SimplyHR | Employment & Labor Blog 

Buyer beware as the asset protection afforded by non-disclosure and non-solicitation agreements signed by prospective purchasers may not survive the sale. This issue was addressed in a recent federal decision in Illinois offering some cautionary reminders for business buyers. In this case, Keywell LLC (“Keywell”) sought to sell its assets. Croniment Holdings, Inc. (“Croniment”), a bidder for Keywell’s assets, signed a non-disclosure agreement (the “NDA”) which prohibited Croniment from disclosing Keywell confidential information and prohibited Croniment from hiring any of Keywell’s employees with whom Croniment came into contact during negotiations. Keywell and Croniment entered into an asset purchase agreement by which Croniment would serve as the stalking horse bid for Keywell’s assets in bankruptcy.

Reversing existing Board precedent, the National Labor Relations Board (“Board” or “NLRB”) recently ruled that employers that allow employees access to work e-mail systems must presumptively allow their employees to use those e-mail systems for union activity during non-work time. This reversal of long-standing precedent has potentially far-reaching consequences and, at minimum, will require both union and non-union employers to review their communications policies to ensure compliance with the National Labor Relations Act (“NLRA”).