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Consider employment history when acquiring businesses

In an acquisition, business owners know that they must complete their due diligence. This allows them to protect their company and fulfill all the necessary legal steps.

One step of this process that business owners should not overlook is assessing the business’s past with its employees.

Have there been employment issues?

Business owners should ensure they obtain a holistic picture of the employment situation of the business they are acquiring. Therefore, they should:

  • Gather documentation of labor issues that business faced in the past;
  • Collect records of employment litigation the business faced;
  • Obtain evidence that the business complied with Connecticut employment laws; and
  • Review the business’s current employment agreements, policies or contracts.

Assessing these aspects is essential for a smooth acquisition. It helps both employees and business owners navigate the transition effectively and efficiently.

However, understanding the challenges that the business had with employees is a critical step. This can help owners acquiring that business to handle those challenges proactively.

Consider these past issues when planning for the future

Business owners should also make sure they address these concerns in the integration plan of the acquisition. For example, business owners should consider:

  • How to communicate changes to newly acquired employees;
  • How to prevent similar complaints or employment issues; and
  • How to integrate and adjust the employees’ current work culture.

Addressing these issues protects the acquisition and the business’s future.

There are many things that business owners must consider when they move forward with an acquisition. However, discussing employee concerns right away can help resolve issues before they happen.

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