeded to arbitration. Testimony was presented virtually during eleven

days of hearings between November 2020 and June 2022.
After a hearing on January 28, 2021, the Arbitrator asked counsel for each side to define
the issue to be decided. The Union, on February 25, 2021, framed the issue as follows:
Did the Union breach the collective bargaining agreement by, from October 1, 2013
through September 30, 2016, allegedly failing to enroll some of [FDR’s] employees
in the Health Fund and/or by allegedly failing to forward to the Health Fund signed
employee waivers?
(Doc. #138 (“Swearengen Decl.”) Ex. B at ECF 3). 1 To decide that question, the Union asked
the Arbitrator to consider, among other things, whether FDR “proved that any waivers the Union
failed to send to the Health Fund would have reduced [FDR]’s obligation to contribute to the
Health Fund” and whether “Article 16(A) of the [CBA] require[d] [FDR] to make Health Fund
contributions on behalf of employees who waived coverage.” (Id. at ECF 4–5). Article 16(A) of
the CBA provides: “[T]he Employer agrees to contribute monthly to the [Heath Fund], or such
1

The parties’ submissions in support of their cross-motions contain multiple duplicative
exhibits. For those documents, the Court refers to the documents attached to the Swearengen
Declaration.
“ECF __” refers to page numbers automatically assigned by the Court’s Electronic Case
Filing system.
4

other fund as the Union may designate in writing, to prov[ide] coverage for Employees only.”
(Swearengen Decl. Ex. A at 16).
FDR framed the issue differently. According to FDR, only if the Arbitrator decides, as a
matter of fact, that the Union Defendants (i) had a past practice of transmitting employee waivers
to the Health Fund, and (ii) failed to transmit some of those waivers (among other findings of
fact), should he consider whether “such factual ruling or rulings lead to a legal conclusion that
the [Union Defendants] either: 1) breached the fiduciary duty that they owed; or 2) would be
liable for a portion of the deficiency sought by the Health Fund under a theory of contribution or
implied indemnification.” (Swearengen Decl. Ex. C at ECF 5). In its submission, FDR noted
that “FDR’s purported contractual obligations under the CBA may be a defense put forth by the
Union Defendants to argue that the Union did not have a fiduciary responsibility (because FDR
had a contractual one)” but was adamant that “FDR is not obligated to establish that the Union
breached a contractual obligation.” (Id. at ECF 6).
The Arbitration continued. At the last hearing date on June 30, 2022, the Arbitrator
closed the case and ordered the parties to submit post-arbitration briefs by October 7, 2022.
(Doc. #135 (“Solomon Decl.”) Ex. B at 1983).
In FDR’s post-hearing brief, FDR framed the issue to be decided as: “Did the [Union]
(via its representatives and/or shop stewards) fail to submit enrollment and/or waiver forms to
health fund?” (Solomon Decl. Ex. C at 1). FDR argued the Order Compelling Arbitration
“states that this is the only issue to be decided in this Arbitration.” (Id.) Moreover, according to
FDR, the CBA was unambiguous, and FDR’s “only obligation under the [CBA] was to pay all
invoices submitted by the health fund (which FDR complied with).” (Id. at 1–2).

5

Conversely, the Union Defendants argued Article 16(A) of the CBA clearly and
unambiguously required FDR to contribute to the Health Fund on behalf of all covered
employees. The CBA, according to the Union Defendants, did not exclude employees who have
other insurance coverage or “who, through oversight or otherwise, are not actually enrolled in the
Health Fund and are not actually receiving benefits under the Health Fund.” (Swearengen Decl.
Ex. E at 2–3, 25). Thus, the Arbitrator need not consider whether the Union Defendants failed to
transmit waiver forms because FDR was required to contribute on behalf of all employees—
including those who purportedly signed waivers. However, if the Arbitrator did reach that
question, the Union Defendants argued FDR had failed to establish there was actually a past
practice of Union representatives transmitting enrollment and waiver forms to the Health Fund.
IV.

