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Court sides with Ritz-Carlton management in employee dismissal case

US District Court Judge Pedro Delgado-Hernández has decided in favor of Luxury Hotels International of Puerto Rico Inc., which does business as The Ritz-Carlton San Juan Hotel, Spa & Casino, dismissing the case filed against it by 154 former employees.

In the document dated March 31, 2022, the judge granted the hotel’s Motion for Summary Judgment on the case in which the former employees claimed that their “discharges were unjust, discriminatory, a pretext to provide lower benefits and without sufficient advance notice of termination, they initiated this action under the Worker Adjustment and Retraining Notification Act (WARN Act).”

The employees were laid off in April 2018, when Luxury Hotels International of Puerto Rico said that the property remained closed due to damages sustained from Hurricanes Irma and María in September 2017, with “no reopening date in sight.”

In the order, Judge Delgado-Hernández listed his reasons for siding with Luxury Hotels International of Puerto Rico Inc., starting with “the well-pleaded facts asserted in the complaint.”

He went back to September 2017, when the hotel sustained damages from Hurricanes Irma and María, including water filtering into the hotel’s lobby from side doors, water leakages, and debris.

The judge cited testimony from several employees at the time, including Jacqueline Volkart, who was general manager from April 2014 to October 2017. She rode out María in the property, and after the storm passed, she walked part of the premises, noting there was “a lot of sand everywhere, a lot of landscaping damages, and the tennis courts and the roof were severely damaged.”

She also walked inside the property and noticed that “the club lounge was severely damaged the rooms next to it were in very bad shape, there was a lot of damage and water especially in the high floors because they were closer to the roof, there was water everywhere, and there were broken windows,” according to the order.

She also reported significant water leaks on the casino roof, where the carpet was wet, the ceiling was cracked, and windows were broken.

Another employee, Jay Anthony Galindo, who held the position of senior regional security director, visited the property after the hurricane and described what he saw in the hotel as “the worst catastrophe that [he has] ever been involved in,” according to the order.

He also said there was significant sand damage outside, and water damage inside the property. He also reported seeing mold.

Another employee, Steve Contos, who was senior vice president of Caribbean & Luxury Portfolio Latin America, classified the condition of the rooms as mostly needing substantial improvements, including demolition.

The judge also cited a report by DBI Construction Consultants, a firm that assessed the damages to the property, addressing it to David Buck, an insurance adjuster. Essentially, the report stated that the site and hotel ground sustained “significant damage,” and due to those damages, Galindo recommended to Contos that the hotel be closed. Two years ago, the hotel reportedly reached an undisclosed agreement with its insurer.

Employees were called to an assembly in October 2017 and were told that if the hotel re-opened and they were rehired, the hotel would honor their seniority and benefits. In a conference call in March 2018, employees were told they would be terminated in April 2018, but were also told “that if they came back to work after the hotel’s reopening, their original employment start date would be honored and they would not undergo a probationary period,” according to the judge’s order.

Upon termination, the Ritz paid all its former employees for 32 hours per week from Sept. 20, 2017, until Dec. 14, 2017 — which they reportedly did not work — plus any accrued vacation time. On the final date, the employees received a voluntary payment of $1,000.

About two weeks ago, a group of former Ritz-Carlton employees staged a protest in front of the Isla Verde property, asserting their claims of unfair dismissals. They also reiterated their petition for severance pay under the WARN Act and damages for emotional distress, as News is my Business reported.

At the time, there had been no movement on the case since September 2021. But in the order issued last week, the judge stated that the hotel’s closing constitutes just cause for dismissing the employees.

“The rationale is not whimsical, arbitrary, or capricious. Further, seniority was followed in the terminations. Plaintiffs were not replaced by new or less senior employees in their occupational classifications,” the judge stated.

Furthermore, he said the hotel did not violate the WARN Act, which does not require a 60-day notice of a dismissal if the reason is the event of a natural disaster. The former employees were given a 41-day notice but received weekly payments that covered the 19-day deficit, the judge concluded.

Attempts to reach hotel officials were unsuccessful Monday. However, two weeks ago, a spokeswoman said plans call for reopening the property in late 2023.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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