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17
OTHER HOTEL DEVELOPMENT
AND ACQUISITION ISSUES:
LABOR, EMPLOYMENT AND
BENEFITS CONSIDERATIONS
Sang-yul Lee
Seyfarth Shaw LLP
The author is a partner in Seyfarth Shaw’s Labor &
Employment national practice group as well as a
member of the firm’s Business Restructuring
Transactional Employment (BRTE) Group which
advises clients on all aspects of mergers and
acquisitions. Some portions of this section have
been adapted from the author’s materials for the
National Employment Law Council Annual
Conference
(2007)
M&A
panel,
entitled
“Remember the L&E with the M&A: Labor,
Employment and Benefits Implications in
Corporate Transactions.”
Biographical Information
Sang-yul Lee is a partner in Seyfarth Shaw LLP’s
Chicago office. He advises companies on all aspects of
labor and employment law as well as on issues related to
business acquisition and restructuring. His extensive
experience includes working with clients in several
industries, including: hotel/hospitality, food, trucking,
airline, publishing, media, financial services and
manufacturing. He has served as primary labor counsel on
over 30 M&A and bankruptcy matters. He has been
involved in over 50 union elections, including several
organizing campaigns involving the hospitality industry.
He is also one of the partners in charge of coordinating the
firm’s international practice. He is a former trial attorney
for the National Labor Relations Board.
Mr. Lee received his B.A from Northwestern
University, his J.D. from the University of Illinois, as well
as an A.M. in labor relations from the University of Illinois
– Institute of Labor & Industrial Relations. He is a member
of the American Bar Association Section of Labor and
Employment Law, International Bar Association
Employment and Industrial Relations Law Committee, the
National Asian Pacific American Bar Association, and
serves as a Board Member on the Korean American Bar
Association, Korean American Scholarship Foundation
Midwest Chapter, and University of Illinois – Institute of
Labor and Industrial Relations. He is also a Hearing Board
2
Member of the Illinois Attorney Registration and
Disciplinary Commission. In 2007 he was honored as one
of the “Forty Illinois Attorneys Under 40 To Watch.”
3
I.
INTRODUCTION
Owning and operating a hotel is a labor intensive endeavor.
Hotels have a multitude of employees in numerous areas:
housekeeping, bell-hops, parking valets, van drivers, front
desk, concierge, chefs/cooks, waiters, bartenders, banquet,
maintenance, reservations, sales, and management, among
others. And virtually none of these jobs can be outsourced to
an off-site vendor.
Larger hotels, especially those in metropolitan areas,
traditionally have been unionized. Several unions, but most
notably UNITE-HERE, have long-standing interests in hotel
bargaining units. And in the largest hotel markets, including
New York, Chicago and San Francisco, well-established
multi-employer associations bargain on behalf of many of the
unionized hotels.
In a purchase and sale context, successorship is a threshold
issue for the purchaser and seller. The issue of successorship
4
entails mostly union bargaining and contractual obligations
but also issues of assignment and assumption regarding
lawsuits, government charges and investigations, and
grievance-arbitrations.
Parties to a purchase and sale agreement must address the
issues that can arise under the Worker Adjustment and
Retraining Notification Act (WARN). WARN is a federal
law, but several larger states like California and Illinois have
state versions with lower numerical thresholds and additional
penalties.
In a union context, the seller generally has “effects
bargaining” obligations to its unions up to the closing of the
purchase and sale transaction. A purchaser does not have
any effects bargaining obligations prior to the sale; however,
it can have equally troublesome effects bargaining issues if it
takes certain actions post-closing such as closing the hotel for
conversion or renovation.
5
As a general rule, whether or not a seller’s employees are
represented by a union, a buyer’s failure to adequately
address human resources issues will play a pivotal role in the
success of the purchase or acquisition. While the business of
acquiring a hotel is regarded as a predominantly financial
transaction, before the ink has dried on the purchase and sale
contract, this financially-driven deal becomes, as one
business commentator once observed: a “human transaction
filled with emotion, trauma, and survival behavior –– the
non-linear, often irrational world of human beings in the
midst of change.”
To address this human component, studies suggest that
specialized legal counsel and senior human resources
personnel should be tapped to help facilitate the process of
acquiring, managing, developing and converting a hotel
property.
Whether the acquirer or ownership wishes to
manage the hotel property on its own or contract with a hotel
management company to manage the hotel and employ the
6
employees is one of the threshold issues facing ownership.
