Federal judge ends New York Hotel Association’s months-long battle over layoff law

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Honorary Judge Paul Oetken disagreed and dismissed the Hotel Association’s request for an injunction against the law.

“Layoff law likely doesn’t require an employer to create a plan because it doesn’t require an ongoing administrative program to pay mandatory severance pay,” he wrote.

Currently, any hotel that has not reopened to the public with at least 25% of its workforce must pay staff members $500 a week in severance pay for 30 weeks.

A similar claim was filed by the owners of the Roosevelt Hotel, which has been closed since December 2020 and has not reopened. The hotel is embroiled in an international dispute between its owner, Pakistan International Airlines, and Tethyan Copper, an Australian mining company that is trying to take control of the building.

Yet the Roosevelt is subject to severance packages despite being embroiled in litigation and being sued to avoid having to pay them.

Judge Oetken also denied their request for an injunction, according to a decision filed the same day as that of the Hotel Association.

The Hotel Association will not file an appeal, its chief executive Vijay Dandapani said, leaving the lawsuit dead in the water.

Despite outcry from merchant groups, the law produced the results the city had hoped for. Most of the city’s hotels reopened and brought back their employees before the November deadline, including the 399-room Omni Berkshire Place and the 1,300-room Grand Hyatt near Grand Central.

The Omni Berkshire, which was due to be permanently closed in June 2020, has reopened and avoided departure fines. Peter Strebel, president of Dallas-based Omni Hotels & Resorts, said reopening was a cheaper option than paying workers severance.

Advocates of the law, including the New York Hotel Trades Council, applauded its passage last fall for returning jobs to thousands of hotel workers.

“Immediately after the hotel worker layoff legislation was passed, we saw some of the city’s largest hotels announce their reopening and recall workers,” union president Rich Maroko said.

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