USA LAW AND PRACTICE Contributed by: George Casey, Heiko Schiwek, Elena Rubinov, Pierre-Emmanuel Perais, Clara Pang and Gregory Gewirtz, Linklaters LLP
• they can let the applicable waiting period expire, which allows the parties to close their transaction within a year; • they can require parties to enter into con- sent agreements as a condition to clear- ance, including remedies requiring divestiture of businesses (eg, permanent, irrevocable licences) or behavioural commitments to undertake certain actions; or • they can seek to block the deal in a US fed- eral court. The agencies also have the ability to review busi- ness transactions that are not subject to notifi- cation under the HSR Act, as well as business combinations that have already been consum- mated. Recent Developments in US Merger Control In 2022 the DOJ and FTC updated their joint Merger Guidelines to better address complexi- ties in today’s markets, including the increas- ing importance of digital markets. Through the updated Merger Guidelines, the agencies seek to correct their perception of historical underen- forcement in merger control in the tech sector. The result is an expansion of potential theories of harm and a shift of the burden to merging parties. These factors could result in more extended reviews for certain technology merg- ers and increased interest from the agencies to a broader set of technology deals that have not traditionally been subject to scrutiny. On 10 October 2024, the FTC announced final changes to the HSR filing form applicable to reportable transactions. These changes signifi- cantly increase the burden of disclosure require- ments on filing parties, including more expansive document productions, narratives on market dynamics and information on the board mem-
bership of the acquiring person’s officers and directors. 7.6 Labour Law Regulations Employee benefit- and executive compensation- related issues can have a significant impact on M&A transactions. Federal, state and local laws can be implicated with respect to these matters. Employment and Labour In the USA, employment agreements are typi- cally “at will”. Buyers must carefully evaluate worker classification and ensure the proper visa status of employees. Additionally, they should be mindful of the Worker Adjustment and Retraining Notification (WARN) Act and similar state stat- utes, which may entitle employees to advance notice of potential layoffs or plant closures, or which may provide them with salary in place of notice. Parties need to assess whether key employees have a right to resign with full severance on a change in control and whether such employ- ees are subject to post-employment restrictive covenants. The enforceability of such agree- ments is determined on a state-by-state basis. The Code may affect decisions on post-closing employment arrangements, including employ- ment agreements, retention plans or other simi- lar agreements. Equity Plans and Award Agreements Buyers need to review employee equity plans and the impact of a change of control on out- standing employee equity. Numerous considera- tions such as legal compliance issues, legal and business limitations, and dilution of the acqui- ror’s shareholders go into determining treatment of equity awards in a deal.
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