The following discussion will highlight what human resource
matters need to be addressed in order to increase the
likelihood that the acquisition, development or conversion
will be successful.
Among those factors include the
importance of conducting a thorough due diligence of labor,
employment, and employee benefit issues, establishing
regular and open communications with employees of both the
acquiring and acquired businesses so that employees are not
forced to get their information via the rumor mill, moving
swiftly on employee retention and reduction-in-force or RIF
matters, among others.
II.
IMPORTANCE OF CONDUCTING DUE
DILIGENCE
While a purchaser is likely to conduct adequate due diligence
with respect to matters pertaining to the acquired hotel’s
financial, tax, real estate and legal profiles, it often fails in its
efforts to thoroughly investigate the target hotel’s human
7
resources operations (i.e. employee relations, labor relations
and employee benefits/legacy costs).
In the process,
potentially costly liabilities of the seller can be overlooked or
ignored.
For example, one human resources professional
described how management was unaware that the company it
was seeking to acquire had a terrible ratio of retirees to active
employees and had not taken into account the pension
funding implications of those demographics (all of the
retirees were drawing benefits).
While not necessarily a
“deal breaker,” such information leads the parties to re-value
the deal.
A thorough investigation of a seller company’s human
resources operations should entail obtaining the following
past and current information: charge/litigation history,
internal complaints, any government audits (e.g. wage-hour
audit), benefit claims appeals, employee turnover rate data,
employee handbooks, benefit plans and plan documents (e.g.
summary plan descriptions), union organizing attempts,
8
documents pertaining to labor agreements and ratification
summaries, and grievance and arbitration history. This latter
information in particular enables the purchasing company to
better anticipate whether a nonunion facility will remain
nonunion, whether the company has a constructive
bargaining relationship in a unionized facility, and whether
existing company policies could give rise to future, costly
employment litigation. A company should not underestimate
the time needed to prepare for and conduct an effective due
diligence. Nor, should it set unreasonable deadlines for its
completion –– which is one of the primary reasons why a
company struggles with human resources issues after the
close of a deal. Businesses should recognize that the entire
due diligence process can take as little as a week to 10 days
to complete and as long as a month or more, depending upon
the complexity of the deal and the number of individuals
assigned to assist in the process.
9
In addition to the above-stated benefits of conducting a
thorough due diligence, the company performing the due
diligence gives itself the opportunity, early in the process, to
obtain the following crucial information about the business it
is seeking to purchase:
•
Identifying key personnel (both management
and non-management level) that will be
crucial to retain if the transaction is going to
be successful;
•
Identifying
between
potential
the
two
cultural
problems
companies
(i.e.
leadership/management styles, work ethic –
valuing teamwork v. individual performance,
implicit norms and values); and
•
Being able to conduct a comparison of the
benefits, compensation policies, and labor
contracts (if applicable) of the two companies.
10
By gaining access to this information early in the transaction,
those businesses will be able to proceed with greater speed
and efficiency during the crucial integration stage (the
process companies undergo after a sale is announced and preclosing activities have been completed). It is during this
stage of the purchase and sale process that businesses tend to
falter because they are unable to timely communicate with
employees (of both companies) regarding what changes lie
ahead for the business.
One should not underestimate the problems that can arise
where there are significant cultural differences between the
two companies. Many failed acquisitions and mergers trace
their demise to insurmountable cultural differences.
One
survey found that 56% of the respondents identified
incompatible corporate cultures as a major roadblock on the
route to a successful acquisition or merger, only surpassed by
the ability to sustain financial performance (64%) and lost
productivity (62%). Clearly, businesses cannot bridge the
11
gap between their corporate cultures in an acquisition and
merger scenario if they have not made an effort to learn
about the other company’s culture or identify the ways in
which their corporate cultures differ.
Thus, a company should seize the due diligence process as an
opportunity to learn what it can about the other company’s
culture. In this way, a planned acquisition or merger can be
modified or even abandoned if the information uncovered
reveals that the two corporate cultures are not well-suited to
one another.
III.
IMPORTANCE OF EFFECTIVE
COMMUNICATIONS
Oftentimes, only the dealmakers are privy to why a company
has decided to purchase another company. The failure to
adequately communicate this and other information of
interest to employees is problematic on several fronts. A
survey conducted by one of the Big Four accounting firms
several years ago, which looked at 124 mergers, found that
12
businesses that implemented effective communications
strategies showed better results in employee commitment and
productivity than those businesses that had a delayed
communications strategy. A survey from a leading global
consulting firm found that communications was among three
critical activities in a company’s integration plan –– the other
activities being retention of key talent and addressing cultural
differences. Thus, it is crucial that the human resources staff
be instructed to develop and implement a communications
strategy before the acquisition or merger announcement is
made by the company.
