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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 39026
Experience:  Retired (mostly)
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The California company I work for is being purchased by a competitor.

Resolved Question:

The California company I work for is being purchased by a competitor. The deal is an asset purchase resulting in the termination of all employees with certain employees receiving offers of employment from the purchasing company.

I have a three month severance (with out a non compete or mitigated cause if I find work elsewhere) in my “at will” employment agreement that is paid unless I am terminated for cause. The COO of our company informed me that the owners of our company are going to try and avoid paying my severance by saying that my agreement is being “transferred” because of my employment offer letter from the purchasing company, though there is no transfer clause in my contract.

Is that correct? Should I contact the labor board?
Submitted: 6 years ago.
Category: California Employment Law
Expert:  socrateaser replied 6 years ago.
If the employment contract is transferred, then you are not terminated, because the contract is assigned to the new employer, and that employer is therefore liable under the terms of the original contract.

If the employment contract is not transferred, then you are being involuntarily terminated/fired, by the old employer, without cause, therefore you are entitled to the severance agreed to under the contract.

Based upon your stated facts, I see no option under which either the old or new employer could avoid either retaining your services and the old contract, or paying the severance.

Re contacting the Labor Commissioner (Division of Labor Standards Enforcement), the DLSE does not generally enforce this sort of benefit on behalf of an employee, because of the complexity of the litigation. You can certainly file a wage claim, but more than likely you will have to hire a private employment rights attorney to sue (unless you want to sue for the $7,500 maximum small claims amount, and waive any additional rights under the contract).

Hope this helps.

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