Sang-yul Lee, Jeffrey Kauffman and Joshua Ditelberg Published in Financier Worldwide

In a special section, "Post-Deal Integration Review," in the year end 2006 issue of Financier Worldwide, Sang-yul, Jeffrey and Joshua highlight "Top labour and employment issues not to overlook in an M&A deal." Their article notes that "unlike their European counterparts, US businesses involved in mergers and acquisitions experience few restrictions relating to human capital matters. Generally speaking, acquiring companies have no obligation to retain the seller's employees, particularly when the employees are not represented by a union or covered by an employment agreement. That said, though, the failure of an acquiring company to adequately address human capital issues may play a pivotal role in whether the merger or acquisition is successful." Among the points to address are: effective due diligence of HR operations and history; effective communications to all employees on any deals to prevent downturn of business or exodus of key employees; understanding different corporate cultures; plan ahead for retention and reduction in force (RIF) issues; be aware of employee notification requirements mandated by the Worker Adjustment and Retraining Notification Act (WARN); be aware of union "successor and assigns" issues in change of ownership transactions and what will change or remain regarding benefit issues. "Paying attention to human resources issues early in the M&A process can pay big dividends post-closing. More often than not these issues play a significant role in the ultimate success of an M&A deal.