Geez, that is nuts. Around here, the inspectors would have failed us but put us on our honor to remedy minor infractions like that, without requiring a re-inspection.
One memory I have about NJ was when I was 14, I accompanied my dad on a job he got building an office on a mezzanine inside of a large warehouse (if I remember right, they stocked and sold food coloring and flavoring). I used to like to go on his jobs and do detail work like install baseboard trim, put in the door lock sets, etc... Well, the union dicks in the plant complained to management that an under age kid was working there, and made a big stink. Union rep came out and everything. Turns out there was nothing wrong with it and nothing they could do about it, but I did enjoy seeing my dad tap a guy on the chest with the butt of his hammer and yell "mind your own G.D. business!". He had other jobs in NJ, and getting harassed by union employees was a routine thing. They just did not like seeing out of state companies coming in and doing business.