Navigating labor and employment considerations in mergers and acquisitions

Merger and acquisition (M&A) transactions are complex endeavors involving various legal, financial, and operational considerations. Among these considerations, labor and employment law and regulations play a crucial role in ensuring a smooth transition for both employers and employees. Whether it’s an asset purchase, a stock purchase, a merger, or another form of M&A deal, understanding and addressing key labor and employment considerations is essential to mitigate risks. This article will provide a brief overview of some of the key labor and employment considerations employers and business owners (whether as the seller or as the buyer) should keep in mind.

Due diligence

As part of any M&A transaction, all parties should perform thorough due diligence on each other. The due diligence process is often the longest and most time-consuming part of the transaction, but it’s essential to identify potential labor and employment issues.

Obtaining a deep understanding of both parties’ employment policies and practices allows all parties to operate efficiently during the deal, modify the structure of the deal, and affect the transition of employees and business operations pre- and post-closing. Proper labor and employment due diligence would include: