CMS Expert Guide to employment issues in M&A transactions

Effectively addressing employment law issues is pivotal in ensuring the success of a transfer. While the intricacies and challenges of employment law vary based on the specific transaction, overlooking the pre-existing rights and commitments between the target company and its employees can lead to hefty employment claims, fines, and other financial burdens.

In our latest Turning the Corner? CMS European M&A Outlook 2024, it's evident that regulatory hurdles continue to pose significant challenges. A notable 41% of respondents identify labour and employment rules as one of the most daunting aspects of dealmaking. This mirrors the feedback from the previous year, suggesting a growing emphasis by authorities on safeguarding employee rights.

The employment lawyers must carry out due diligence to identify any potential problems with collective bargaining agreements, misclassification of employees (e.g. as freelance), pension schemes, employee benefits, accrued and as-yet unpaid time off, existing legal claims and potential legal claims. They can also help design layoff and retention strategies, ensure regulatory compliance, harmonise employment practices in the new combined entity and deal with cross-border clashes in employment culture.

This CMS Expert Guide to Employment Issues in M&A Transactions provides a comprehensive overview of the employment law requirements to be taken into account when dealing with an M&A transaction across a number of jurisdictions. This guide offers a valuable resource to help with the planning necessary to manage risk and avoid major problems during every stage of the integration process. For more in-depth guidance, we encourage you to reach out to your dedicated CMS employment law specialists within your region. They stand ready to provide prompt and effective assistance tailored to your business needs. Alternatively, you can drop us an email at employment@cmslegal.com for support.