Takeaway: This case illustrates how a business purchaser can have notice of and therefore successor liability for discrimination and retaliation claims that arose before the sale. This case also underscores the importance of a buyer conducting proper due diligence. With knowledge of any potential liabilities that may exist, the purchaser might decline to buy the business or negotiate different terms, including a lower sales price, to account for this contingency.
One purchaser of a hotel was deemed a proper defendant based on successor liability while a prior purchaser was not regarding claims that arose under Title VII of the Civil Rights Act of 1964, according to the 10th U.S. Circuit Court of Appeals.
In 2009, Roark-Whitten Hospitality 2 (RWH2) acquired a hotel in Taos, N.M. In May 2014, RWH2 sold the hotel to Jai Hanuman. In September 2014, after issuing cause findings on charges filed with the agency, the Equal Employment Opportunity Commission (EEOC) sued RWH2 under Title VII, alleging that RWH2 subjected a group of Hispanic employees to a hostile work environment and disparate treatment based on race, color and national origin, and that it fired or constructively discharged them after they protested the discriminatory treatment. Upon learning that RWH2 had sold the hotel to Jai, the EEOC filed an amended complaint to include Jai as a defendant based on successor liability. In September 2016, Jai sold the hotel to SGI LLC, and the EEOC filed an amended complaint to...
The National Board of Directors of the Union of Liberian Associations in the Americas (ULAA) hereby alerts the general public to a growing pattern of impersonation, misrepresentation, and the unau...