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How employees are affected during mergers

For employees in Texas, the knowledge that their company is undergoing a merger can be a very uncertain time. They may wonder whether they are going to be allowed to remain in their job, and if not, they might want to know what kind of compensation they can expect to receive. While mergers and acquisitions are underway, it is still important to pay attention to employee morale.

Because acquisitions focus on making things more efficient, it is usually inevitable that some employees will lose their jobs. Those employees should at minimum receive a compensation package that can carry them through a period of unemployment, but it is best for companies to try to be generous. Which employees will stay depends on both the industry and the situation, but in retail, store employees are generally permitted to keep their jobs since the stores will still need on-the-ground employees.

One error that companies often make during a merger is assuring employees that nothing is going to change. Employees know that this is not true. Instead, companies should focus on demonstrating how the changes are for the better. For example, in retail, there could be more opportunities for promotion into management positions. It is critical that companies clearly communicate this information to their employees.

Companies that are going through any kind of merger, business dissolution or other litigation might want to work with an attorney throughout the process. This may help ensure that all regulations are followed, that necessary paperwork is completed and that any obligations to shareholders, partners or employees are carried out. An attorney may be able to advise regarding the agreements that employees sign when they accept compensation packages following a merger. Ideally, with careful planning at this stage, companies will be able to avoid situations that might lead to litigation.

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