If my employer was acquired by another company, does my car and healthcare allowance agreement still hold?

UPDATED: Oct 1, 2022

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If my employer was acquired by another company, does my car and healthcare allowance agreement still hold?

I have been receiving 600 per month plus 19 cents per mile for use of my
personal car for business. I was also receiving 600 per month healthcare
allowance in lieu of company provided healthcare. This 600 covered my
healthcare in full without any out of pocket monthly expense. We were
recently acquired by a large corporation that says that will not honor these
but will instead issue a mileage reimbursement program with no allowance.
The also provide company healthcare but the cost is very high. I am going to
be taking a 14,400 hit in yearly benefits as well as having to pay for
healthcare out of pocket. Is the new company obligated to honor the
original employment agreement?

Asked on March 18, 2018 under Employment Labor Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

1) First, unless you had a written employment agreement for a defined or set period of time (such as a 1-year, 2-year, 5-year, etc. agreement) which was still in effect (i.e. had not yet expired) and which guaranted you these things, the employer (old or new) could change them or take them away at will. Only a still-in-effect written employment contract for a defined period of time prevents an employer from changing pay, perks, benefits, etc. at will. (Remember: except to the degree changed by a written contract, all employment is "employment at will" and is defined by the employer.) Oral agreements or past practice do not bind an employer.
2) Second, even if you had a contract as described above, who it was with and how your employer was acquired are critical:
a) You had worked for a DBA or sole proprietorship (i.e. the business was not a corporation or LLC) and so your contract was directly with the former owner. In that case, the new employer is not bound by your contract with the former owner, since they are not a party or signatory to it.
b) You had worked for an LLC or corporation, but the new owner did not buy or acquire the actual LLC or corporation, but only acquired its asserts (such as name, intellectual property, accounts receivable, inventory, "good will," etc.). In that case, your contract is with a "person" (the LLC or corporation) which you are no longer working for and which likely has been shut down or dissolved; it does not bind the company for whom you are now working, since they are not  a party to it.
c) Only if you had worked for a LLC or corporation, had a written contract for a definite term which has not expired and which guaranteed you those things, and the new owner bought the actual LLC or corporation and you are still working for that LLC or corporation would you have enforceable rights. That is because in this case, you are still working for the same entity which signed the contract and which is bound by it; the fact that the entity has a new owner does not change the entity's obligations or your rights under a written contract.

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.

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