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When an Employment Contract Isn't in Force

May 02, 1999

Q. I was employed at a hotel under a contract that either party could cancel after 30 days' notice. As part of the agreement, I was supplied with a room.

The business was sold. The new owners said they did not require my services and gave me seven days to vacate the property. When a business is sold like this, do the new owners have to honor any of the terms in an employment contract?--J.G., Beverly Hills


A. If the hotel was owned by a company rather than one or more individuals, and if one or more persons sold stock in the company to others, the owner of the hotel remains the same. It's the same company even though there may be different owners--and your contract remains binding on the company.

However, if the hotel was owned by one or more individuals, rather than by a company, or if it was owned by a company and sold as an asset rather than in a stock transaction, the new owners are not required to honor your contract.

Of course, you still have a contract with the former owners, who may be liable for breaching that contract by not giving you 30 days' notice.

--Deborah C. Saxe

Management attorney

Heller Ehrman White & McAuliffe

If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626, or e-mail it to Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice.

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