Seventh Circuit Affirms Confirmation of Arbitration Award Based on Appellants’ Failure to Assert Objections During Arbitration

The dispute traced back to 2021, when Remo Polselli, acting through an entity (Allegiant Equities LLC), bought the Inn of Chicago and installed Elmar Hotel Management LLC as the operator. The city of Chicago then approached Polselli about using the property to house displaced migrants. Polselli agreed and signed the deal in his individual capacity. The housekeeping and food service work that would normally have gone to unionized staff was routed to an outside agency and then to another Polselli-controlled entity (Social Club Management LLC), without providing notice to the union. The union responded by filing grievances and filing an unfair labor practice charge with the National Labor Relations Board, and arbitration ensued.

After hearings at which Polselli, his wife (manager of Elmar), and the inn’s designated union contact all appeared through the same lawyer, the arbitrator sided with the union. He found that “nothing in the [Group Sales Agreement] remotely suggest[ed] the operation of the building wasn’t still a hotel.” On the question of who counted as the “employer,” the arbitrator concluded that Allegiant, Elmar, and Social Club “are practically speaking all parts of the same operation substantially under the personal control of Mr. Polselli as the Inn of Chicago.” The arbitrator found that the group had violated both the collective bargaining agreement and the National Labor Relations Act by cutting out unionized labor without notice or bargaining. The district court confirmed that award.

On appeal, the appellants argued that Allegiant, Polselli, and Social Club never agreed to arbitrate, so the arbitrator had no power over them. The court, however, disagreed. While “the general rule is that non-signatories to an arbitration agreement are not bound by the resulting decision,” that protection disappears where “a party willingly and without reservation allows an issue to be submitted to arbitration,” because such a party “cannot await the outcome and then later argue that the arbitrator lacked authority to decide the matter.” The employers were all present for at least part of the hearings, and they all shared the same counsel, who described himself as the “attorney for each respondent” and never suggested he was appearing solely for Elmar or that any of the employers objected to arbitrability.

Their other theory, that the arbitrator overstepped by deciding who was the “employer” and whether the building was still a “hotel,” fared no better. Because the arbitrator’s decision “was rooted in the CBA and nowhere else,” and because the employers argued those questions on the merits without objecting to the arbitrator’s authority, the court upheld the district court’s findings.

The court likewise rejected the employers’ due process complaints, finding that everyone involved had received adequate notice of the proceedings and that the arbitrator’s adverse inference from Polselli’s wife’s last-minute refusal to testify was “just one of many things he weighed in reaching his ultimate determination,” not an improper burden shift. A related public policy argument, framed as an improper “piercing of the corporate veil,” was, in the court’s view, simply “a rehash of the arguments that they did not accede to the arbitrator’s authority and that the arbitrator had no authority to find them to be ‘Employers.’” The Seventh Circuit thus affirmed.

Elmar Hotel Management, LLC v. Unite Here Local 1, No. 25-2307 (7th Cir. 2026).