Healthcare entities, home healthcare agencies, and staffing registries considering a transaction in New Jersey must keep new obligations to certain employees in mind. On August 18, 2022, Governor Murphy signed into law New Jersey Senate Bill No. 315 (the Act), which created broad protections for many employees in the healthcare sector in the event of a change in control. The Act requires any change in control to be made pursuant to a contract or agreement between the parties that preserves the wages, benefits, and employment status of eligible employees.

Covered Health Care Entities

The Act covers health care facilities licensed pursuant to N.J.S.A. 26:211-1 et seq., which include, among others, general hospitals, diagnostic centers, treatment centers, rehabilitation centers, skilled nursing homes, nursing homes, outpatient clinics, home health care agencies, and residential health care facilities. The Act also covers staffing registries and home care services agencies as defined under N.J.S.A. 45:11-23. If a healthcare entity is part of a larger facility that contains non-healthcare entities or divisions, only the portion of the facility which is licensed pursuant to N.J.S.A. 26:211-1 shall be considered a “healthcare entity” for purposes of the Act.

Covered Transactions

“Change in control” is defined broadly to include any transaction involving a sale, disposition, or transfer of all or substantially all of the assets used in a healthcare entity’s operations or of a...

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