Buy the Hotel, Buy the Union

A new owner took over a Parsippany hotel and tried to leave the union at the door. The NLRB just told him it doesn’t work that way. (Shhh… sometimes it can work that way. I know. I’ve done it dozens of times.)

The Board affirmed that Fairfield Parsippany, which took over a Fairfield Inn & Suites from prior operator JSK in August 2023, was a successor employer to a unionized workforce — and that it broke the law trying to dodge that status.

Here’s the playbook the Board shut down.

Fairfield refused to hire six known supporters of the Hotel and Gaming Trades Council to keep the union from carrying over. Per the decision, it also surveilled employees, interrogated them about union support, told workers to interrogate their coworkers, and solicited a decertification petition. Classic moves, all unlawful.

The clever defense fell flat. Fairfield argued a New Jersey hotel worker retention statute forced its hiring decisions. The Board didn’t buy it — because Fairfield admitted it didn’t even know the statute existed when it hired nine of JSK’s former employees. You can’t blame a law you’d never heard of. It “freely chose” to hire a majority of the predecessor’s workforce, which is exactly what triggers successor bargaining obligations.

This is an often misunderstood concept in deal-making. When you buy a business and keep a majority of the seller’s employees, you generally inherit the duty to bargain. Cherry-picking who you hire to break the union isn’t a loophole — it’s the violation.

That said, there are ways to structure the deal and set up the new company to avoid successor union obligations. About 15 years ago I did just that in Palm Springs, California and met some of my favorite clients, even if he’s a Notre Dame fan… I digress.

Back to the Parsippany case. The result: a bargaining order, reinstatements, backpay, and a federal 10(j) injunction along the way.