Mergers are complicated business transactions. They often require months of negotiation and extensive plans to integrate the two businesses successfully. Mergers expose both organizations to a degree of risk, as the costs and instability generated by a merger can compromise a company’s operations.
Additionally, the organization could be vulnerable to litigation brought by current or former employees. Wrongful termination lawsuits can potentially create significant complications for organizations trying to combine two workforces.
Careful preparation and appropriate company documentation can be important when preparing for staffing reductions as part of a merger.
Terminated workers may fight back
Mergers often create numerous professional redundancies. In plain English, there may be two or more people performing the same functions for the company. Once the organizations fully combine, two separate payroll teams likely aren’t necessary.
Therefore, the leaders of the combined organization must make decisions about who retains their job and who gets laid off. Any widespread reduction in a company’s workforce requires careful consideration to prevent future claims of discrimination or retaliation.
Business leaders generally need to ensure that they use appropriate and objective criteria for who keeps their job after a merger. Workers may sometimes claim that their terminations were retaliatory if they previously engaged in protected activities, such as attempting to unionize. If the pool of workers terminated seems to disproportionately affect one group, that could lead to claims of discrimination.
Conducting a thorough review of any layoff decisions to look for trends can help reduce the risk of employee litigation. Companies preparing for a merger often need assistance identifying and avoiding common pitfalls.