The Draft Award
On November 26, 2022, the Arbitrator emailed counsel for both parties regarding an

overpayment received by the Arbitrator with respect to an invoice for his fees. Apparently, the
Arbitrator mistakenly attached to his email a draft of his opinion and award in the Arbitration
(the “Draft Award”). The Draft Award is evidently a rough, incomplete draft, and includes
pages with large blank spaces. (See, e.g., Swearengen Decl. Ex. F at ECF 5, 8). The Draft
Award identified the issue to be decided as:
Did FDR violate the Collective Bargaining Agreement when it failed or refused to
pay for employees who had signed waivers to opt out of the Health Fund or was
insured through Medicaid or other government Plan?
(Id. at ECF 4). Concluding FDR’s grievance must be denied, the Draft Award found that “FDR
failed to present sufficient clear and convincing evidence to prove that [the Union] was
responsible in any manner for collecting and delivering health insurance forms to the insurance
carrier.” (Id. at ECF 8). In support of this conclusion, the Draft Award reasons:

6

The contract language [in Article 16(A)] is clear and unambiguous in regards to
payment of insurance on behalf of employees. . . . [T]he only reference to a lower
rate or waiver was directed to an overall reduction in payment through the NY
Master Collective Bargaining Agreement. . . . I was convinced that, the language
of the Collective Bargaining Agreement was silent in dealing with the issue of
employees being able to opt out of the plan.
(Id. at ECF 10–12). Moreover, the Draft Award stated: “[A]nything that’s not covered by the
collective bargaining Agreement becomes a management right. In this case, [FDR] management
. . . permitted [the shop steward] to perform these task[s] of signing-up new hires for benefit”
which FDR was entitled to do “[s]ince [the shop steward] was employed and paid by FDR.” (Id.
at ECF 12).
V.

Letters Addressing the Draft Award
On November 29, 2022, counsel for the Union Defendants responded to the Arbitrator’s

email and attached a three-page letter (the “Union Letter”). In the letter, counsel stated she
wished to “correct several misstatements of fact that appear in” the Draft Award. (Swearengen
Decl. Ex. G at ECF 3). She explained that this Court, in the Order Compelling Arbitration,
directed the Arbitrator to decide “FDR’s claims against the Union – namely, that the Union’s
alleged failure to forward signed employee waivers to the Health Fund breached a practice.” (Id.
at ECF 3–4). She also corrected a statement in the Draft Award that the Health Fund’s thirdparty administrator presented evidence showing employees had opted out of the health plan
(because, counsel claimed, the Health Fund was not aware of the contested waivers before
FDR’s third-party action).
The Union Defendants’ counsel felt it was important to “correct” these facts because the
issue, as framed in the Draft Award, “is not the issue that Judge Briccetti asked [the Arbitrator]
to decide,” which was, quoting from the Order Compelling Arbitration, “FDR’s claims against
the Union defendants.” (Swearengen Decl. Ex. G at ECF 3, 4). Conversely, the issue as framed
7

in the Draft Award “would essentially require [the Arbitrator] to issue an award as to the merits
of the Health Fund’s federal claims against FDR,” a matter reserved for the Court to decide in
the underlying ERISA action. (Id. at ECF 5).
On December 7, 2022, FDR’s counsel also responded to the Arbitrator’s email, attaching
a one-page letter (the “FDR Letter”) arguing the Union Letter was an improper sur-reply to the
post-arbitration briefing. However, counsel noted:
It is also FDR’s understanding that the Draft Award is subject to revision and that
Your Honor will give due consideration to FDR’s post-arbitration brief, which
explained that the only issue to be decided is: Did the Union (via its
representatives and/or shop stewards) fail to submit enrollment and/or waiver
forms to health fund?
(Swearengen Decl. Ex. H at ECF 4).
VI.

The Final Award
On February 1, 2023, the Arbitrator issued a final opinion and award. (Swearengen Decl.

