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When a company announces a merger or acquisition, employees are often the last to know—and the first to worry. Suddenly, the job you’ve counted on feels uncertain. Will your position still exist? Will your manager change? What happens to your benefits, your seniority, and your security?
The truth is that corporate restructuring doesn’t just affect balance sheets. It affects people—their livelihoods, routines, and peace of mind. Whether it’s whispered rumors or a formal press release, the impact hits fast. And while employers focus on legal and financial due diligence, workers are left wondering what rights, if any, they can rely on.
What Happens to Employees During a Merger or Acquisition?
Mergers and acquisitions (M&A) happen in different ways, but they share one thing in common: change. In a merger, two companies join forces and become a single entity. In an acquisition, one company purchases another and typically becomes the controlling party.
When these deals are announced, employees may find themselves in unfamiliar territory. Some are retained with little change. Others are laid off, reassigned, or offered entirely new terms of employment. The outcome often depends on how the deal is structured:
- In a stock purchase, the acquiring company typically assumes existing contracts and liabilities, which can offer more job continuity.
In an asset purchase, the acquiring company may selectively take on employees, leaving others without a job unless a new agreement is made.
Unionized workers may have additional protections through a collective bargaining agreement (CBA), but even then, transitions can be complicated.
Do Employees Keep Their Jobs After a Merger?
There’s no automatic guarantee that employees will be retained after a merger or acquisition. While some deals include provisions to keep key staff, many don’t—especially if roles are considered redundant.
Job security often depends on:
- The type of transaction (stock sale vs. asset sale)
- The terms negotiated between companies
- Whether your role overlaps with existing staff at the acquiring company
That said, larger companies must follow specific notification rules under the Worker Adjustment and Retraining Notification (WARN) Act. If mass layoffs are planned, the employer must provide 60 days’ notice to affected workers.
New York State has its version of WARN, which kicks in at a lower threshold—covering companies with 50 or more employees. Some local laws in NYC also apply in specific industries, like building services and fast food, where workers may be entitled to job retention during ownership changes.
What Happens to Your Pay, Benefits, and Seniority?
Even if you keep your job, the terms of employment may change.
The acquiring company may adjust the following:
- Wages or bonus structures
- Paid time off policies
- Health insurance plans
- Retirement or 401(k) benefits
- Seniority or promotion eligibility
Under New York City’s Paid Safe and Sick Leave Law, your sick leave rights continue regardless of who owns the business. However, vacation accruals and seniority may be reset unless explicitly preserved in the new employment arrangement.
Employers are prohibited from cutting wages retroactively or failing to pay earned compensation. If you’re losing benefits or seeing a pay reduction, you have the right to ask for written details—and to question whether those changes are lawful.
Legal Protections for NYC Employees During M&A Activity
Even during a merger, your core legal rights don’t disappear. New York City and State laws, as well as federal protections, still apply.
Key rights include:
- Protection from discrimination: Employers cannot use a merger as an excuse to disproportionately lay off older workers, employees with disabilities, or those from other protected groups.
- Protection from retaliation: Asking questions about your job status or asserting your legal rights cannot be grounds for discipline or termination.
- Severance and final pay: If you’re let go, you may be entitled to severance, payment for unused vacation, and access to continued health coverage through COBRA.
- Advance notice: As mentioned earlier, the WARN Act (and NY’s version) requires advance written notice for certain large-scale layoffs.
If your employer violates these laws, you may be eligible for back pay, penalties, and other legal remedies.
When to Contact an Employment Attorney
If your workplace is going through a merger or acquisition, it’s wise to pay close attention to any changes in your role, pay, or benefits. You should speak with an attorney if:
- You’re laid off without notice
- You’re offered a new position with significantly worse terms
- You’re pressured to sign a separation or severance agreement you don’t fully understand
- You suspect discrimination in how layoffs or transitions are being handled
- You’re not receiving final pay, earned time off, or benefit information
An NYC attorney at Lipsky Lowe can help you review any agreements, assess potential legal violations, and advocate for a better outcome—whether through negotiation or formal action.
Facing changes after a merger or acquisition? Contact us today for a free consultation.