Maintaining labor-management dialogue during M&A transactions – Capital Finance magazine, November 9, 2020
Labor-management relations are often treated as an afterthought in M&A deals. And yet, over and above the legally mandated information and consultation procedure, exchanges with the labor-management committee can lay the groundwork for constructive social dialogue.
“The time frame for the labor-management committee’s review is now limited to one to three months, depending on the complexity of the deal,” Franklin partner Myriam de Gaudusson explained. “Because they no longer have any flexibility to extend this time frame, labor-management committees do not hesitate to apply for interlocutory injunctions, arguing a lack of sufficient information. It’s another way for them to exercise their power.”
“Therefore, one of the first steps is to carefully prepare the information documents to be submitted to both the target’s and the seller’s labor-management committee: “The purpose is to lay out the transaction, its goals, its estimated timeline, and, of course, its impact on employment,” Myriam de Gaudusson explained. “It is crucial to use the conditional to make it clear that nothing has been settled yet, so that meaningful labor-management exchanges can take place.”