Ex. I (the “Final Award”)). The Final Award frames the issue decided as “Whether employees
are covered by the CBA and therefore entitled to contributions?” (Final Award at 2).
The Final Award answers this question in the affirmative, ruling in the Union
Defendants’ favor and holding “FDR failed to present sufficient clear and convincing evidence
to prove that the 39 employees and others who signed waivers opting out of the health plan were
exempt due to an alleged past practice.” (Final Award at 33).
In so concluding, the Arbitrator referred to the “clear and unambiguous” language in
Article 16(A) of the CBA “regard[ing] the payment of insurance on behalf of employees” and
noted the absence of any waiver or exemption for individual employees. (Final Award at 35).
Moreover, the Arbitrator found “FDR did not present any credible evidence confirming that it
was authorized to stop payment for employees who signed waivers opting out of the health
plan.” (Id. at 38). Thus, the Arbitrator decided all employees, even those who purportedly
8

signed waivers, were covered by the CBA and that FDR owed Health Fund contributions on their
behalf.
As to FDR’s arguments about breaching a past practice, the Arbitrator noted that “it very
well could have been the duties of the Shop Steward to collect and deliver the benefit forms to
the Insurance carrier.” (Final Award at 36). However, FDR’s status as the shop steward’s
employer rendered it responsible “for her error in judgment in failing to process the health
insurance enrollment forms” because “it was FDR’s responsibility to determine the duties and
activities of their employees.” (Id.). Moreover, the Arbitrator concluded “FDR did not present
any credible evidence that” the Union authorized the shop steward to perform this function, and
the CBA prohibited any individual Union member to take any actions governed by the CBA
without the Union’s consent. (Id. at 37). Therefore, the Arbitrator “believe[d] that [FDR] had
some influence over [the shop steward’s] decision to withhold the thirty-nine enrollment forms
which were contrary to the language of the” CBA. (Id. at 36). The Final Award includes
language similar to that in the Draft Award that “issues that are not covered by the collective
bargaining Agreement become a management right” and that FDR exercised that right by
“permit[ing] [the shop steward] to perform the task of signing-up new hires for benefits.” (Id. at
37–38).
DISCUSSION
I.

Standard of Review
This Court’s grant of authority to review arbitration awards is limited. The Federal

Arbitration Act permits vacatur of an arbitration award under four narrow circumstances:
(1) where the award was procured by corruption, fraud, or undue means; (2) where
there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and
9

material to the controversy; or of any other misbehavior by which the rights of any
party have been prejudiced; or (4) where the arbitrators exceeded their powers, or
so imperfectly executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.
9 U.S.C. § 10(a). “In addition, as judicial gloss on these specific grounds for vacatur of
arbitration awards, . . . the court may set aside an arbitration award if it was rendered in manifest
disregard of the law.” Schwartz v. Merrill Lynch & Co., 665 F.3d 444, 451 (2d Cir. 2011). 2
Such circumscribed review ensures that the “twin goals of arbitration, namely, settling
disputes efficiently and avoiding long and expensive litigation,” are fulfilled. Folkways Music
Publishers v. Weiss, 989 F.2d 108, 111 (2d Cir. 1993). Thus, the party seeking to vacate an
arbitration award bears a high burden to avoid summary confirmation. D.H. Blair & Co. v.
Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006).
Under this highly deferential standard, the Second Circuit has held that an arbitration
award must be upheld when “the arbitrator offers even a barely colorable justification for the
outcome reached.” Wackenhut Corp. v. Amalgamated Local 515, 126 F.3d 29, 31–32 (2d Cir.
1997). In the end, “[t]he contractual theory of arbitration . . . requires a reviewing court to affirm
an award it views as incorrect—even very incorrect—so long as the decision is plausibly
grounded in the parties’ agreement.” Id. at 32. “[A] federal court’s review of labor arbitration
awards” in particular “is narrowly circumscribed and highly deferential—indeed, among the
most deferential in the law.” Nat’l Football League Mgmt. Council v. Nat’l Football League
Players Ass’n, 820 F.3d 527, 532 (2d Cir. 2016).

