Does an acquiring company have to abide by employment agreements of the company they purchased?

Get Legal Help Today

 Secured with SHA-256 Encryption

Does an acquiring company have to abide by employment agreements of the company they purchased?

I transferred jobs 5 months ago and as part of the negotiation process I was able to get 15 days of vacation per year. This was reflected in the final offer letter that was signed by me and the company representative. Since then my company has been acquired by another and they are telling me that as of next year I will only get 10 days of vacation. Is there anything I can do about this?

Asked on December 1, 2011 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The key issue is probably how was your company acquired? If the acquirer bought the actual business structure of your company--i.e. if you company was a corporation or LLC, they bought they actual corporation or LLC itself--then they would be bound by any agreements your old company had made. In that case, from what you write, you may be able to enforce the terms of the offer letter against them.

However, if it was an asset purchase--that is, the new company bought the assets (customer lists, equipment, inventory, good will, intellectual property) of your old company but did not buy the company itself, then they are only bound by those agreements they specifically assumed, or voluntarily agreed to take over/take on.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption