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John
John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 2649
Experience:  Exclusively practice labor and employment law.
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My Michigan based Company has elected to divest a portion of

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My Michigan based Company has elected to divest a portion of it's business and I am a key manager in the offering. I have been with the Company 19 years. They have offered a contract that has a Re-Hire clause. It states in the event the ultimate buyer decides not to hire upon the closure of the sale, or terminates employment within six months after the sale of the business for any reason other than cause the Company agrees to re-hire me into a similar level position and the employment relationship would continue on an at will basis from that point. I understand Michigan is an at will employment state, but with my seniority, and never having a poor performance record I have some reservations with recent actions under new management at the company.
My concerns that I am seeking insight too:
1. Does the buying company have to offer carry over seniority with employment relative to a right to severance?
2. Does my company have any obligation for my seniority under the Re-Hire Clause if not stated specifically in the contract.
3. Why would my company write the contract with re-hire if the buyer does not elect to employ at closure of sale....... would I not still be an employee of my company with historical tenure? Why a re-hire statement I this area?
Submitted: 8 months ago.
Category: Employment Law
Expert:  John replied 8 months ago.
Hi, My name is XXXXX XXXXX X’m happy to assist you with your question today.

The concerns you have in this matter have to do with contract, or more specifically, what exactly are the specific terms of 1) the potential sale (which if I'm understanding you correctly you couldn't know because the division hasn't been sold yet) and 2) this re-hire agreement with your current employer. To answer specifically:


1. Does the buying company have to offer carry over seniority with employment relative to a right to severance? -- No, not unless it agrees to that specifically with you or your current employer as a term in the sale.


2. Does my company have any obligation for my seniority under the Re-Hire Clause if not stated specifically in the contract. -- No, not unless the re-hire agreement specifically states you will maintain seniority in the position. If it doesn't guarantee maintenance of your seniority, then seniority is lost.


3. Why would my company write the contract with re-hire if the buyer does not elect to employ at closure of sale....... would I not still be an employee of my company with historical tenure? Why a re-hire statement I this area? -- I can only speculate as to this. I suspect that they believe you will leave now if they don't offer you some security into the future. And your leaving perhaps would have a negative impact on the sale. Often times an acquiring company will need key personnel from the prior owner to transition operations. If you do end up stating with your current employer without a break in service, then your seniority is maintained.

My final thought to you is this, regardless of whether this new company picks you up or you end up staying at your current company, you will remain an employee at will. So at any time they can still terminate you. The only security you do have is that, if the new employer hires you, then terminates in six months, then current employer has to re-hire you...but it doesn't state how long they have to keep you on...so they could re-hire you, then terminate you in a month. My thought is that the re-hire agreement really offers you no security in the long run absent your faith that they will "do the right thing". Unfortunately, there is no legal requirement that this or any employer "do the right thing".

I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – simply reply to this answer. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, XXXXX XXXXX wish you all the best with this matter.

Customer: replied 8 months ago.

John,


Thank you for the quick reply.


A few areas for further clarification based on your response.


Historically the company offered severance of one week per year.


Is it your view that this is the key to the rehire clause in the contract with Seniority needing to be added. Otherwise seniority really means nothing.


Is the company obligated ? Why would I fight for seniority term if it offers nothing of value being an at will state?


 


Obviously the key negotiation is to attain the seniority statement within the re-hire clause if it is of value based on severance history or otherwise.


I can not tell from your At Will statement outside of potential wrongful termination concerns on the companies behalf, why they would offer severance on seniority if they don't have to? And why would they in this situation?

Expert:  John replied 8 months ago.
Hi,

Answering your follow- up questions as follows:

Is it your view that this is the key to the rehire clause in the contract with Seniority needing to be added. Otherwise seniority really means nothing. -- Seniority plus a promise to keep you employed for some definite amount of time and/or to only be able to terminate you "for cause", meaning they could only terminate you if you genuinely did something wrong.

Is the company obligated ? Why would I fight for seniority term if it offers nothing of value being an at will state? - See answer above - you'd need a contractual clause stating they can only terminate after some definite amount of time and/or "for cause". Otherwise, you are correct, the agreement really offers no additional security to you. Your keys in negotiation would be those three things - seniority, definite length of employment and/or "for cause" termination only.

 

I can not tell from your At Will statement outside of potential wrongful termination concerns on the companies behalf, why they would offer severance on seniority if they don't have to? And why would they in this situation? -- I think the only reason you've been offered anything here is that they want to sell, or they want you to sell, the division. You must have some worth to them in the transaction ,and they want you to stay on through the transition. That's the only thing I can think of.

 

Hope this helps. Let me know if you need further assistance. Thanks

John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 2649
Experience: Exclusively practice labor and employment law.
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