Employment Law Considerations When Buying a Business

If you are considering buying a business in Texas, you need to consider several key employment law issues that could ultimately impact your ability to run the business. Buying a business is complex, and you should work with a lawyer throughout the process on various legal issues concerning the purchase agreement, due diligence, and other matters. You should also work with an experienced Texas employment law attorney who can determine whether there are any employment law considerations that you will need to contend with in the process of acquiring the business and running it according to your plans. The following are some of those critical employment law considerations when buying a business in Texas.

Do You Need to Comply with the WARN Act?

If you are acquiring a business similar to a company you currently own and merging their operations, there may be redundant employees.  If you will terminate existing employees in a mass layoff, you may be required to comply with the federal Worker Adjustment and Retraining Notification (WARN) Act. Under the WARN Act, most employers that have 100 or more employees must provide at least 60 calendar days of notice before a mass layoff.

Are There Pending Legal Issues Involving Employment Discrimination?

Is the business you are acquiring facing discrimination claims from previous or current employees? You could be responsible for these claims when you buy the business, and you should seek advice from a lawyer about how to handle any pending discrimination cases.

Do Any Restrictive Covenants Apply If You Plan to Retain Employees?

If you are retaining employees, you will want to know if there are any restrictive covenants in place (and, accordingly, whether you will want to consider any restrictive covenants if they do not exist). Restrictive covenants include, for example, non-compete agreements, and non-disclosure agreements.

Are There Employees Who Will Be Returning from Lawful Leaves?

When you purchase a business and plan to retain employees, you will need to determine whether there are employees on lawful leaves (such as FMLA leave) who will be returning after you have acquired the company.

Are There Issues Concerning the Classification of Workers?

The classification of workers is a subject that brings up two different kinds of classifications that you will need to consider: the classification of employees versus independent contractors, and the classification of exempt and non-exempt employees for purposes of wage and hour law requirements. If you plan to retain employees, you will need to determine how they have been classified, and you will need to ensure that those classifications are appropriate according to state and federal law.

Are There Existing Employment Contracts or Agreements?

If you will retain employees, you must consider existing employment contracts and employee policies currently in place.  For example, will you be bound by existing vacation policies, or hybrid/remote work policies? Consider these questions and research them to find the answers.

Contact a Frisco Employment Law Attorney 

Before purchasing a business, seek the advice of an attorney to ensure you understand the employment law issues, risks, and liabilities that may come along with it.  One of the experienced Frisco employment law attorneys at our firm can help. Contact Simon Paschal PLLC today for more information about how we can assist you.

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