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Hotel not liable under WARN Act for layoffs

A U.S. District Court judge did not err by deciding that a hotel’s potential liability under the Worker Adjustment and Retraining Notification Act was completely offset by “voluntary” payments to employees who were discharged after the hotel closed, the 1st U.S. Circuit Court of Appeals has found.

The complaint was filed by plaintiff employees who were discharged after the defendant, Ritz-Carlton Hotel Spa & Casino, closed in the wake of Hurricanes Irma and Maria. Their complaint alleged that the defendant violated the WARN Act by failing to give them sufficient notice prior to their ultimate termination.

A U.S. District Court judge found Ritz-Carlton to be entitled to summary judgment because of a provision in the statute, 29 U.S.C. §2104(a)(2)(B). That provision reduces an employer’s monetary liability for a WARN Act violation by “any voluntary and unconditional payment by the employer to the employee that is not required by any legal obligation.”

The judge concluded that “if there was an advance-notice violation, the 19-day deficit would have been covered by the 32-hour weekly payments that plaintiffs received from September 20, 2017, to December 14, 2017; the April 12, 2018, payment; and the health-plan coverage that Ritz-Carlton provided to the employees up to March 31, 2018.”

That judgment was affirmed by a three-judge 1st Circuit panel.

“We are aware that the record shows that the weekly payments worth 32 hours of work per week, which were made from September to December 2017, preceded the notification that Ritz-Carlton provided in March of the termination that occurred in April,” Chief Judge David G. Barron wrote for the panel.

“And the employees did assert at oral argument — albeit for the first time — that those payments cannot reduce Ritz-Carlton’s liability unless they have a ‘link’ to the April 2018 termination. But the employees have failed to develop an argument about what kind of ‘link’ is required under the WARN Act or why such a ‘link’ was absent here. Nor have they pointed to any authority that indicates that the District Court’s reliance on the various payments was erroneous because the assertedly necessary ‘link’ between the payments and the notification of termination was missing,” Barron noted.

“Thus, the employees have failed to provide us with any ground that would permit us to conclude the District Court erred in relying on the various concededly ‘voluntary’ payments as an independent ground for granting summary judgment to Ritz-Carlton on the WARN Act claim,” Barron stated.

The decision is Rivera-Pina, et al. v. Luxury Hotels International of Puerto Rico.