Human resources professionals on both sides of the
transaction need to be a part of the dialogue so they can
communicate with employees in a timely and effective
manner.
These individuals need to be able to convey
information regarding:
•
The nature of the transaction (e.g. acquisition
13
or merger);
•
The reason behind the sale or merger;
•
A rundown of the changes employees can
expect to see in the coming months, including
changes in the brand or format of the hotel, ;
•
Downsizing, conversion or redevelopment
plans, in particular, should be conveyed in
advance to comply with obligations to any
union and governmental authorities as well as
for good relations with individual employees ;
and
•
Any employee queries or concerns should be
taken seriously and properly responded to in a
timely fashion.
Employees who are kept in the dark, or left to rely on the
rumor mill, are more likely to respond in ways that are not
beneficial: low morale, reduced job productivity, increased
grievances and complaints, increased sick leave utilization,
14
and the departure of key employees. Studies indicate that
frontline employees and managers, alike, lose a minimum of
15% of personal effectiveness as a result of rumors,
misinformation and worrying about what the future will
bring. By keeping as many people “in the loop,” the selling
company is less likely to experience a downturn in its
business operations or an exodus of its most valued
employees.
IV.
EMPLOYEE RETENTION, DOWNSIZING,
WARN ACT AND EMPLOYEE BENEFIT
ISSUES
Any hotel transaction will generate some fear of job loss.
How the acquirer or its designated management company,
addresses employee retention, downsizing, and coordination
of employee benefits issues, will be crucial to its efforts to
retain valued employees and avoid unnecessary litigation.
A.
Retaining Key Employees
Well before an acquisition or merger deal closes, the
15
acquiring company should have a strategy in place for
retaining key employees. As noted earlier, through its
due diligence the acquiring company should have
identified which employees are key to the operation.
Studies reflect that successful acquisition and merger
transactions identify and target key employees for
retention either during the due diligence phase or
within the first 30 days after the acquisition
announcement has been made.
Incentives in the form of stock options or retention
bonuses should be offered to employees that are
viewed as essential to the success of the transaction.
Financial incentives should be tied to an employee’s
promise to remain with the company for a specific
period of time or until the completion of a project
such as a major overhaul or renovation of the hotel.
Non-financial incentives include the prospect of
internal advancement and the use of existing
16
professional networks.
B.
Employee Downsizing
Reduction-in-force (RIF) decisions are best made
shortly after the acquisition deal is signed to avoid
engendering an environment of uncertainty among the
employees of the selling company.
Initially, the
company should consider alternatives to involuntary
termination, such as offering early retirement
packages (ERPs) or voluntary separation programs
(VSPs). Such voluntary downsizing measures result
in better employee morale and engender good will
between the acquiring company and the remaining
employees. The downside to such programs is that it
is difficult to predict who and how many employees
will take the VSP or, in the case of ERPs, that too
many people may take advantage of the offer.
When voluntary measures fall short of the workforce
17
reductions
sought,
a
company
should
adopt
predetermined selection procedures for an involuntary
RIF that articulate what factors (e.g. seniority, past
performance) will be used in selecting which
employees will be let go. These selection procedures
should be utilized only after a determination has been
made with respect to which positions and job
functions need to be retained so that the hotel can
continue to function after it has been restructured.
Additionally, a statistical impact study must be
performed before any RIF decisions are finalized to
determine whether the process, as applied, has an
adverse impact on women, minorities, or other
protected employees.
C.
WARN Act Notice Requirements
The WARN Act, a federal statute, obligates
employers who have at least 100 employees to
18
provide at least 60 days advance written notice of a
layoff or facility closing where the employer’s actions
(layoff or facility closing) will result in the loss of
employment of at least 50 full-time employees over
the course of a 30- or 90-day period. The WARN Act
applies whether or not the employee is represented by
a union.
When the job losses are in conjunction with the sale
of an employer’s business, the law allocates the
responsibility for giving notice between the seller and
purchaser.