2

Unless otherwise indicated, case quotations omit all internal citations, quotation marks,
footnotes, and alterations.
10

“To justify vacatur on the grounds of fraud or undue means, it must be ‘abundantly clear’
that the award was procured through improper means.” ACP Inv. Grp., LLC v. Blake, 2016 WL
5947290, at *4 (S.D.N.Y. Oct. 13, 2016) (quoting Kolel Beth Yechiel Mechil of Tartikov, Inc. v.
YLL Irrevocable Tr., 729 F.3d 99, 105 (2d Cir. 2013)).
Likewise, to justify vacatur due to an arbitrator’s misconduct, the movant must “not
only . . . demonstrate clear evidence of impropriety, but also establish actual prejudice.” Nat’l
Hockey League Players Ass’n v. Bettman, 1994 WL 738835, at *24 (S.D.N.Y. Nov. 9, 1994);
see also Rai v. Barclays Cap. Inc., 739 F. Supp. 2d 364, 372 (S.D.N.Y. 2010) (“Vacatur is only
permitted where the arbitrator’s” misconduct “prejudices one of the parties.”), aff’d, 456 F.
App’x 8 (2d Cir. 2011). “[M]isconduct occurs under this provision only where there is a denial
of fundamental fairness.” Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr.,
729 F.3d at 105. For this reason, although violation of arbitration association rules “can, under
certain circumstances, require vacatur of an arbitration award,” Circle Indus. USA, Inc. v. Parke
Constr. Grp., Inc., 183 F.3d 105, 109 (2d Cir. 1999), procedural violations that do not rise to
misconduct or result in prejudice “are not sufficient of themselves to vacate an award.” N.Y.
Newspaper Printing Pressman’s Union No. 2 v. N.Y. Times Co., 1992 WL 122788, at *7
(S.D.N.Y. May 22, 1992).
To demonstrate an arbitrator exceeded her authority warranting vacatur, the challenging
party must establish the arbitrator did not have power, “based on the parties’ submissions or the
arbitration agreement, to reach a certain issue, not whether the arbitrator[] correctly decided that
issue.” Jock v. Sterling Jewelers Inc., 646 F.3d 113, 122 (2d Cir. 2011). “[A]n arbitrator may
exceed her authority by, first, considering issues beyond those the parties have submitted for her
consideration, or, second, reaching issues clearly prohibited by law or by the terms of the parties’

11

agreement.” Id. “[C]ourts in this and other circuits have exhibited considerable deference
toward arbitrators’ determinations regarding the scope of their own authority.” N.Y. State Fed’n
of Physicians & Dentists v. Interfaith Med. Ctr., 2007 WL 2743708, at *3 (E.D.N.Y. Sept. 21,
2007) (collecting cases). In addition, “the Second Circuit has counseled against reading
arbitration submissions [of the issue to be arbitrated] narrowly.” Id. at *4.
If the parties have consented to confirmation of an arbitration award by a court, a party
may petition a court for an order confirming the award within one year after the award is made.
9 U.S.C. § 9. “[T]he court must grant such an order unless the award is vacated, modified, or
corrected.” Id. Here, the CBA provides that “[j]udgment upon [an arbitration] award may be
entered, and enforcement may be sought in, any court of competent jurisdiction.” (Swearengen
Decl. Ex. A at 22).
II.

The Union Letter
FDR argues the Final Award should be vacated because the Arbitrator was improperly

influenced by the post-Draft Award Union Letter.
The Court disagrees.
This argument arguably touches two bases for vacatur: First, the Final Award was
procured by “undue means,” 9 U.S.C. § 10(a)(1); and second, the Arbitrator engaged in
misbehavior prejudicing the rights of FDR. Id. § 10(a)(3). Neither argument surmounts the high
burden to justify vacatur, and thus neither argument has merit.
As an initial matter, the Union Letter is not, as FDR argues, akin to an improper ex parte
communication, because it was simultaneously sent to the Arbitrator and counsel for FDR. In
fact, the Union Letter invited FDR’s counsel to reply, which FDR’s counsel did. (See
Swearengen Decl. Ex. G at ECF 3 (“I am copying [FDR’s counsel] on this response, as he may

