Buying business and rehiring staff? Beware excluding employees who have filed lawsuits
When you buy a business, the employees generally don’t automatically transfer. Typically, the new owner decides which employees to keep on the payroll. Before you exclude any existing employees from consideration, make sure that rejecting them won’t look like a failure to hire because they have previously filed discrimination litigation.
Recent case: Crochen, a security guard who was over age 60, was injured and took FMLA leave. He wasn’t immediately reinstated when he needed a few additional days before being cleared to work. He hired a lawyer who brought to the company’s attention its obligation to reasonably accommodate workers who have exhausted FMLA leave. Crochen was reinstated.
The company then changed hands and every employee except Crochen was hired anew. Crochen sued, alleging disability discrimination.
He eventually lost the case because he had not checked the box on the complaint form that said “failure to hire” as his claim. (Rivers v. Columbia Sussex, et al., No. 12-1087, ED CA, 2013)
Final note: This could have turned out badly for the new owner. The best approach is to conduct interviews, review qualifications and concentrate on whether the employee is a good match for the company. Always compare qualifications and select the best qualified. Most of the time, if the employee was performing his job satisfactorily, you should rehire the worker unless you are bringing in your own people and revamping the business.