Thus, the seller is responsible for
providing notice only if the required layoffs take
place up to and including the effective date of the
sale. After the sale is completed, the purchaser is
responsible for providing notice for any eligible postsale layoffs. The purchaser and seller can allocate
WARN liabilities and agree on indemnification
provisions to ensure that all WARN issues have been
19
addressed.
Increasingly, states and municipalities have enacted
their own closing or layoff notification laws which, in
some instances, may be significantly more restrictive
than the WARN Act’s requirements. Currently, at
least 12 states, plus the District of Columbia, have
state or “mini” WARN statutes.
Thus, while the
federal WARN Act effects mostly larger hotel
properties with larger workforces, hotels in states
with these mini WARN statutes should be careful to
take them into account.
D.
Employee Benefits
The subject of employee benefits raises a host of
issues for a purchaser, none the least whether the
existing benefit package of the employees of the hotel
being acquired should remain unchanged. As with
employee retention decisions, a thorough review of
20
the benefits offered by the seller should occur as early
as possible in the acquisition process so that critical
decisions can be made with respect to what benefit
programs will be offered in the future.
Clearly,
employees will be anxious to know what will become
of their benefits. If the acquirer or ownership has
decided to hire a hotel management company to be
the employer and administrator of all employment
and benefits matters, the manager should be consulted
as soon as practicable.
If the hotel being acquired is subject to a union
collective bargaining agreement (CBA), that CBA
may impose certain financial obligations on the seller
with respect to employee benefits.
For example,
some CBA’s obligate the seller to make severance
payments to its employees, pay accrued vacation pay
or continue existing health and welfare benefits for a
specified period of time after the sale or closure of the
21
business. Additionally, the seller that is a subscriber
to a union pension plan will have to address any
underfunding and the issue of withdrawal liability.
V.
UNIONS ISSUES
A frequent issue is whether the acquiring (successor)
company must assume the seller’s labor contracts or
bargaining relationship. The extent to which a successor will
be bound by these existing labor obligations will depend on a
variety of factors, including:
•
Type of transaction involved;
•
Extent to which predecessor’s business has changed;
•
Whether a majority of predecessor’s workers are
retained by the purchaser; and,
•
What the labor contract’s “successor and assigns”
clause provides.
Generally speaking, when the purchasing company steps into
the shoes of the seller –– as in the case of a stock transfer ––
22
the purchaser will be bound by the terms of the labor
agreement.
Conversely, when a purchasing company has
acquired an ongoing business via an asset sale and is
regarded as a “successor” employer under the law, the
general rule is that the purchaser will not be bound by the
provisions of the predecessor employer’s labor agreement
unless it has expressly or implicitly agreed to be bound. A
purchaser in an asset sale will be treated as a “successor” if
two factors are present: 1) a majority of the purchaser’s
employees worked for the predecessor company; and 2) the
employees experience “substantial continuity” in their work.
A successor employer does have a duty to bargain with the
union but may set the initial terms and conditions of
employment before such bargaining commences, provided
that it informs employees (who previously worked for the
predecessor company) at the outset that the terms of their
employment going forward will be different. Buyer Beware:
questions pertaining to whether someone is a successor are
23
among some of the thorniest to resolve under federal labor
law.
To avoid any unexpected surprises, both seller and purchaser
should review any “successor and assigns” provisions which
may exist in the relevant labor contracts or side agreements
so they are familiar with their obligations. For example,
some clauses impose damages on the seller for failing to
secure the purchaser’s agreement to be bound by the labor
contract. Others may impose financial obligations on the
seller, as noted in the previous section on employee benefits.
Other seller obligations that should be investigated include:
•
Does the seller have outstanding or potential
grievances which may lead to a status quo injunction
blocking the transaction, unfair labor practice
charges, or other types of employment litigation?
•
Has or will the seller engage in any required decisionor effects-bargaining relative to the proposed
24
transaction?
•
Has the seller made statements to employees
concerning the proposed transaction, any hiatus, or
prospects of eventual reemployment?
•
What statements has the seller made concerning how
the labor agreements will be affected by any
transaction?
If a purchasing company is likely to meet the definition of a
successor company, should it engage in preliminary
discussions with the predecessor’s union before the deal is
struck? On the one hand, the purchasing company may best
be in a position to negotiate with the predecessor’s union
before the transaction itself is consummated, particularly if it
is an alternative to a closing or significant reduction in the
predecessor’s operations. On the other hand, preliminary
discussions with the union predictably will prompt an
immediate demand either for recognition or for a promise
that employment offers will be extended to the predecessor’s
25
workforce. Indications that the predecessor’s employees will
be retained (if unaccompanied by simultaneous statements
that employment conditions will be changed) may produce an
affirmative obligation to bargain before setting initial
contract terms. However, bargaining before a representative
employee complement has been retained by the new
enterprise could violate Section 8(a)(2) of the National Labor
Relations Act (NLRA or federal labor act).
