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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

FONTAINEBLEAU FLORIDA HOTEL, LLC, 

Plaintiff, 

v. 

THE SOUTH FLORIDA HOTEL AND 

CULINARY EMPLOYEES WELFARE FUND; 

AND UNITE HERE, LOCAL 355, 

Defendants. 

/ 

CASE NO. 1:20-cv-22667 

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF 

Plaintiff, Fontainebleau Florida Hotel, LLC (“Fontainebleau”), seeks declaratory and 

injunctive relief against Defendants, The South Florida Hotel and Culinary Employees Welfare 

Fund (“the Fund”) and UNITE Here, Local 355 (“the Union”), pursuant to Section 4301(a)(1) of 

the Employee Retirement Income Security Act of 1974, as added by the Multi-Employer Pension 

Plans Amendments Act of 1980; the Declaratory Judgment Act, 28 U.S.C. 2201; and Rule 57(a) 

of the Federal Rules of Civil Procedure, and alleges as follows: 

PRELIMINARY STATEMENT 

1. The Fontainebleau Miami Beach Hotel is an historic and architectural landmark in 

the City of Miami Beach. On March 24, 2020, this iconic hotel was forced to close down all of its 

operations because of an unprecedented Order from the City of Miami Beach intending to 

minimize the spread of the COVID-19 pandemic. The full impacts of the COVID-19 pandemic 

have created the worst business conditions the American lodging and hospitality industry has ever 

known. The shutdown took Fontainebleau’s occupancy rate from approximately eighty percent 

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(80%) annualized down to zero and closed not only the Hotel, but all the restaurants, bars, clubs, 

spa, pools, and retail that operate on the property. In essence, from a business standpoint, as with 

so many other hospitality businesses on Miami Beach both large and small, Fontainebleau’s 

revenue flat-lined virtually overnight. The shutdown required Fontainebleau to lay off 2,083 of 

its roughly 2,151-person workforce, including all 1,077 individuals represented by the Union 

effective March 30, 2020. 

In the face of this crisis for Fontainebleau, the Fund and the Union demanded that 

Fontainebleau continue to make health care contributions to the Fund on account of the laid-off 

individuals, despite the fact that they are no longer employed by Fontainebleau. The total amount 

Defendants have claimed that Fontainebleau is or will be obligated to pay is between $ 3.9 Million 

and $ 5.35 Million in health care contributions to the Fund for those former employees. The 

uncertainty surrounding Defendants’ demands for these huge payments has placed and will 

continue to place Fontainebleau under a financial cloud, as it attempts to re-stabilize itself and 

regain its ability to again employ 2,000-plus people in the City of Miami Beach. 

Because this multi-million dollar demand is contrary to the requirements of the Collective 

Bargaining Agreement (the “CBA”) between Fontainebleau and the Union, and because the 

payments demanded are prohibited by the trust instrument under which the Fund is maintained, 

Fontainebleau has been forced to bring this action to resolve the controversy between itself and 

the Defendants. 

THE PARTIES 

2. Plaintiff, Fontainebleau, operates one of the most historically and architecturally 

significant hotels on Miami Beach. Opened in 1954 and designed by Morris Lapidus, it was 

arguably the most luxurious hotel on Miami Beach. The hotel reopened in 2008 following a major 

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renovation and now has 1504 rooms and suites; 12 restaurants and bars; a 40,000-square-foot spa; 

and an oceanfront poolscape. 

3. Defendant, The South Florida Hotel and Culinary Employees Welfare Fund, is a 

multi-employer employee benefit plan within the meaning of ERISA § 37(A)(i)(ii), with its 

principal place of business at 2010 NW 150th Ave., Suite 100, Pembroke Pines, Broward County, 

Florida 33028. 

4. Defendant, UNITE HERE, Local 355, is an employee organization within the 

meaning of ERISA § 3(4). The Union is a party to the CBA (relevant portions attached as Exhibit 

1) which defines the scope of the obligation of Fontainebleau to contribute to the Fund. Its 

principal place of business is located at 871 NW 167 Street, Miami Gardens, Miami-Dade County, 

Florida 33169. The Union represents about 1,077 of the total 2,151 employees and former 

employees that work or worked in all parts of the Fontainebleau Miami Beach Hotel. 

