Due Diligence During M&A 

Due diligence is the most significant activity in a typical M&A transaction. It is essential for a buying company to properly research and anticipate any issues that may arise once the acquisition of the targeted company is consummated.

My job as an immigration attorney is to assist companies in identifying immigration issues affecting their employees and management, which are triggered by the M&A transaction.  Once the immigration issues are clearly identified, I can recommend alternatives and solutions for a successful transition once the transaction is completed.

Below is a checklist relating to immigration issues that may arise as a result of an M&A transaction and the importance of a thorough review in order to understand the impact an acquisition will have on current employees and management.

I-9 Compliance

· Review of management organization chart and list of employees currently on non-immigrant visas and transitioning into permanent resident status.
· Review of employee files currently under non-immigrant visas or who possess work authorization through other immigration benefits.

Potential Labor Disputes

· Review of any labor disputes that could impact salaries for temporary workers and those transitioning into permanent resident status.
· Acquire information concerning any previous, pending, or threatened labor stoppage that would impact the legal status of certain employees.
· Understand and anticipate the liability of the acquiring company in returning foreign employees to their home country should there be a labor stoppage.

Compensation and Employment Agreements

· Review employment and consulting agreements, and other documents relating to transactions with officers, directors, key employees, and related parties who hold non-immigrant status.
· Review the schedule of compensation paid to officers, directors, and key employees who hold non-immigrant status.


Talent Acquisition and Retention

· Retention of key employees under non-immigrant or temporary work status. What agreements/incentive arrangements are in place with key employees to be retained by the buyer? Will these be sufficient to retain key employees?
· Consideration as to whether the new company may need to file new applications with the immigration authorities reflecting new ownership, new place of employment, salaries, new job descriptions or other material changes to ensure continued work authorization.
· Transfer of key employees from abroad who may need temporary work visas.

Non-immigrant visa compliance with the US Department of Labor

· Review evidence of compliance with Labor Condition Applications, Labor Certification Applications for employees currently on non-immigrant status and transitioning into permanent residency.
· Review and maintenance of employee’s public access file in compliance with the US Department of Labor in accordance of 20 CFR 655.760
· Plans relating to termination pay, promotions, demotions, transfers,  relocation assistance, compensation, or fringe benefits to employees currently on non-immigrant visas and those transitioning into permanent residency.

Consequences of Layoffs

What layoffs and resultant severance costs and other liabilities on non-immigrant or temporary workers will be likely in connection with the acquisition?

Due to aggressive enforcement policies from the US Department of Labor and Immigration & Custom Enforcement, immigration issues that arise in connection with M&A can no longer be overlooked. It is key for any company who is undergoing corporate change to consider retaining experienced immigration counsel to perform due diligence of immigration status of the workforce including key employees that may include officers and managers.  

In the course of the investigation and review  my job is to investigate the target company’s compliance with immigration policies, procedures and liabilities and advice you on the best practice and solutions moving forward.

One of the benefits of working with a small firm is that you can reach me directly at +1 (702) 308-6805 should you have any questions about the due diligence process during M&A.