Employment Law This Week: Sexual Orientation Discrimination Suits, Tip Pooling, Successor Liability, Trade Secrets, Workplace Solicitation
Successor liability is a powerful collection tool for multiemployer plans under ERISA. It most commonly arises in the context of asset sales (although it is not limited to that situation)....more
On January 27, 2022, in New York State Teamsters Conference Pension and Retirement Fund v. C&S Wholesale Grocers, Inc., the Second Circuit joined the Third, Seventh, and Ninth Circuits in applying the doctrine of successor...more
Key Takeaways: The Third, Sixth, Seventh, and Ninth Circuit Courts of Appeals have recognized the doctrine of federal common law successor liability for claims brought under certain federal labor and employment statutes,...more
As a general rule, an asset purchaser does not assume the seller’s liabilities, including its ERISA obligations. Courts, however, have formulated an exception to this general rule via the doctrine of successor liability. ...more
How Do I Hold You Liable? Let Me Count The Ways . . . When the owner(s) incorporate an existing business, the corporation is not necessarily a tabula rasa with respect to the creditors of the business being...more
In Crashfund LLC v. FaZe Clan, investors in Wanderset Inc. sued successor e-gaming company, FaZe Clan. Wanderset investors claimed that their agreements with Wanderset granted them conditional rights to obtain stock...more
The recent decision of the Ontario Court of Appeal in Manthadi v. ASCO Manufacturing, 2020 ONCA 485, analyzed the common law approach to the calculation of reasonable notice when a vendor terminates a worker’s employment in...more
Seyfarth Synopsis: In acquiring a company in bankruptcy, there is often a tendency to think this guarantees the purchaser will be “free and clear” of any liability (including so-called “successor liability”). This is not...more
When buying a business, purchasers must take into consideration the possibility of “successor liability” – that is, the buyer’s assumption of the seller’s liabilities and prior conduct upon purchasing a corporation....more
A corporation that acquires the assets of another is generally not liable for the pre-existing liabilities of the acquired corporation. However, as the Commercial Division’s recent decision in 47 East 34th Street (NY), L.P....more
Asset Buyers, beware. If the Seller has union-represented employees, and you intend to hire some or all of those employees and operate the assets as a union-free employer, take care to avoid becoming an accidental successor....more
When one employer purchases the assets of another and intends to employ some or all of the seller’s employees, it is very common for the asset purchase agreement to require the seller to disclose certain personnel information...more
A business swoops in and buys substantially all of the assets of a competitor in distress, but first does its due diligence and discovers the skeletons in the closet. The purchaser expressly does not assume the competitor’s...more
Buyers of assets typically like to pick and choose the assets and liabilities that they will acquire. In general, the law permits this. Thus, a corporation that purchases the principal assets of another corporation, will not...more
Yesterday, John Jenkins wrote in DealLawyers.com about successor liability in asset purchase transactions. Many practitioners may be unfamiliar with potential successor liability under California's Unemployment Insurance...more
The Sixth U.S. Circuit Court of Appeals (Ohio, Kentucky, Tennessee and Michigan) recently expanded successor liability for an underfunded pension plan to an asset purchaser holding common control over assets purchased from...more
Last month, Professor Stephen Bainbridge posed the question of whether California recognizes the de facto merger doctrine outside of the successor liability context. Here was my response. Less than two weeks later, the...more
Yesterday, Professor Stephen Bainbridge noted that California has applied the de facto merger doctrine to an asset purchase transaction to hold the acquiring corporation liable for tort liabilities of the selling corporation....more
On June 1, 2018, the U.S. Court of Appeals for the Ninth Circuit ruled that an asset purchaser that was deemed a successor was liable to pay the seller’s withdrawal liability even though the purchaser did not have actual...more
Seyfarth Synopsis: A Maryland federal district court recently found that a successor employer could be liable in an EEOC lawsuit for its predecessor’s alleged employment discrimination. ...more
The Puerto Rico Supreme Court (“PRSC”) recently issued an Opinion in the case of Roldán Flores v. M. Cuebas, 2018 TSPR 18, 199 D.P.R. __ (Feb. 6, 2018), in which it addressed again the requirements for applying the “successor...more
A common method for business expansion is for one company to acquire another company’s operations and then merge the operations into the acquiring company. However, even when care is taken to structure such acquisitions to...more
In a decision handed down by the Seventh Circuit on June 24, 2016, the court warned that a lack of familiarity with the concept of withdrawal liability cannot be used by a buyer of business assets as an excuse to avoid...more
In Resilient Floor Covering Pension Trust Fund Board of Trustees v. Michael’s Floor Covering, Inc., 801 F.3d 1079 (9th Cir. Sept. 11, 2015), the U.S. Court of Appeals for the Ninth Circuit joined the Seventh Circuit in...more
In a recent decision that has important implications for purchasers of assets that come with a multiemployer union pension plan, the U.S. Court of Appeals for the Seventh Circuit held in Tsareff v. ManWeb Services, Inc., 794...more