217 v. Sage Hospitality Res.

• Citation: 190 L.R.R.M. (BNA) 2947,642 F.3d 255
• Decision Date: 29 April 2011
• Docket Number: No. 10–1667.,10–1667.
• Parties: UNITE HERE LOCAL 217, Plaintiff, Appellee,v.SAGE HOSPITALITY RESOURCES, d/b/a Renaissance Providence Hotel, Defendant, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

642 F.3d 255
190 L.R.R.M. (BNA) 2947
161 Lab.Cas. P 10,370

UNITE HERE LOCAL 217, Plaintiff, Appellee,
v.
SAGE HOSPITALITY RESOURCES, d/b/a Renaissance Providence Hotel, Defendant, Appellant.

No. 10–1667.

United States Court of Appeals, First Circuit.

Heard Feb. 8, 2011.Decided April 29, 2011.

[642 F.3d 256]

Norman R. Buchsbaum, with whom Louis J. Cannon, Jr., Law Offices of Norman R. Buchsbaum, W. Mark Russo, Moshe Berman, and Ferrucci Russo P.C. were on brief, for appellant.Michael T. Anderson, with whom Murphy Anderson PLLC, Amato A. DeLuca, and DeLuca & Weizenbaum Ltd. were on brief, for appellee.Before LIPEZ, Circuit Judge, SOUTER, Associate Justice,^* and HOWARD, Circuit Judge.

[642 F.3d 257]

LIPEZ, Circuit Judge.

Appellant Sage Hospitality Resources (“Hotel”) seeks review of a district court order compelling it to submit to arbitration a dispute over the meaning of ambiguous language in the duration clause of a neutrality agreement between the Hotel and appellee UNITE HERE Local 217 (“Union”). As the parties agreed to a broad arbitration clause that unambiguously encompasses their dispute, we hold that the issue was properly consigned to the arbitrator for resolution. We therefore affirm.

I.

The Hotel and the Union entered into a neutrality agreement (“Agreement”) on June 9, 2003, in anticipation of the renovation of a dilapidated structure in downtown Providence into the Renaissance Providence Hotel. The Agreement set forth a process allowing the Union to organize the Hotel's employees and to seek recognition as their collective bargaining representative; in turn, the Union would refrain from engaging in any picketing or economic activity against the Hotel.

Three provisions of the parties' Agreement are relevant to this case. First, the Agreement established a “card check” procedure, by which “[t]he Union may request recognition as the exclusive collective bargaining agent for [the Hotel's] Employees.” ¹ Second, the Agreement provided for binding arbitration of “any dispute over [its] interpretation or application”:

The parties agree that any dispute over the interpretation or application of [the Agreement] shall be submitted to expediated [sic] and binding arbitration pursuant to [the] procedures below.... The parties hereto agree to comply with any order of the arbitrator, which shall be final and binding, and furthermore consent to the entry of any order of the arbitrator as the order of judgment of the United States District Court for the District of Rhode Island without entry of findings of fact and conclusions of law.Finally, the duration clause of the Agreement stipulated that the “Agreement shall be in full force and effect from the date it is fully executed ... until thirty months from the full public opening of the hotel, or if sooner upon the Employer's recognition of the Union.” The Agreement did not define the term “full public opening.”

A dispute over the meaning of this term arose on January 5, 2010, when the Union requested recognition from the Hotel pursuant to the card check procedure. The Hotel declined the request, characterizing it as untimely. In the Hotel's view, the “full public opening” occurred on June 1, 2007, when it held a ceremony marking the “opening of the hotel doors.” This event, says the appellant, was preceded by a “soft opening” in which it had already begun renting out a small number of rooms and holding events. According to the Hotel, the Agreement expired on December 1, 2009, thirty months after June 1, 2007, and it thus was no longer obligated to participate in the card check procedure.

The Union then demanded arbitration over the meaning of the term “full public opening,” alleging that the “full public opening” instead occurred on August 21, 2007, when the Hotel held a ribbon-cutting and gala. The Hotel rejected the arbitration demand, again relying on untimeliness

[642 F.3d 258]

in arguing that its obligation to honor the arbitration clause of the Agreement expired on December 1, 2009, along with the Agreement itself.

