A federal judge has denied a motion for a preliminary injunction by the Roosevelt Hotel, which sought to avoid paying its laid-off workers while challenging a law requiring them to do so. The ruling came in the case of RHC Operating LLC v. City Of New York et al., case number 1:21-cv-09322, U.S. District Court for the Southern District of New York.
The judge ruled that New York City can continue to enforce the law against the hotel, despite its legal challenge to the law, which requires hotels to pay laid-off workers $500 per week. The court reasoned that neither the Employee Retirement Income Security Act (ERISA), nor the National Labor Relations Act (NLRA) preempted the law, nor did the law appear unconstitutional. The hotel had not proven that it was likely to succeed on the merits of its suit.
The city’s severance mandate went into effect in October 2021. The law requires hotels that had at least one hundred rooms on March 1, 2020, that closed or had a mass layoff after that date, to pay each laid-off worker $500 per week severance pay for 30 weeks, beginning on October 11, 2022. Once the hotel reopens and recalls at least 25% of its workers, they no longer must pay the severance.
The Roosevelt permanently closed its doors in October 2020, so it is subject to the mandate. In November 2021, the hotel filed suit against New York City, the mayor, and the city council members who voted in favor of the law. The hotel argued in its suit that ERISA and the NLRA preempted the law and that it violated the contracts, due process, and equal protection clauses of the U.S. Constitution.
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