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What Happens to an employee's tenure after an acquisition?? New Mexico

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  • What Happens to an employee's tenure after an acquisition?? New Mexico

    I'm currently waiting the completion of an acquisition, set to be finalized in 6-8 months. The acquiring company has provided us with information about a retention bonus and severance package. The retention bonus is set to be paid half at close and half a few month later. The severance package comes with the stipulation that we cannot file for unemployment. Knowing this information and if we are provided a choose, I'm trying to decide what the best option is financially.

    This brings me to my questions. After an acquisition, what happens to the tenure of the employees of the purchased company?? If the acquiring company lays off the employees after 91 days from the date of acquisition, is the severance option still available?? And is it at the tenure from the original employer or is that reset??

  • #2
    You are asking questions that do not have external governmentally imposed answers. Generally speaking, employers do not have to offer severance pay, and that conditions associated with severance are mostly whatever the employer says that they are. Also, I am skeptical that a contract that requires the employee to waive future UI claims is legally enforcable. Your employer does not run the UI system, the State of New Mexico does and they are not a party to this contract.

    You really need to have a local attorney go over the agreement, since you are talking contract law here, not labor law. Maybe make sure that there are no WARN act considerations. But the issues you raise are generally speaking not covered in the law.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      The severance package comes with the stipulation that we cannot file for unemployment. A completely invalid statement in the severance agreement. Unemployment benefits are provided by the State (even though funded by a payroll tax employers pay.) Your employer cannot bar you from filing a UC claim and collecting benefits if the State decides you are eligible. It is ridiculous that they included that statement. You very likely cannot collect UC while you are receiving severance but you certainly can after severance stops if you are not yet employed.

      After an acquisition, what happens to the tenure of the employees of the purchased company?? If the acquiring company lays off the employees after 91 days from the date of acquisition, is the severance option still available?? And is it at the tenure from the original employer or is that reset?? .

      That depends entirely on what the acquiring company decides to do. I've seen employers terminate everybody, do an immediate rehire with new dates of employment but give "credit" for years of service with the prior entity when it comes to benefits. I've also seen acquisitions where absolutely nothing changed in terms of benefits, hire dates, etc. Only the acquiring company can tell you how this is going to work for the employees who remain employed.

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