On January 7, 2010, the Union filed in federal court a petition to compel the Hotel to submit to arbitration. The Union argued that the meaning of the term “full public opening” was for the arbitrator, who should decide the threshold issue of whether the Agreement was in effect, as well as the ultimate issue of the results of the card check procedure. The Hotel countered that the court should determine whether an agreement to arbitrate continued to bind the parties. It maintained that the term “full public opening” did not need to be construed by an arbitrator, because either it was not an ambiguous term or it was tantamount to a “date certain.” To the extent evidence was needed to determine the date of the full public opening and hence the duration of the Agreement, the Hotel argued that the court, not an arbitrator, should conduct an evidentiary hearing.

In an Opinion and Order dated May 4, 2010 (“May 4 Order”), the district court granted the Union's petition. See UNITE HERE Local 217 v. Sage Hospitality Res., 722 F.Supp.2d 161, 163 (D.R.I.2010) [hereinafter UNITE HERE I ]. Relying primarily on this court's holdings in International Brotherhood of Electrical Workers, Local 1228 v. Freedom WLNE–TV, Inc., 760 F.2d 8 (1st Cir.1985), and New England Cleaning Services, Inc. v. Services Employees International Union, Local 254, 199 F.3d 537 (1st Cir.1999), the district court determined, inter alia, that this case was “directly in the path of the rule consigning termination disputes to arbitration if the agreement includes a ‘broad’ arbitration clause” and ordered the parties to arbitration. UNITE HERE I, 722 F.Supp.2d at 168; see also id. at 165.

A week later, the Union moved to enforce the district court's judgment. In response, the Hotel filed a motion to stay the court's order pending appeal and, in the alternative, for reconsideration. It assayed an argument not previously raised: that this circuit's law on the arbitrability of termination disputes was “implicitly overruled” by the Supreme Court's decision in Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002), under which the parties' dispute, the Hotel claimed, would presumptively be for a court to decide. In an Order and Opinion dated September 24, 2010 (“September 24 Order”), the district court granted the Union's motion to enforce the judgment and denied the Hotel's motion to stay. See UNITE HERE Local 217 v. Sage Hospitality Res., 722 F.Supp.2d 169, 171 (D.R.I.2010) [hereinafter UNITE HERE II ]. The court granted in part the Hotel's motion to reconsider by “clarif[ying]” certain parts of its May 4 Order; however, it declined to withdraw any part of that order.² Id. at 177–78.

The Hotel appeals, asserting that the district court erred in concluding that the question of what “full public opening” means, and thus whether the Agreement was still in effect at the time the Union demanded the card check and arbitration, is for the arbitrator, and not the court, to resolve.³

II.

The central question here is whether a court or an arbitrator should decide

[642 F.3d 259]

whether the Agreement was in effect at the time it was invoked by the Union. The Union points out that the resolution of that question turns on the meaning of the phrase “full public opening” as it appears in the duration clause of the Agreement. It contends that this is a straightforward issue of contract interpretation, which the Agreement's arbitration clause and relevant First Circuit law assign to the arbitrator. As its main rejoinder, the Hotel posits that the parties' conflict implicates a question of arbitrability under Howsam, 537 U.S. 79, 123 S.Ct. 588 and hence is presumptively for a court to decide. To the extent our precedents might require a different outcome, the Hotel argues, we should declare them overruled by this subsequent Supreme Court precedent.

We review a district court's order compelling arbitration de novo, S. Bay Boston Mgmt. v. Unite Here, Local 26, 587 F.3d 35, 42 (1st Cir.2009), and we are “not wedded to the lower court's rationale, but, rather, may affirm its order on any independent ground made manifest by the record,” Kristian v. Comcast Corp., 446 F.3d 25, 31 (1st Cir.2006) (quoting InterGen N.V. v. Grina, 344 F.3d 134, 141 (1st Cir.2003)). In our review, we focus only on the threshold issue of arbitrability; we do not rule on the merits of the underlying claims. AT & T Techs., Inc. v. Commc'ns Workers, 475 U.S. 643, 649–50, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986).

A. The General Legal Framework: Does the Dispute Fall Within the Scope of the Parties' Arbitration Clause?

It is axiomatic that...