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CHAUDHRI: Employees must be warned when company is sold


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Buying and selling a business is often shrouded in secrecy and quiet negotiation.

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

A workforce is often the most valuable selling asset of any organization. Employees are the soul of a company. They are the sole custodian of the goodwill, of the customer relationship; trade secrets.

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

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

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

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

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Normally, employees have no ability to influence a potential change in control, nor do they have much power to determine how their own personal roles may be affected. Twitter employees have a rare opportunity to raise concerns about a potential takeover and discuss options.

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

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The employees, for once, are aware. 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 unfolds.

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

There are some key considerations an employee should keep in mind when changing ownership or control.

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Sale of assets or shares: If your employer sells its assets, you could be considered terminated by your previous employer and may be entitled to severance pay if you do not accept a new position with the next employer. If it is a stock purchase, your employment will continue with the new owner. If you are unsure, you can ask your employer if the change is an asset or stock sale to better understand how your job might change.

New job offer: When the owner changes, you may be offered a new job offer. This could include a change in role, reporting line, salary, benefits and may include new terms like a termination clause or non-solicitation provision. If your new job offer doesn’t closely match your previous position or previous terms of employment, you may want to think carefully before committing.

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

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

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On to this week’s questions:

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Q. I returned to work and noticed that there are no PPE protocols. I find no one wears a mask and doesn’t care much about social distancing. I wear my mask but feel uncomfortable wearing it when no one else is. What should I do?

A. You should not face retaliation for wearing PPE at work. It’s relatively common anyway. Wear the mask. Or, ask to zoom in for meetings where social distancing isn’t easy.

Q. I received a job offer for in-person work. I want to accept the position but I am not interested in the salary offered. Is there a point in negotiating or should I accept the offer as is or move on?

A. Job offers can be negotiated. In some cases they should be. Many employees don’t negotiate job offers, but it can be helpful to have them reviewed. For example, in addition to salary, things like bonuses, layoffs, and post-employment obligations may be worth negotiating before you join.

Do you have a problem at work? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

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