SUBJECT MATTER JURISDICTION 

5. This Court has subject matter jurisdiction over this action under 28 U.S.C. 1331 

because the action arises under federal law. Fontainebleau’s substantive cause of action arises 

under ERISA § 4301(a)(1), which creates a cause of action for Fontainebleau because 

Fontainebleau is adversely affected by the Fund’s May 14 and June 12, 2020 demands for payment 

of allegedly due delinquent contributions, plus penalties and fees, which the Fund asserts were 

required by the CBA to be paid by May 10 and June 10, 2020, respectively. See May 14 and June 

12, 2020 demand letters, attached hereto as composite Exhibit 2. 

6. Fontainebleau asserts that it does not owe contributions for the period in question 

because the former bargaining unit employees were laid off as of March 30, 2020 and, accordingly, 

are no longer employees for whom contributions must be paid to the Fund pursuant to the CBA. 

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Pursuant to ERISA § 4301(a)(1), the Fund could commence an action, as threatened in Exhibit 2, 

against Fontainebleau to collect the claimed delinquencies in contributions. That the Fund has the 

potential to so enforce its claims, set forth in Exhibit 2, gives Fontainebleau standing to bring this 

action for a Declaratory Judgment, and this Court has subject matter jurisdiction over the cause of 

action pursuant to 28 U.S.C. 1331 because the Fund’s potential cause of action raises a federal 

question under ERISA. 

7. Further, subject matter jurisdiction for this action is also provided by Section 301 

of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. §185 (the “LMRA”), and 

federal common law, as the Union’s and Fund’s actions are in violation of the CBA between the 

Union and Fontainebleau. 

VENUE 

8. Venue is appropriate in the Southern District of Florida, pursuant to 28 U.S.C. 

1391(b)(2), because the principal place of business of Fontainebleau is in Miami-Dade County, 

and the hotel is located in the Southern District. The Union and the Fund are also both located in 

the Southern District. Most, if not all, of the bargaining unit employees under the CBA, and former 

employees since lay-off, reside in the Southern District of Florida and performed the work in the 

Southern District, which work determines coverage or exclusion from contributions to the Fund 

under the terms of the relevant contracts and other documents. 

FACTS SUPPORTING CLAIMS FOR RELIEF 

9. As noted in Paragraph 5, Fontainebleau received letters dated May 14 and June 12, 

2020 asserting that it owes contributions to the Fund that it alleges were due on May 10 and June 

10, 2020. Exhibit 2. Due to recent events, it is now foreseeable that many of the layoffs will 

continue in excess of six months, as a result, the amount in controversy is likely to total between 

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$ 3.9 Million and $ 5.35 Million, depending on how many of its former employees Fontainebleau 

can return to employment and when. 

10. As stated above, on March 30, 2020, Fontainebleau was forced to lay off all 1,077 

individuals represented by the Union after the hotel was legally required to close pursuant to an 

Order from the City of Miami Beach. 

11. Fontainebleau’s rights and obligations in regard to the bargaining unit are governed 

by the CBA. The CBA states that the Fontainebleau “retains its inherent right ... to determine the 

number of employees required.” Exhibit 1, Article 8. The CBA further describes Fontainebleau’s 

right to conduct layoffs of employees when necessary. In Article 11, the CBA states the employer 

shall have the right during slack periods of business to “reduce the number of employees....” 

Accordingly, by this provision, the parties to the CBA set forth their agreement that when 

individuals are laid off, they are no longer “employees.” Exhibit 1, Article 11 (emphasis added). 

12. As relevant to the period here, Fontainebleau’s obligation to contribute to the Fund 

is likewise defined by the terms of the CBA. 

13. Under the CBA, Fontainebleau was obligated to contribute only for current eligible 

employees. The CBA states as follows in pertinent part: 

Section 1: The Total Health and Welfare (including Dental and Administration) 

contributions rate is $645.47 and shall increase to $753.16 as of October 1, 2017. 

Contributions shall be increased by 9% on July 1 of each subsequent year of this 

Agreement. 