12

wish to submit a response of his own.”)). But even lending credit to FDR’s position, FDR has
failed to prove the Union Letter “deprived [FDR] of a fair hearing and influenced the outcome of
the arbitration.” Glob. Gold Min. LLC v. Caldera Res., Inc., 941 F. Supp. 2d 372, 386 (S.D.N.Y.
2013).
First, FDR was given every opportunity to argue its case, as well as multiple specific
opportunities to clearly frame the issue it wanted the Arbitrator to decide. See Wenchun Zheng
v. Gen. Elec. Co., 2018 WL 8732194, at *7 (N.D.N.Y. Mar. 12, 2018) (arbitrator did not engage
in misconduct prejudicing plaintiff when plaintiff “fully participated in the briefing process,
there is no evidence that the arbitrator refused to hear evidence pertinent and material to the
controversy,” and plaintiff merely argued the arbitrator disagreed with the movant’s arguments).
And, as already noted, FDR had an opportunity to, and did, respond to the Union Letter. See
Nat’l Hockey League Players Ass’n v. Bettman, 1994 WL 738835, at *26 (“[I]f the arbitrator has
had separate contacts with both sides to the controversy . . . no disqualification is justified.”).
Second, FDR has not shown the Arbitrator actually modified the Draft Award based on
the Union Letter. The Draft Award is perceptibly incomplete, but based on what was written,
critical portions analyzing the CBA and the alleged past practice were substantially unchanged in
the Final Award. Although the Final Award is different from the Draft Award, it does not, as
FDR claims, adopt wholesale the Union Letter’s description of the underlying ERISA litigation
or its framing of the issue to be decided. Furthermore, an examination of the February 25, 2021,
issue statements and the post-arbitration briefing submitted by each party shows the Union Letter
did not offer any information that had not already been presented to the Arbitrator. See Nat’l
Hockey League Players Ass’n v. Bettman, 1994 WL 738835, at *26 (“[T]he decisions that have
voided an arbitrator’s award based on ex parte contacts have typically involved a . . . scenario, in

13

which the arbitrator obtains evidence from one party, without notice to the other parties, and then
relies on that evidence in reaching his decision.”).
Even if the Arbitrator was motivated to change the Final Award based on the Union
Letter, FDR has failed to show these modifications prejudiced FDR. Critically, both the Draft
Award and the Final Award ruled in favor of the Union Defendants and did so on the same
basis—that the clear language of the CBA required FDR to contribute to the Health Fund on
behalf of employees who signed waivers opting out of coverage, and that any practice of the
shop steward forwarding Health Fund forms on behalf of employees was under the control of
FDR.
For these reasons, the Court discerns neither Arbitrator misconduct nor prejudice to FDR
from the Union Letter. Consequently, even if consideration of the Union Letter violated
applicable arbitration rules, as FDR contends, this violation would not support vacatur.
Accordingly, the Court declines to vacate the Final Award based on the Union Letter.
III.

Incorrect Issue Decided
FDR also argues the Final Award should be vacated because the Arbitrator decided the

wrong issue, thereby exceeding his authority and failing to render a mutual, final, and definite
award.
The Court disagrees.
Importantly, this Court already decided that the issue, as stated by the Arbitrator in the
Final Award, falls squarely within the arbitration clause in the CBA, and therefore, the
Arbitrator’s power to decide it. (See Order Compelling Arbitration at 6 (“[T]he parties dispute
whether the CBA requires FDR to contribute to the Health Fund on behalf of employees who
waived coverage—a dispute that explicitly calls for interpreting the CBA so as to define the

