Insights - Spring 2013: Developing Federal Common Law of Successor Liability


When a purchaser acquires substantially all the assets of a seller, the purchase agreement typically provides that the purchaser does not assume seller’s liabilities except to the limited extent specifically set forth therein. Nevertheless, a disclaimer of liability is not effective in all situations. State statutes typically impose liability on successors for sales taxes and certain similar obligations, and for that reason purchasers usually protect themselves, such as by escrowing a portion of the sale proceeds until full payment of such taxes and obligations is verified. Additionally, federal courts have judicially imposed successor liability based on violations of the Labor Management Relations Act (John Wiley & Sons, Inc. v. Livingston, 376 543 (1964)), the National Labor Relations Act (Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973)), Title VII of the Civil Rights Act of 1964 (Wheeler v. Snyder Buick, Inc., 794 F.2d 1228 (7th Cir. 1985)), the Employee Retirement Income Security Act of 1974 (Upholsterers’ International Union Pension Fund v. Artistic Furniture, 920 F.2d (7th Cir. 1990), the Age Discrimination in Employment Act (EEOC v. G-K-G, Inc., 39 F.3d 740 (7th Cir. 1986)), and the Family and Medical Leave Act (Sullivan v. Dollar Tree Stores, Inc., 623 F.3d 7707 (9th Cir. 2010)).

In a recent decision, the Seventh Circuit Court of Appeals expanded what it characterized as the “federal common law” imposing successor liability to the Fair Labor Standards Act (“FLSA”), which governs minimum wage and overtime paid to workers....

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Shumaker, Loop & Kendrick, LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.