A three-second video, a union arbitrator, and a public-policy argument that fell flat on appeal
A federal appeals court has told a Chicago hotel it cannot fire a worker over a pocket knife when its own arbitrator said suspension was enough.
The Seventh Circuit's June 5, 2026 decision affirmed an arbitration award reinstating an employee terminated by the company, which does business as Chicago Hotel Collection. The ruling is a clean example of how federal courts treat public-policy challenges to arbitration awards when the underlying dispute is a workplace discipline case under a union contract.
The events were short. According to the opinion, closed-circuit video showed the worker take the knife out of his pocket at 38 seconds, smile at a co-worker at 41 seconds, and put it away at 43 seconds. The co-worker felt threatened. Hotel management had known the worker carried the knife and pulled it out from time to time, but he had never used it to injure or confront another worker. Police came and took the knife because its three-and-a-half-inch blade exceeded Chicago's two-and-a-half-inch limit for pocket knives. The worker was not charged or even issued a ticket.
The hotel fired him. Unite Here Local 1 grieved. The parties' collective bargaining agreement called for random selection of an arbitrator from a list of nine names. A union representative entered the nine names into random.org. It picked Peter Meyers. The hotel objected on the ground that Meyers was already arbitrating another dispute between the same union and hotel, and asked the court to appoint someone else under Section 5 of the Federal Arbitration Act.
District Judge Kendall refused. The contract set out a method, the method had been followed, and the agreement said nothing about disqualifying an arbitrator who happened to be handling another matter between the same parties. Meyers then reviewed the events and found that the conduct warranted a ten-day unpaid suspension but did not meet the just-cause standard for discharge. He ordered the worker reinstated with back pay, minus ten days' wages.
The hotel refused to comply. District Judge April Perry granted the union's motion to confirm the award. The hotel appealed.
The Seventh Circuit was unpersuaded. Writing for the panel, Judge Easterbrook said the arbitrator had reviewed the events and concluded they were not threatening, and a reviewing court cannot disturb an arbitrator's factual findings. Beyond that, the court said, Illinois public policy against workplace violence is aimed at people who commit violence, not at employers trying to choose how to respond to actual or implicit threats. At argument, the hotel conceded that nothing in any statute, regulation, or judicial doctrine would have prevented it from imposing the same ten-day suspension the arbitrator imposed. That concession, in the court's view, ended the public-policy argument.
On arbitrator selection, the court was equally direct. The collective bargaining agreement set out a method and the method had been followed. The fact that the union and employer often agreed on an arbitrator without going through random selection did not change the contractual procedure or make it inadequate.
Easterbrook closed with a pointed aside. He listed five prior Seventh Circuit decisions and a Supreme Court ruling rejecting public-policy challenges to arbitration awards, and said it was disappointing that the hotel's counsel had ignored every one of them.
For HR leaders, the practical message is narrow but useful. The decision does not say workplaces must tolerate weapons. It says that when a union contract sends discipline to arbitration, the arbitrator's factual findings and the just-cause analysis are where the case is won or lost. A public-policy appeal pitched at a high level of generality - workplace violence is bad, therefore the firing should stand - will not get an employer past confirmation. Weapons policies, workplace safety protocols, and the disciplinary record still matter. They just have to do the work at the arbitration table.
