The Critical Nature of Labor and Employment Diligence in Transactions

Sheppard Mullin Richter & Hampton LLP
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Sheppard Mullin Richter & Hampton LLP

Because nearly every company has a workforce, labor and employment issues permeate nearly every transaction. Employment-law successor liability presents a substantial risk in transactions even when purchase agreements seemingly contain protective language. The general rule that an asset buyer does not assume a seller’s liabilities does not necessarily apply in the employment context, at least not in all cases. Targeted labor and employment diligence helps to identify potential areas of post-acquisition risk. Diligence also helps foster a greater understanding of the seller’s business and its workforce, making for a smoother post-acquisition integration effort. We regularly counsel our domestic and multinational clients on the various labor and employment phases of a transaction – from the acquisition work, including purchase agreement and diligence review and ancillary agreement drafting, to post-acquisition strategic employment counseling and litigation.

Join us for our conversation with Michael Cohen on Episode 117 of the Nota Bene Podcast, where we canvass the importance of employment and trade secret diligence in corporate transactions and related post-acquisition integration strategies.

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.

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