Does a new company have to honor an exsisting contract?

remery6 · #1 08-31-2007, 04:04 PM

What is the name of your state? Maine

I work for a large baked goods corporation. This company is currently in ch. 11 and I am concerned that our bakery may be sold to a company that won't want to deal with labor issues. What is the law pertaining to this type of transaction? Does the bakery have to remain closed for a certain period of time in order to void the union contract? If so, how long? Any information anyone can give will be greatly appreciated.

moburkes · #2 09-01-2007, 10:49 PM

Quote:

Originally Posted by remery6

What is the name of your state? Maine

I work for a large baked goods corporation. This company is currently in ch. 11 and I am concerned that our bakery may be sold to a company that won't want to deal with labor issues. What is the law pertaining to this type of transaction? Does the bakery have to remain closed for a certain period of time in order to void the union contract? If so, how long? Any information anyone can give will be greatly appreciated.

What do you mean by "deal with labor issues"? I don't know of ANY company that doesn't have to deal with labor issues.

remery6 · #3 09-02-2007, 05:53 AM

I mean that they wouldn't want to have union employees.

nextwife · #4 09-17-2007, 05:17 AM

Are they buying the business, or just assets such as buildings and equipment?

NoHarmNoFoul · #5 10-14-2007, 10:27 PM

As a union official, i'd check my local's contract to see if there are any coverage clauses that negates the enforcement of the contract for the entire coverage period. If the company remains closed through the expiration date of the contract, I believe only the contract is affected, not the local's presence. Also, if contract negotiations are not able to be conducted by the end of the negotiation period, there is usually a contract clause that covers this with wording something to the affect that the current contract remains in force.

I don't know of a specific law, rule, or regulation, but I suspect that if the company changes hands, during business negotiations between the old owner and potential new owner, the fact would be discussed that a bargaining unit and designated representative is well established at this company. Therefore it might be part of the purchase negotiations between the two parties.