Misunderstandings concerning the ongoing visibility of the
predecessor’s labor agreement also may give rise to status
quo injunction litigation and/or allegations that the
predecessor’s contract was voluntarily assumed or adopted
by the new enterprise. Unions will deal with the purchasing
company or designated management company based on those
entities track record in the industry and geographic region as
well as overall reputation in the area of labor, employment,
benefits, and human resources.
26
VI.
CONCLUSION
Paying attention to labor, employment, benefits, and human
resources issues early in the acquisition process can pay big
dividends post-closing for the new employer, whether it will
be the owner itself or its designated management company.
More often than not these issues can play a significant role in
the ultimate success of a newly acquired, developed or
converted hotel property.
27
VII.
SAMPLE DUE DILIGENCE CHECKLISTS
A.
Initial Due Diligence Checklist for Labor
and Employment Issues
1.
Copies of current Management
Agreement.
2.
Copy of current organizational chart.
3.
Summary of the current workforce,
including without limitation, total
number of union and non-union
employees, names, titles, job
descriptions, dated of employment,
salary or hourly wage rates.
4.
Copies of all collective bargaining
agreements, side agreements and
memoranda, or letters of
understanding with all unions.
5.
Copies of all individual employment
agreements, including arbitration,
retention, change in control,
incentives, bonus, commission,
restrictive covenant, non-competition,
non-solicitation, confidentiality,
severance, indemnification,
independent contractor and/or
28
consultant agreements.
6.
Copies of offer letters or representative
offer letter.
7.
Copies of all employee, supervisor or
human resource handbooks, manuals
and/or any other policies or practices,
written or unwritten, relating to the
employment relationship, including
without limitation all third-party
policies or practices.
8.
Copies of documents relating to
pending or threatened labor or
employment litigation or investigation
in any forum, including without
limitation, administrative agencies
such as the National Labor Relations
Board, Equal Employment
Opportunity Commission, U.S.
Department of Labor, the
Occupational Safety and Health
Administration, and any comparable
state or local agencies and/or industrial
commissions.
9.
Copies of settlement agreements with
former or current employees or unions
29
in the last five years.
10.
Copies of documents related to
pending or threatened grievances or
arbitrations (can be based on a
materiality threshold).
11.
Copies of documents related to
organizing or decertification activity
during the last five years.
12.
Copies of documents relating to
pending or threatened labor issues,
including strikes, lockouts, work slow
downs, job actions, work stoppages or
other material labor disputes during
the last five years.
B.
13.
Copies of EEO-1 Reports and any
Affirmative Action Plans for the last
five years.
14.
Copies of all government contracts for
the last five years.
Due Diligence Checklist for Employee
Benefits Issues
1.
Copies of each profit sharing plan,
money purchase pension plan, target
benefit plan, employee stock
30
ownership plan (ESOP), stock bonus
plan (collectively, “defined
contribution plans”), defined benefit
plan, or any other tax-qualified
employee benefit plan, whether or not
terminated, and any amendments to
date.
2.
Copies of each welfare benefit plan
(i.e. health, dental, vision, long-term
disability, short-term disability, life
insurance, accidental death and
dismemberment), child care, tuition
reimbursement, prepaid legal services,
severance plan, program or
arrangement, the underlying contracts,
if any, and any amendments to date.
3.
Copies of each top-hat plan,
supplemental benefit plan (often
known as a SERP), deferred
compensation plan, change-in-control
arrangement, executive compensation
agreement, bonus agreement, plan or
program, consulting arrangement,
non-compete arrangement and any
other non-qualified employee benefit
plan.
31
4.
Copies of each trust, group annuity
contract, investment management
agreement, voluntary employee benefit
association (VEBA or
“501(c)(9)Trust”), cafeteria plan
(“Section 125 Plan”), secular or rabbi
trust, multiple employer welfare
arrangement (MEWA) or any other
type of funding vehicle and any
amendments to date.
5.
Copies of each Internal Revenue
Service (IRS), Department of Labor
(DOL) or Pension Benefit Guaranty
Corporation (PBGC) determination
letter or ruling and any communication
regarding pending determination or
ruling request.