14

scope of FDR’s obligation to contribute to the Health Fund.”)). Hence, FDR’s argument that the
Arbitrator “ignored the issue identified by the Court” to be arbitrated is patently false. (FDR
Mem. at 11).
Regardless, it is clear the Final Award did not exceed the Arbitrator’s authority. The real
substance of the dispute to be arbitrated was whether the Union Defendants bore some liability
for FDR’s delinquency because the Union Defendants purportedly failed to forward certain
Health Fund waivers. That the Arbitrator concluded these employees were covered by the CBA,
instead of FDR’s desired holding that Union representatives did not pass along the contested
waivers, does not indicate he exceeded his authority. Rather, the Final Award’s holding nullifies
the relevance of FDR’s question and is dispositive of FDR’s third-party claims: the Union
Defendants did not breach a duty or contribute to FDR’s delinquency because any successful
transfer of waiver forms would not have reduced FDR’s liability in the Funds’ ERISA action.
See N.Y. State Fed’n of Physicians & Dentists v. Interfaith Med. Ctr., 2007 WL 2743708, at *4
(declining to vacate when the arbitrator adopted a “broad reading” of the issue but “not an
unreasonable one, and it by no means transgresse[d] any specific limitation on the arbitrator’s
jurisdiction”).
Finally, the Arbitrator did address FDR’s arguments regarding a past practice.
Specifically, the Arbitrator concluded that FDR, and not the Union, controlled the process of
allowing employees to sign waivers. That FDR disagrees with the Arbitrator’s decision is not a
basis to vacate the Final Award. Neither would this Court’s disagreement with the outcome
provide a foundation for vacatur. See WRW Chocolates, LLC v. Moonstruck Chocolatier, Inc.,
432 F. Supp. 2d 306, 311 (E.D.N.Y. 2006) (“[A] court has no authority to vacate an award solely
because of an alleged error in contract interpretation. As long as the arbitrator is even arguably

15

construing or applying the contract and acting within the scope of his authority, that a court is
convinced he committed serious error does not suffice to overturn his decision.”).
For these reasons, the Arbitrator neither exceeded his authority nor rendered a decision
that is “incomplete, ambiguous, or contradictory.” Cf. Bell Aerospace Co. Div. of Textron, Inc.
v. Local 516 Int’l Union, United Auto., Aerospace & Agric. Implement Workers of Am., 500
F.2d 921, 923–24 (2d Cir. 1974) (remanding back to arbitration when “[n]one of the parties ha[d]
advanced a clear and compelling interpretation of the award”).
Accordingly, the Court declines to vacate the Final Award because the Arbitrator decided
the wrong issue. 3
Because FDR has not met its burden to justify vacatur, the Court declines to vacate the
Final Award. Accordingly, the Final Award is confirmed. See 9 U.S.C. § 9.
CONCLUSION
FDR’s motion to vacate the Final Award is DENIED. (Doc. #134).
The Union Defendants’ motion to confirm the Final Award is GRANTED. (Doc. #137).
The third-party complaint is dismissed.
By February 23, 2024, counsel for all parties shall file a joint case management report on
the docket of this case (“Laundry I”) and on the docket of Trustees of the Laundry, Dry Cleaning
Workers and Allied Industries Retirement Fund, Workers United v. FDR Services Corp. of New

3

FDR briefly argues at the end of its opening brief that the Final Award should be vacated
because it does not discuss testimony by three witnesses for FDR, showing the Arbitrator “failed
to consider evidence that was germane to the issue.” (FDR Mem. at 20). FDR appears to have
abandoned this argument on reply. In any event, these witnesses were permitted to testify, and
are referred to on the cover page of the Final Award, which refutes FDR’s argument that the
Arbitrator “refus[ed] to hear [this] evidence.” See 9 U.S.C. § 10(a)(3). Moreover, “[t]he
arbitrator’s rationale for an award need not be explained.” Ria v. Barclays Cap. Inc., 739 F.
Supp. 2d 364, 373 (S.D.N.Y. 2010).
16

York, No. 17-cv-8353 (S.D.N.Y. filed Oct. 30, 2017) (“Laundry II”), not to exceed three pages,
setting forth the parties’ proposal for how Laundry I and Laundry II should proceed now that the
third-party action in Laundry I has been dismissed.
In addition, on March 5, 2024, at 11:30 a.m., the Court will conduct a case management
conference in both Laundry I and Laundry II in Courtroom 620 at the White Plains Courthouse
to discuss how the two cases should proceed.
The stay of proceedings previously entered in Laundry I and Laundry II is vacated.
The Clerk is directed to terminate the pending motions. (Docs. ##134, 137).
Dated: February 9, 2024
White Plains, NY

SO ORDERED:

____________________________
Vincent L. Briccetti
United States District Judge

17