Home Hotel service New Jersey enacts last-minute bill tying hands of successor hotels | Smaller

New Jersey enacts last-minute bill tying hands of successor hotels | Smaller

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On January 18, 2022, Governor Philip D. Murphy signed NJ A6246/S4295, which significantly restricts business discretion for successor hotels. The New Jersey Senate and General Assembly passed the bill overwhelmingly on the last day of the previous legislative session.

In a nutshell, this bill requires successor hotels to offer their predecessor’s employees continuous employment for at least 90 days (absent termination for ’cause’ – an indefinite term) and to only proceed with any downsizing in order of seniority and experience. .” It further requires rehiring based on seniority when positions are reinstated during the retention period. The bill requires the successor to keep a record of each job offer and provide each proposed employee with a written performance appraisal at the end of the 90-day period. If performance is satisfactory, the successor is required to offer the employee continued employment.

As a reminder, January 10, 2022 was the last day of the 2021 legislative session and the last day of the “lame duck” session (when new lawmakers were elected, but before they took office). This lame duck session was particularly notable for the loss suffered by incumbent Senate Speaker Stephen M. Sweeney in the November election.1 The influential figure’s impending exit is believed to have sparked a rush by lawmakers to pass a series of employee-friendly bills, including A6246.

Noteworthy Definitions and Provisions

“Hotel” is broadly defined in the legislation as “a hotel, apartment hotel, motel, inn, tourist camp, tourist cabin, tourist house, rooming house or boarding house, club or a similar establishment where rooms are provided against payment to transients or permanent guests. Because there are no size or income requirements in the definition, this bill could potentially affect employers ranging from large hotel chains to small home rental companies. Similarly, “hotel employer” is broadly defined as “any person who owns, controls, or operates a hotel, and includes any person or contractor who, in the capacity of management, supervision, or confidentiality , employs one or more hotel service employees”.

The bill provides significant job protection for employees in the event of a change in control of the hotel. Specifically, a Successor Hotel Employer “shall, during the Hotel Service Employee Retention Period, offer each eligible Hotel Service Employee employment for at least 90 working days under the terms and conditions established by the Successor Hotel Employer. , without reduction in salary or benefits…” in the absence of a dismissal for “cause” or a reduction in staff, which can only be carried out in reverse order “of seniority and experience When positions are restored, employees must be rehired in order of seniority.

Importantly, “cause” is not defined in the bill, leaving significant room for disputes as to whether a termination was permitted under the bill. The bill creates a cause of action allowing “[a] hotel service employee dismissed or not retained in violation [of certain parts of the bill]to take legal action to recover: (i) back wages, (ii) liquidated damages, (iii) “benefits costs that the successor hotel services employer would have incurred for the employee under the employee benefit plan” and (iv) attorneys’ fees.

The bill also imposes administrative burdens on hotels. Among other things, it (i) requires a successor hotel employer to retain written verification of every offer of employment made for at least three years from the date the offer is made; and (ii) requires the successor hotel employer – at the end of the hotel service employee retention period – to complete “a written performance evaluation of each retained hotel service employee. . . .” An employee whose performance is “satisfactory” shall be offered “continuous employment under the terms and conditions established by the successor hospitality employer. Again, the term “satisfactory” is not defined and is subject to interpretation. and contestation, exposing the hotel employer to potentially significant liabilities and penalties.

The legislation also imposes binding conditions on hotels whenever their services are “disrupted”. The bill defines a “disruption of service” as a situation in which a certain specified condition “significantly affects[s] or is likely to significantly affect a guest’s use of a room or use of a hotel service. These conditions include (i) certain construction works, (ii) “the unavailability, for a period of 24 hours or more, of any advertised hotel equipment”, (iii) “the unavailability, for a period of 24 or more, of any device or technology advertised in the room” and (iv) “the unavailability of any accessibility feature advertised or required by law”. When such service interruptions occur, the law requires that a hotel operator provide, “in all changeable media in which the hotel advertises, solicits customers, or through which customers may book or reserve rooms or services, notification of the service interruption to each third party- third-party supplier and each customer who solicits or has entered into a reservation, reservation or agreement with the hotel operator or a third-party supplier for the use or occupancy of a room.” The legislation also specifies ent the requirements for such a notification, including what it must describe and how.

The bill further provides that certain conditions are deemed to substantially affect a guest’s use of a room or use of a hotel service. Such cases are: (i) “conditions of which the hotelier is aware, indicating the presence in the hotel of any infestation by bedbugs, lice or other insects, rodents or other vermin capable of spread disease or be carried, including to anyone, if the infestation has not been fully treated by a licensed exterminator within 24 hours of its identification”; (ii) “the unavailability for a period of 24 hours or more, of any utility service, including but not limited to gas, water or electricity where the unavailability only affects the ‘hotel location’; (iii) “or any strike, lockout or picket activity, or other demonstration or event for one calendar day or more at or near the Hotel.”

In the event of a service interruption, suspected or otherwise, room service or hotel guests may terminate their reservation without any charge, penalty or other cancellation charge. The hotel is not authorized to retain a deposit for such a canceled reservation.

Look forward

Passed despite opposition from the hospitality industry, the bill will soon impose a myriad of new logistical challenges on those involved in hotel transactions across the state. The bill also has a significant impact on the franchise industry and will certainly have a significant economic impact on a market sector that has been decimated by COVID-19.

The new requirements will reduce flexibility for successor hotel employers to manage their workforce by limiting layoffs in the first 90 days to those for ’cause’, limiting reductions in effect to those with the least ‘seniority’ and experience” and requiring these employees to be “rehired” first (with no time limit that employers must wait for these employees to accept or return to their jobs).

Due to these new challenges, hotel employers are strongly advised to seek legal counsel to resolve any issues that may arise should this bill become law. Littler’s WPI will continue to monitor similar legislation and bills that arise in other jurisdictions across the country.

Footnotes