Understanding HRs Role In Mergers and Acquisitions - Workology

Understanding HRs Role In Mergers and Acquisitions Human Resources Involvement in Mergers and Acquisitions Human Resources Involvement in Mergers and Acquisitions Over the course of my career, Ive been involved in several merger and acquisition activities.     If you have ever been involved in one, you know Im not exaggerating when I say that dealing with an MA is one of the most complicated projects you will ever undertake.     Whether you are a business ownner, or an HR profesiional assigned to a project team, the work you do in conducting due diligence for your employer can potentially make or break a valuable deal. The Role of Employee and Labor Relations in MA Believe it or not, one area that is frequently not given the attention it deserves in MA is  labor relations.     Im not sure why this is, but Ive seen it happen over and over, especially where a collective bargaining agreement already exists.   It seesm as if people just assume that all that union stuff is settled by an existing collective bargaining agreement.     Such thinking couldnt be further from the truth.   The existence of a labor agreement or the fact that a labor union is involved in organizing at a business you are looking at should send up red flags right away.   Here are some reasons why you should be concerned about doing proper due diligence on labor relations issues. Hidden Costs Collective Bargaining Agreements An existing  collective bargaining  agreement formally defines the current wages, benefits and terms of conditions for any potential new employer.   These can be modified by an acquiring company but only by entering into and conducting good faith bargaining.     This can complicate the administrative integration of your acquisition in many ways, including the need to maintain separate wage and benefit plans for an extended epriod of time.   There are also many   hidden costs and continuing long term obligations that are easily overlooked, such as the requirement for future contract negotiations and joint multi-employer pension plan withdrawal liability issues.   Even things like the hiring of new or exisiting staff can become complex and costly if not done correctly.   The NLRB just ordered a California business to add fifty staff members and begin bargaining with a union, in what appears to be a case of lax due diligence by the new owner. MA Business Resources Here are a couple of useful resources for HR professionals who may be involved in upcoming merger and acquisition activity. A labor lawyer’s guide to avoiding the surprise withdrawal liability assessment Merger Acquisition checklist from SHRM MA checklist for small business