Hi Everyone:

Simple question, but I'm having difficulty finding a case that indicates in stock sale no termination of employment occurs and purchaser treated as always having been employer. Anothjer atty. in office wants a case holding this. Any assistence is greatly appreciated. Thanks. Ed

I do not think that I understand the question, since I see no problem or cause for concern except regarding the attorney.

A stock sale has no bearing on termination of employment, it is simply a change in ownership of the stock. It might not even be a change in control if there is not sufficient stock being sold.

Amost any days news carries a story of an acquisition of 1 company by another. Not one terminates employment. What is different here?

The employer is the corporate entity not the individual stock holder. That is why there is an EIN (Employer Identification Number) that is different from the Social Security numbers of the stock holders. A corporate entity has an indefinite lifespan that does not terminate on the death of the stock holders. It also does not terminate on the change of the stock holders.

I bet that the bank account was not terminated nor any supplier or debtor accounts either. All that was done was to change the authorized signatures, and appoint a new Board and Officers, nothing else.

Something must be missing why this attorney makes a connection between a stock sale and termination of employer status or employment.

It is not for you to show a case holding this or any other "proof". It is the duty of the attorney to support his own viewpoint that this is different from what occurrs everyday.

Yeah, what he said.
I wonder if the question has been raised because the sold company has only one employee? That should not change the answer, but might be the source of confusion.

What I meant to say was that Company A maintained a defined benefit plan (that included early retirement subsidies). Controlled group A sold all the stock of Company A to controlled group B. The defined benefit pension plan was frozen on the date of the stock sale and retained by controlled group A. Controlled group B established a mirror plan for the employees affected by the stock sale.

A number of union employees are now claiming that they are entitled to receive early retirement benefits under the retained plan. That was not the intent of the parties. Employees are entitled to receive benefits under both the retained plan and the mirror plan once they terminate employment with Company A.

I know that thee are cases out there that indicate that a stock sale does not hold that employees incurred terminations of employment. However, I am having a difficult time finding a case on point. Thanks. Ed

If the DB Plan has not been transferred to B, then I do not know of any other choice but termination of the DB plan.

If the CBA does not allow a transfer to a successor employer, I see no option but a termination of the DB Plan.

What happens on termination should be in the PD.

I do not see nor understand why there is a "retained plan". There was a DB Plan at A and now a "mirror" Plan at B. If A "retains" the DB Plan, For whom is it being retained and Why? There are no participants and no future contributions, Why would the Plan Sponsor want to retain administration and reporting? Who are the participants in the "mirror" plan at Company B? Who are the employees of Company B? How come the plan participants are employed by both? How come union employees of Company A are participants in the "mirror" plan? Is there a CBA between the union and Company B?

I think that all these are valid questions that should be answered as part of any decision. Cases such as you are looking for will still be only applicable after these issues are addressed.

While there are numerous cases showing that a stock sale does not terminate employment, you stated that these union employees ( and I assume also the other employees) will terminate with A, anyhow. So while the termination has not yet taken place, and the DB Plan is already frozen, termination is imminent.

Whatever the intent of the seller of A might be, the situation might be governed mainly by the PD and the CBA.

Maybe, but there are probably missing facts. GBurns is correct that this seems like apples and oranges. In general, look to documents (plan and collective bargaining) for guidance.

However, the reference to "controlled group A" might imply something else. Was plan A sponsored by company A, or was company A merely one member of a controlled group participating in plan A? Is there a surviving plan sponsor (controlled group A or a member of that controlled group)?