Employees must be savvy during company sale

Sunira Chaudhri

Sunira Chaudhri

Toronto Employment Lawyer

A workforce is often the most valuable asset in the sale of any organization. Employees are the soul of a company. They are the sole repository of goodwill, of client relationships; of trade secrets.

The buying and selling of a company is often cloaked in secrecy and hushed back room negotiations.

 

That, of course, is by design. Employees are usually the last to know.

 

A workforce is often the most valuable asset in the sale of any organization. Employees are the soul of a company. They are the sole repository of goodwill, of client relationships; of trade secrets.

 

Most organizations inform employees of a sale or change of control with little notice accompanied with quick deadlines to accept new roles. The experience can be overwhelming and riddled with discontent.

 

In a remarkable shift from the norm, Twitter employees have a front row seat to a very public takeover bid for the social media platform by Elon Musk.

 

On April 14 Musk tweeted, “I made an offer,” linking a proposal filed with the SEC to purchase all outstanding common stock of Twitter at $54.20 a share for 100% ownership.

 

According to the Washington Post, some Twitter employees have raised concerns about the potential sale triggering an “all hands” meeting on Thursday, led by CEO Parag Agarwal. Concerns included how the culture at Twitter would change if Musk took over, concerns over his social media use as well as a request for employee representation on Twitter’s board.

 

Normally, employees have no opportunity whatsoever to weigh in on a potential change of control, nor do they have much agency to determine how their own personal roles may be impacted. Twitter employees have a rare opportunity to register concerns on a potential takeover and discuss options.

 

While many wonder why Elon Musk has made his bid public, the transparency of his offer is refreshing and revolutionary.

 

Employees, for once, are in the know. They have time to make decisions about their own careers and engage leadership. They can demand accountability. They have the opportunity to consider other options while this plays out.

 

When it comes to a sale or change in management, employees can experience a lot of uncertainty. For example, employees may be offered a new job with a new employment agreement to sign in order to accept the new terms.

 

There are some key considerations an employee should keep in mind during a change in ownership or control.

 

Asset or share sale: If your employer is selling its assets, you could be deemed to be terminated from your previous employer and could be entitled to termination pay if you don’t accept a new role with the next employer. If it is a share purchase, your employment would continue with the new owner. If you’re not sure, you can ask your employer if the change is an asset or share sale to get a better handle on how your employment may change.

 

New employment offer: When there is a change in ownership, you could be given a new employment offer. This could include a change in role, reporting line, pay, benefits and may include new terms like a termination clause or non solicitation provision. If your new employment offer doesn’t closely match your previous position or previous employment terms, you may want to think carefully before signing on.

 

Recognizing years of employment: If you are given a new role, you should always ask whether or not your previous years of service at your old company will be recognized. Years of service weigh in to things like your seniority, vacation, pension and your rights on termination.

 

Mitigating your losses: It can be awkward and uncomfortable to sign on with a new employer, especially if you have worked for your previous organization for a long time. That said, if your new role is reasonably comparable to your previous role, you will legally be expected to accept it to mitigate the loss of your old role. If you aren’t sure about whether or not the new role is fair and comparable, get some legal advice.

 

Q. I have returned to work and notice that there is not any PPE protocols. I find that no one is wearing a mask, nor do they care much about social distancing. I am wearing my mask but feel uncomfortable wearing it when no one else is. What should I do?

 

A. You shouldn’t be retaliated against if you wear PPE at work. It is relatively commonplace in any event. Wear the mask. Or, ask to zoom in for meetings where it is not easy to socially distance.

 

Q. I have received a job offer for in-person work. I want to accept the role but am not keen on the salary offered. Is there any point in negotiating, or do I have to accept the offer as is or move on?

 

A. Job offers can be negotiated. In some instances they should be. Many employees do not negotiate job offers, but having them reviewed can be helpful. For example, in addition to salary things like bonus, termination and post employment obligations may be worth negotiating before you join.

 

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

 

The content of this article is general information only and is not legal advice.

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