August 23, 2022

New Jersey Now Protects Health Care Workers After Sales, Mergers and Other Control Changes

You've Reached Your
Free Article Limit This Month
Register for free to get unlimited access to all OnPractice content.
Register Now

Key Takeaways

  • The law is effective November 16, 2022.

On August 18, New Jersey Governor Phil Murphy signed into law S315 (22R), which aims to protect employment and wages and benefits during changes in control at health care facilities. When a change in control occurs, the former and "successor" health care employers will now both have new, and very significant, legal obligations. This law has the potential to alter dramatically the landscape of healthcare acquisitions across the Garden State.

The law is effective November 16, 2022 (90 days after enactment).

Continued Employment and Benefits

The law's most notable obligation is imposed on buyers or other successor employers. Specifically, for a period of four months after the change in control ("transition period"), successor employers must offer continued employment to eligible employees without reducing wages or paid time off, or reducing the total value of benefits (e.g., health care, retirement, and education benefits).

If an employee accepts the employment offer, the successor employer may not terminate the employee without cause during the transition period, unless the layoff is part of a larger reduction in force and the choice of retained employees is based on seniority and experience. Following the transition period, the successor employer must also evaluate all retained employees, and offer to continue their employment if their performance has been satisfactory.

The successor employer must maintain records of each employment offer and performance evaluation for at least three years following the offer or evaluation.

Other Obligations

The law also requires a written agreement between the former and successor employers, outlining the new law's obligations. And it requires the former employer to provide a list of eligible employees to both the successor employer and any collective bargaining representatives at least 30 days prior to the change in control. This list must contain the name, address, date of hire, phone number, wage rate, and employment classification of each eligible employee.

Also at least 30 days prior to the change in control, the former employer must notify each eligible employee of their rights under this law and post a notice of these rights in the workplace.


An "eligible employee" means any individual employed at least 90 days prior to the change in control, and a "health care entity" means any health care facility licensed under P.L. 1971, c. 136, a staffing registry, or a home care services agency.

A "change in control" means a sale, assignment, transfer, contribution, or other disposition of all or substantially all assets used in a health care entity's operations (including by consolidation, merger, or reorganization). It does not include any change in control in which either the former or successor health care employer is a government entity.

NLRA Preemption?

Compliance with this new act creates substantial issues for a unionized successor employer, including imposing upon that health care employer a duty to recognize and bargain with the predecessor's labor union and to assume the pre-existing collective bargaining agreement, consistent with legal principles established decades ago under the National Labor Relations Act.

But because these union-related obligations arise under the NLRA, there are arguments that the new NJ law is preempted. However, that question requires additional analysis beyond the scope of this alert.


Employees have a private right of action for unpaid wages if the successor employer fails to continue paying wages and other benefits at the previous rate, or for retaliation if the employer fails to make an employment offer to an eligible employee. Affected employees are entitled to all available remedies, including immediate reinstatement and damages for unpaid wages.

In light of these potential penalties, New Jersey health care facilities contemplating a consolidation, reorganization, or transfer of control must take this new law into account and should consult with experienced labor counsel before moving ahead with a transaction.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

More From Ballard Spahr

New York Restricts Automated Decision Making in Employment

By Timothy Dickens Ballard Spahr August 29 , 2022

Businesses operating in New York City should be aware of a local law addressing the use of automated employment screening and decision-making tools coming into effect on January 1, 2023.

Status Update: Federal Contractor Vaccine Mandate Injunction Narrowed

By Lila A. Sevener Ballard Spahr August 29 , 2022

On August 26, 2022, the United States Court of Appeals for the Eleventh Circuit narrowed the nationwide injunction of Executive Order 14042, which requires federal contractors and employees who work on or in connection with a covered federal contract, or share a workplace with another employee who works on or in connection with such contracts, to be fully vaccinated against COVID-19.

Unions Cannot Force OSHA to Issue Permanent COVID Standard

By Shannon D. Farmer Ballard Spahr August 26 , 2022

On August 26, 2022, the U.S. Court of Appeals for the District of Columbia Circuit turned back efforts by a group of unions seeking to force the Occupational Safety and Health Administration (OSHA) to quickly issue a permanent rule establishing protections for healthcare workers from COVID-19.

More From Employment Law

Certain Ukrainian and Afghan Parolees Employment Authorized Incident to Parole

By Linnea Porter Greenberg Traurig December 07 , 2022

Effective Nov. 21, 2022, USCIS announced that certain Afghan and Ukrainian beneficiaries paroled into the United States are employment authorized incident to parole.

City of Atlanta Adopts New Protections for Criminal History Status, Gender Expression

By Emily S. Borna Jackson Lewis P.C. December 07 , 2022

The Atlanta City Council has amended the City of Atlanta Anti-Discrimination Ordinance to extend protections to citizens on the basis of criminal history status and gender expression in employment, housing, and public accommodations.

Illinois Workers' Rights Amendment Provides Employees Fundamental Right to Organize

By Kerry Lin Davidson Greenberg Traurig December 02 , 2022

Heralded as a victory by unions and employee worker’s rights groups even before votes were confirmed, on Nov. 15, 2022, a majority of Illinois voters ushered in the Illinois Workers’ Right Amendment (IWRA).

Featured Stories