There are also drawbacks for the owner that the hotel operator is the employer. In such cases, the owner has more restrictions on what he can do with the employees in the event of termination of the operator or transfer of the hotel. For example, we have seen hotel operators ending their relationship with a hotel, encouraging employees to find new jobs before selling them. The operator informs the staff that the operator is leaving, that everyone loses their job and quickly finds new jobs. WarN Communications can easily be misunderstood by staff, unless the owner can explain that the operator`s termination is rather “technical” and that all employees are interviewed for their former position, pending that virtually all employees are rehired. “contracts,” all contracts, agreements, leases, subletting, licenses or other agreements or obligations, written orally. A hotel buyer wants the hotel purchase contract to provide that the seller is solely responsible for unpaid employee wages, wages, bonuses, profit shareholdings and other benefits. Where possible, we want our buying customers to even the amount of these commitments and require the seller to make these payments before (or at the end of) the transaction. If the hotel operator is the employer and the buyer assumes the seller`s obligations in the hotel operating contract, the hotel operator may make the buyer liable for these costs if the seller does not pay them.
In general, the requirements of the WARN Act apply when the hotel employs at least 100 full-time staff and at least 50 employees are laid off as a result of the transaction. If the requirements of the WARN Act apply, the seller is responsible for the deadline until the closing date, and the buyer is responsible for the termination of the layoffs after closing. If the buyer reinstates all employees or at least enough employees, so that fewer than 50 employees will lose their jobs at the hotel after the date of sale, the requirements of the WARN Act will not apply and employees will not be notified. Marta Fernandez is a labour and employment partner and is a senior member of JMBM`s Global Hospitality Group®. As head of labour law with more than 20 years of experience, Marta specializes in representing hospitality clients in all aspects of work and employment, including labour management relationships such as union prevention, collective bargaining for one and several employer bargaining units, neutrality agreements and the defence of unfair labour practices before the NLRB.