6.
Copies of each IRS Form 5500, 5500
C/R, PBGC Form-1, if applicable,
(including attachments) filed with the
IRS or PBGC for the last three taxable
years.
7.
Copies of each summary plan
description, summary of material
modification and summary annual
32
report.
8.
Copies of the most recent actuarial
report for each defined benefit pension
plan, the most recent financial
statements for all defined contribution
plans and a description of any
corporate or economic change since
the date of such reports which could
alter the figures presented in the
reports.
9.
List and describe all pending and
threatened litigation involving any
employee benefit or employee benefit
plan, plus all benefit-related claims
and appeals of any kind, internal or
external, which relate to any employee
benefit or employee benefit plan.
10.
List all controlled group members and
plans to which each member
contributes.
11.
Copies of the most recent collective
bargaining agreements and any
amendments thereto.
12.
Copies of any multiemployer pension
33
or welfare plan and trusts to which any
member of the controlled group
contributes. With respect to each such
multiemployer pension or welfare
plan:
a.
the amount of employer
contributions;
b.
the most recent determination
of unfunded liability, if any,
and the method of allocating
such liability;
c.
Forms 5500 for the last three
taxable years;
d.
actuarial valuations for the past
three taxable years;
e.
any withdrawal liability
estimates; and
f.
information as to any event
which could give rise to the
occurrence of withdrawal
liability or potential withdrawal
liability.
13.
List of employees on leave of absence,
34
short-term or long-term disability or
sabbatical and the benefits offered to
such persons.
14.
List of all individuals eligible for
COBRA, the duration of such
eligibility and the cost of the COBRA
coverage.
15.
List of any post-retirement benefits
provided to current or former
employees of the Company and any
member of the controlled group and
the present value of such benefits.
16.
List of contributions made to any
tax-qualified and non-qualified plan
for the last three years and any funding
waiver requests and approvals.
17.
List of premiums paid for each welfare
benefit plan.
18.
List of employees who participate in a
flexible spending arrangements and
the amounts currently available to each
such employee.
19.
Communications with the PBGC
35
concerning any reportable event or
communications with the IRS or the
PBGC regarding the termination of
any plan.
20.
Description of any acquisition or
disposition of qualifying employer
securities or qualifying employer real
property.
21.
Description of any prohibited
transaction, any party in interest
transaction or loan involving any
employee benefit plan.
22.
Any booklets not listed above which
describe the employment policies and
benefit plans of the Company.
23.
Any SEC registration statements and
Forms 11-K (check), if applicable.
24.
If any employee benefit plan offers
loans, documentation on any loans
outstanding.
25.
Copies of any handbook, employee
manual or other booklet which
describes any employee benefit.
36
OTHER HOTEL DEVELOPMENT AND ACQUISITION ISSUES:
LABOR, EMPLOYMENT & BENEFITS CONSIDERATIONS
Sang-yul Lee, Seyfarth Shaw LLP (Chicago, IL) i
Table of Contents
Page
I.
II.
III.
IV.
V.
VI.
VII.
INTRODUCTION ...............................................................................................................1
IMPORTANCE OF CONDUCTING DUE DILIGENCE ..................................................7
IMPORTANCE OF EFFECTIVE COMMUNICATIONS ...............................................12
EMPLOYEE RETENTION, DOWNSIZING, WARN ACT AND EMPLOYEE
BENEFIT ISSUES .............................................................................................................15
A.
Retaining Key Employees......................................................................................15
B.
Employee Downsizing ...........................................................................................17
C.
WARN Act Notice Requirements ..........................................................................15
D.
Employee Benefits .................................................................................................17
UNIONS ISSUES ..............................................................................................................19
CONCLUSION ..................................................................................................................24
SAMPLE DUE DILIGENCE CHECKLISTS ...................................................................25
A.
Initial Due Diligence Checklist for Labor and Employment Issues ......................25
B.
Due Diligence Checklist for Employee Benefits Issues ........................................27
The author is a partner in Seyfarth Shaw’s Labor & Employment national practice group as well
as a member of the firm’s Business Restructuring Transactional Employment (BRTE) Group
which advises clients on all aspects of mergers and acquisitions. Some portions of this section
have been adapted from the author’s materials for the National Employment Law Council
Annual Conference (2007) M&A panel, entitled “Remember the L&E with the M&A: Labor,
Employment and Benefits Implications in Corporate Transactions.”
i