$2.7 Million For Illegally Fired HV Hotel Workers: NY AG

RYE BROOK, NY — Hotel workers who learned they would be abruptly laid off just prior to the start of the global coronavirus pandemic are now receiving backpay following a courtroom victory.

Workers who were unlawfully terminated without sufficient legal notice and denied their rights and wages from the Doral Arrowwood Hotel and Conference Center when it abruptly shut down will receive $2.7 million in restitution, New York Attorney General Letitia James and State Senator Shelley Mayer announced.

James joined a lawsuit and successfully argued that the hotel’s lenders — U.S. Bank National Association and Anderson Hill Road Capital, LLC — violated the New York Worker Adjustment and Retraining Notification (WARN) Act by failing to give workers 90-day termination notices and failing to pay up to 60 days of lost wages for failure to provide such notice. As a result of the lawsuit, James said her office recovered the lost wages for the 250 affected workers, who have already started receiving payments.

"More than 250 workers at the Doral Arrowwood Hotel were left to fend for themselves when the hotel shut down without sufficient notice, leaving them jobless right before the start of the pandemic," James said in a statement announcing the courtroom victory. "Today, we deliver big for these impacted workers — finally providing the wages they were unfairly denied and holding these greedy companies accountable for violating their rights."

The Doral Arrowood Hotel and Conference Center in Rye Brook employed hundreds of workers. In December 2019, management informed workers the hotel would be shutting down in three weeks time and employees would be terminated at the beginning of January 2020.

Under the New York WARN Act, businesses with 50 or more employees are required to give workers a 90-day notice of termination if the business is closing. If an employer fails to give workers the adequate 90-day legal notice, employers are required by the WARN Act to pay workers up to 60 days of lost wages. The hotel failed to comply with the WARN Act, leaving workers to fend for themselves without pay just weeks before the start of the coronavirus disease 2019 (COVID-19) pandemic, the attorney general's office said.

The AG joined a lawsuit on behalf of the New York Department of Labor in an existing foreclosure proceeding in Westchester County State Supreme Court brought by U.S. Bank against Doral Arrowwood. The AG office argued that U.S. Bank (which held a mortgage secured by the hotel’s property) and Anderson Hill Road Capital (which acquired the mortgage note from U.S. Bank) were responsible for payment of WARN Act damages to the affected employees because they caused the hotel’s abrupt shutdown when they refused to fund the hotel’s operations deficiency which would have allowed it to continue to operate and provide proper WARN Act notice to its employees.

Justice Gretchen Walsh agreed with the argument and ordered U.S. Bank and Anderson Hill to pay $2.7 million in lost wages to the workers.

“I’m glad we will soon have the money,” former Doral Arrowwood Carlos Lainez said. “Although the process took time, I’m grateful for the continued advocacy to protect our rights."

Anderson Hill entered into a Stipulation of Settlement with New York and the employees. The firm agreed to pay the full amount set in the court order. According to the AG, the WARN Act stipulation asserts that the former employees are owed $2,482,884.88 with an estimated employment tax amount of $223,459.64, for a total of $2,706,344.51.

“This is wonderful news for the Doral Arrowwood workers who have finally gotten the money they deserve and are entitled to after being terminated without warning on Christmas Eve nearly two years ago,” said State Senator Shelley B. Mayer said praising the ruling. “Upon hearing that they were let go, I immediately reached out to ensure their rights would be protected under the WARN Act. We continued to advocate for the workers with the New York state Department of Labor and the Office of the Attorney General. For the past year and a half, we remained in contact with the workers to ensure they were informed and their voices were heard throughout the case, including attending court appearances with them."

The case was the first in New York in which a non-employer third party, in this case U.S. Bank and Anderson Hill, were found liable for WARN Act damages. The court agreed with the state that under receivership law, "special circumstances" allowed for the lenders (who would ultimately take over the hotel and who had cut off funding unexpectedly) to be held liable.

"These men and women were loyal, hardworking employees, but the loyalty they exhibited was not returned by Doral Arrowwood," Westchester County Executive George Latimer said. "I applaud their courage for stand up for their rights and I commend Attorney General James and Senator Mayer for their leadership. They gave voice to people who had no voice."