The Employer shall pay the contribution as set forth above for each eligible 

employee covered by this Agreement and transmit this sum each month to said 

Fund no later than the 10th day of the following month, together with the names, 

social security numbers, and total hours paid for the employees for whom payments 

were made upon forms required by the Fund.” 

Exhibit 2, Article 28 (emphasis added). 

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14. Accordingly, pursuant to the CBA, Fontainebleau does not owe contributions for 

individuals who were laid off because they were no longer “employees” as of March 30, 2020. 

15. Further, ERISA § 402(a)(1) provides that “[e]very employee benefit plan shall be 

established and maintained pursuant to a written instrument,” and Section 402(b) and subdivision 

(iv) provides that “[e]very employee benefit plan shall . . . specify the basis on which payments 

are made to and from the plan.” The terms of the Fund’s Trust Agreement describe an employer’s 

contribution obligations by referring back to the terms of the CBA, as follows: 

Section 4.1 Employer Contributions. 

(a) Each Employer shall make prompt contributions or payment to the Trust 

Fund in such amount and under the terms as are provided for in the 

applicable collective bargaining agreement in effect from time to time 

between the Employer or his bargaining representative and the Union. An 

Employer may also be required to make contributions in such amount and 

under such terms as agreed to by such Employer in writing, provided that 

such contributions shall be subject to acceptance by the Trustees. The 

Employer agrees that such contributions shall constitute an absolute 

obligation to the Trust Fund, and such obligation shall not be subject to, by 

way of illustration and not limitation, set-off or counterclaim which the 

Employer may have for erroneous contributions to any other Trust Funds, 

or for any other liability of the Union, of an Employee, or any other Trust 

Funds, or for any other liability of the Union, of an Employee, or any other 

person. 

Fund Trust Agreement, attached hereto as Exhibit 3. ERISA § 404(a)(1)(D) requires that the Fund 

be administered “in accordance with the documents and instruments governing the plan insofar as 

such documents and instruments are consistent with the provisions of this title and title IV.” 

Accordingly, it would be a violation of ERISA and a breach of fiduciary duties for the Fund to 

accept contributions from Fontainebleau that are not provided for in the CBA. 

16. The Fund’s Trust Agreement further defines “Employee” to require that, inter alia, 

the individual be “working for an Employer.” Exhibit 3, Article 1, Section 1.9. The Trust 

Agreement states: 

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Section 1.9 Employee. The term “Employee” as used herein shall mean: 

(a) Any Employee represented by the Union and working for an Employer as 

defined herein, and with respect to whose employment an Employer is 

required to make contributions into the Trust Fund. 

Id. It is axiomatic that the individuals on lay-off are no longer “working” for Fontainebleau and 

some may never return to employment. 

17. Fontainebleau is only obligated to make contributions to the Fund for “eligible 

employees.” After a formal layoff, the laid-off worker is no longer an “employee,” but is merely 

an individual with a contractual, contingent right to recall for a set period of time. No UNITE 

HERE bargaining unit employees of Fontainebleau worked any hours in April 2020 or were 

otherwise employed. By the terms of the CBA, Fontainebleau is not obligated to continue to make 

contributions to the Fund for these former employees unless and until they actually resume their 

employment. 

18. Even if Fontainebleau could be found to continue to be obligated to make 

contributions to the Fund for its laid off workers, that obligation would be eliminated based on the 

catastrophic negative impact on the hotel caused by the forced closure of the hotel as a result of 

safety measures implemented to attempt to prevent the further spread of the COVID-19 pandemic. 

This pandemic-caused forced closure constitutes a force majeure or “act of God” that has made 

performance of that obligation impossible. 

19. Similarly, Fontainebleau had to act immediately to preserve its viability given the 

“economic exigencies” that compelled “prompt action.” The forced closing caused by the COVID19 pandemic constitutes “extraordinary events” that: (1) had a “major economic effect;” (2) 

required the employer “to take immediate action;” and (3) were “caused by external events,” 

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“beyond the employer’s control,” and were “not reasonably foreseeable.” Fontainebleau is 

excused from making contributions to the Fund based on these factors. 

20. In May and June 2020, Fontainebleau recalled 361 former employees represented 

by the Union and has made and will make the required contributions to the Fund for those 

individuals that have returned to employment. 

THE DISPUTE BETWEEN THE FUND AND FONTAINEBLEAU IS SUFFICIENTLY 

ADVERSARIAL, CONCRETE, IMMEDIATE, AND CAPABLE OF COMPLETE AND 

AUTHORITATIVE JUDICIAL DETERMINATION TO JUSTIFY A DECLARATORY 

JUDGMENT PURSUANT TO 28 U.S.C. §§ 2201-2202 AND A PERMANENT 

INJUNCTION TO ENFORCE THAT DETERMINATION. 

21. The May 14 and June 12, 2020 letters from the Fund demanding contributions 

(Exhibit 2), coupled with the clear disagreement between the parties as to the individuals for whom 

contributions to the Fund are required, create an immediate, concrete, adversarial dispute which 

can, and should, be resolved by a Declaratory Judgment pursuant to 28 U.S.C. §§ 2201-2202, 

which judgment will fully and authoritatively declare the respective rights and obligations of the 

Fund and Fontainebleau. 

FONTAINEBLEAU IS ENTITLED TO A STAY OF THE GRIEVANCE ARBITRATION 

INITIATED BY THE UNION PERTAINING TO WHETHER IT OWES 

CONTRIBUTIONS TO THE FUND FOR FORMER, LAID OFF, EMPLOYEES. 

22. The Union has initiated a grievance arbitration against Fontainebleau in which it 

contends that Fontainebleau owes contributions to the Fund in May, 2020 for former employees 

laid off due for the month of April (when no bargaining unit members were employed) and has 

recently claimed that it is “amending the allegation to assert a continuing violation, which includes 

the hotel’s failure to make such payments in June and July (assuming that the hotel fails to do so).” 

The Union’s grievance alleges that the CBA requires these payments to the Fund despite the fact 

that the contributions, if any, are owed to the Fund and the Fund is the only entity that has a viable 

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claim to such amounts. Allowing the arbitration process to go forward will cause Fontainebleau 

irreparable harm because it will force Fontainebleau to litigate the same issue before two different 

tribunals with potentially conflicting results. 

23. The CBA, Article 26, Section 12, permits this Court to issue a stay of any 

arbitration, as it states in pertinent part as follows [typographical error in original]: 

Section 12: The arbitration herein described shall proceed to completion upon the 

merits unless the party objecting hereto obtains a court order stating such 

arbitration. 

Exhibit 2, Article 26. 

24. Fontainebleau is entitled to a stay of the arbitration proceedings pending this 

Court’s ruling as to whether it owes contributions to the Fund for individuals who have been laid 

off. 

25. A stay of the arbitration by virtue of this Court’s exercise of its traditional power 

to order injunctive relief is warranted as a matter of law because the real party in interest as to 

benefit contributions is the Fund, not the Union. A stay of the arbitration would preserve the status 

quo until such time as this Court determines the legal issues described in Plaintiff’s claim for 

declaratory relief. Fontainebleau will be irreparably harmed by permitting the grievance 

arbitration to proceed because the Fund, a non-party thereto, would not be bound by any decision 

by the arbitrator on the issue of the duty to contribute and Fontainebleau would then be exposed 

to a subsequent federal collection suit by the Fund even if Fontainebleau prevails in arbitration. 

Allowing the arbitration to proceed would, therefore, expose Fontainebleau to unnecessary 

expenditure of fees, expenses, and labor in defending the arbitration at a time when preserving 

funds and devoting managerial attention to re-opening are of the utmost importance to seeing the 

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Fontainebleau Miami Beach Hotel resume its place in the life and the economy of Miami Beach. 

This Court is, therefore, the proper forum to afford all parties complete and final relief. 

26. Fontainebleau has a great likelihood of success on the merits pursuant to the 

allegations set forth above in that, under the CBA, Fontainebleau is only obligated to make 

contributions to the Fund for “eligible employees.” After a formal layoff, the laid-off worker is 

no longer an “employee,” but is merely an individual with a contingent right to recall for a set 

period of time. 

