Legal Question in Business Law in Maryland

Do companies have to honor employment contracts when they buy another company? By honor I mean pay the previously contract pay rate? Schedule the contracted hours? Provide the contracted benefits? Or is the new company able to change everything to their rules without regard for the contract that was in place when they purchased the new company?

In this case I am speaking of a security service company that purchases another security service company.


Asked on 3/22/12, 8:18 am

1 Answer from Attorneys

Cedulie Laumann Arden Law Firm, LLC

The answer to your question depends on how the purchase was structured. An attorney cannot fully answer without knowing more details and the type of transaction. If the new company simply buys assets from the old company then in most cases employment contracts do not transfer and must be re-negotiated. However, the acquiring company does still carry over some of the old company's history when it comes to unemployment accounts, etc.

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Answered on 3/22/12, 2:58 pm


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