Employment Law Toolkit for Cross-Border M&A Deals

Some years ago, a leading London corporate lawyer told The New York Times that in “merging two regular companies…you just do it and sort out the people issues  afterwards.” (A. Sorkin, “A Lawyer’s Lawyer: Bridging Borders,” March 26, 2000) If that was ever true, it no longer is. In any merger or acquisition between two employers, especially in the cross-border context, human resources and employment law compliance have grown particularly vital.

But actually, employment issues do not drive the merger and acquisition process. If we break down the mechanics of how M&A deals get structured, workforce issues are at best peripheral to the M&A process. Human resources leaders rarely get a “seat at the table” in planning acquisitions and divestitures. Employment and even employee benefits lawyers usually play at best a supporting role, and sometimes little to no role.

Yet employment, benefits and compensation issues in cross-border mergers and acquisitions can get complex. Businesses need expert guidance focused on cross-border staffing challenges. One law firm has noted that “although M&A projects tend to be driven by corporate or tax lawyers, in many cases labor law issues have significant influence on whether…the deal is successful.”

Our discussion here amounts to a toolkit for US human resources professionals and lawyers responsible for the workforce issues in cross-border M&A deals (transactions where the seller employs staff in more than one country). We focus on the multinational buyer and seller as they account for the seller’s outside-US staff who, at closing, will transfer over to the buyer. Our discussion breaks down into three topics: (1) staff transfers outside the United States (vested rights, acquired rights, de facto firings); (2) an international M&A employment due diligence checklist; and (3) a checklist of workplace issues in international mergers and acquisitions.

Download the PDF.

Don Dowling

Don concentrates his practice on outbound international employment law as part of the firm’s Global Employer Solutions team. He advises multinational headquarters on cross-border employment law compliance, for example: +Global codes of conduct, whistleblowers hotlines, employee handbooks, HR policies and workplace safety codes +International restructurings, reductions-in-force and “change projects” +International compensation and benefits offerings +Global HR information systems and data privacy law compliance +Employment law matters in cross-border mergers, acquisitions and outsourcings +Globally-aligning individual employment agreements, restrictive covenants and employee intellectual property assignments +International internal investigations and cross-border HR compliance audits +Employing staff in new foreign countries and engaging overseas independent contractors +Cross-border collective representation, overseas works council consultations and cross-border employee representative strategies +Expatriate structuring, expatriate dismissals and expatriate duty of care

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