27. Defendants will not suffer any harm from the injunction because this Court will 

decide the very issue on which the Union seeks a decree in the arbitration, and will do so pursuant 

to the Federal Rules of Civil Procedure, which are “[to] be construed, administered, and employed 

by the court and the parties to secure the just, speedy, and inexpensive determination of every 

[civil] action and proceeding.” By contrast, the threat of monetary injury to Fontainebleau at this 

time of immense financial uncertainty and hardship caused by the global pandemic outweighs 

whatever supposed damages the Defendants may claim they will suffer because of the proposed 

injunction. This imbalance is all the more pronounced because, if Fontainebleau prevails in the 

arbitration, the grievance arbitration would not bind the Fund. An order staying the grievance 

arbitration would not expose the Union to any damage as any contributions that may be owed will 

only be payable to the Fund and not the Union. 

28. Finally, the public interest favors the issuance of an injunction staying the grievance 

arbitration because this Court has the power and jurisdiction to issue a final declaration as to the 

rights and obligations of all interested parties in an efficient manner without unnecessary 

expenditure of fees, costs, and other expenditures. 

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29. Moreover, the continuation of the arbitration process poses two threats to this 

Court’s jurisdiction to proceed with this matter. First, the rules governing the arbitration process 

are very different from the Federal Rules of Civil Procedure and the Federal Rules of Evidence. 

Thus, having arbitration conducted on a separate track is a threat to this court’s ability to control 

the process by which the issue in this case will be decided. Second, if by some chance the 

arbitration concludes before this Court renders its judgment in this case, Defendants may argue 

that the arbitral award is binding on this court under the doctrines governing issue and/or claim 

preclusion, effectively depriving this Court of the power to decide the issue for itself. 

30. Fontainebleau has retained undersigned counsel to represent it in connection with 

this action and has and will continue to incur legal expenses including costs and attorneys’ fees in 

connection with pursuing the relief described herein. 

WHEREFORE, Fontainebleau requests the following relief: 

1. The Court enter a Declaratory Judgment, pursuant to 28 U.S.C. §§ 2201-2205, that 

(a) each of the laid off former employees of Fontainebleau was not an eligible employee under the 

CBA from the date of his or her lay off until the date, if any, on which he or she was recalled by 

Fontainebleau and returns to employment in a bargaining unit position; and (b) Fontainebleau has 

no obligation to make health care contributions to the Fund with respect to any of the laid off, 

former employees of Fontainebleau as they are not covered an eligible employees under the CBA 

from the date of his or her lay off until the date, if any, on which he or she was recalled by 

Fontainebleau and returns to employment in a bargaining unit position; and 

2. The Court grant an injunction enjoining the Fund and the Union or either of them 

from commencing or maintaining any action or proceeding in law or equity in any court, federal 

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or state, or before any tribunal, to collect contributions claimed to be delinquent for the laid off 

former employees of Fontainebleau; 

3. The Court issue injunctive relief in the form of an order, pursuant to the terms of 

the CBA, Article 26, Section 12 (Exhibit 1), staying the grievance arbitration initiated by UNITE 

HERE, Local 355 against Fontainebleau; 

4. The Court enter an order, pursuant to Section 4301(e), directing the Fund to pay the 

reasonable attorney fees and costs of litigation incurred by Fontainebleau, in the prosecution of 

this action. 

Respectfully submitted, 

OGLETREE, DEAKINS, NASH, SMOAK & 

STEWART, P.C. 

/s/ Russell S. Buhite 

Russell S. Buhite, FL 0831085 

Russell.Buhite@ogletree.com 

1201 Third Avenue, Suite 5150 

Seattle, WA 98101 

Telephone: 206-693-7057 

Fax: 206-693-7058 

/s/ S. Kathleen Massing 

S. Kathleen Massing, FL 0722219 

Kathleen.Massing@ogletree.com 

100 North Tampa Street, Suite 3600 

Tampa, FL 33602 

Telephone: 813-289-1247 

Facsimile: 813-289-6530 

Attorneys for Plaintiff FONTAINEBLEAU, 

HOTEL FLORIDA, LLC 

43317811.1 

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