ACG Cleveland Special Editorial 2022: Employee benefits due diligence should be at top of M&A checklist

Regardless of the structure of the transaction, when it comes to employment-related liabilities, the buyer must conduct meaningful diligence. Potential liabilities can be handled through various mechanisms, whether by establishing a substantial escrow for liabilities, negotiating protection through a strong indemnification or other mechanisms. No matter how the buyer seeks to limit its potential liability, however, the days of ignoring employee benefits and other employment-related issues in the diligence process are history. These issues matter in terms of legal liability, deal valuation (and evaluation) and post-acquisition integration of operations/policies/assets.