Even the most successful business may eventually have issues continuing to grow. Whether there simply aren’t enough professionals nearby to hire for an expansion of your current operations or you want to move into a different area of the industry and require staff and facilities quite different from your own, a merger may become the fastest and most cost-effective means of continued development.
Mergers involved two companies combining their operations, and often this process results in redundancies. You usually won’t need two completely separate human resources departments, for example. If your company is not careful in the early stages of the merger, you might eventually face very costly employment law claims.
Mergers necessitate diversity audits
Inevitably, companies have to let a few workers go when they combine two sets of staff. It is common for at least a few of the workers who will lose their jobs to be very unhappy with the situation. Occasionally, companies that fail to carefully consider staff reduction decisions might leave themselves in a position where former workers could easily bring a discrimination lawsuit.
Whether due to coincidence or unacknowledged internal biases, managers and human resources professionals at your company may target one group for termination more than others. A diversity audit involves thoroughly reviewing the list of employees who could lose their jobs to determine if any group with protected characteristics has disproportionate representation.
If the majority of the workers you intend to let go are over the age of 40 or if most of your workers from a specific religion or racial group are on the list of those about to lose their jobs, those workers might identify the pattern and pursue a wrongful termination or discrimination lawsuit.
Thorough documentation helps defend your decisions
Performing a diversity audit can help your company spot problematic patterns before announcing any decisions that could lead to civil litigation. Additionally, businesses preparing for a merger can protect themselves by maintaining clear records of the employment reports and other criteria they use to evaluate workers and make decisions about who they keep and who they terminate.
Recognizing that a merger comes with certain legal risks and taking the necessary steps to minimize such possibilities can help protect businesses from expensive employment law litigation.