New Law Protects New Jersey Hotel Workers’ Jobs After Change in Ownership or Management

New Jersey is an “at-will employment” state, meaning that employers may fire employees for any lawful reason, or for no reason at all, without necessarily having to show good cause. Note that employers are limited to “lawful” reasons for firing someone. New Jersey employment laws and those at the federal level protect workers from termination for a variety of unlawful reasons. Under a new law passed by the New Jersey Legislature and signed by the governor in January 2022, hotels in New Jersey may not fire any employees for a defined period of time after a change in ownership. The new law allows aggrieved employees to file suit for damages.

Numerous New Jersey laws bar wrongful termination by employers. The New Jersey Law Against Discrimination (NJLAD), for example, prohibits employers from discriminating against employees and job applicants on the basis of protected factors like race, gender, religion, and others. Firing someone because of their membership in a protected class is considered unlawful discrimination.

The NJLAD also bars employers from firing someone in retaliation for reporting alleged workplace discrimination. The Conscientious Employee Protection Act (CEPA) protects workers who report other types of unlawful activity, commonly known as whistleblowers. Employers may not fire whistleblowers or take other retaliatory actions towards them.

The federal Worker Adjustment and Retraining Notification Act (WARN) and its New Jersey equivalent govern how employers may handle mass layoffs. A “mass layoff” may involve 500 or more employees or at least one-third of an employer’s total workforce. Before the layoff may take place, New Jersey law requires an employer to give advance notice to the affected employees and pay them severance.

The governor signed A2646 into law on January 18, 2022. It took effect immediately. It applies to hotels that experience a “change in control” or “change in controlling interest or identity.” These terms refer to transfers of most of the assets or controlling interests in a hotel. Often, when ownership or management of a hotel changes hands, the new management replaces many employees. A2646 limits how and when this can happen.

The new law requires the former employer to provide the new management with a list of all employees with contact information, hiring date, employee classification, and pay rate within thirty days of the transfer in control. The new management must retain all employees for at least ninety days, known as the “retention period,” with the same pay and benefits as they had under the old management. They may only fire someone during the retention period for cause.

The hotel must do written performance evaluations for each retained employee at the end of the retention period. It must offer continued employment to everyone with “satisfactory” evaluations.

If the new management decides to downsize at the end of the retention period, it may only lay employees off based on their level of seniority in each job classification. If the hotel reestablishes those positions, it must offer the jobs to the laid-off employees.

An employee who has been fired or laid off in violation of this law may file a civil lawsuit for damages. The law allows workers to recover:
– back pay;
– the amount of back pay as liquidated damages;
– the cost of lost benefits; and
– attorney’s fees and costs.

The employment attorneys at the Resnick Law Group represent New Jersey and New York workers in claims for wrongful termination and other unlawful practices by employers. To schedule a confidential consultation to see how we can help you, please contact us today online, at 973-781-1204, or at 646-867-7997.

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