What Happens to Discrimination and Harassment Claims When a Business Is Bought by a Larger Company?
Workplace harassment and discrimination are pervasive issues that affect millions of employees worldwide each year. From inappropriate comments and unfair treatment to deeply entrenched systems of bias, these experiences can leave employees feeling powerless and isolated. When a small business—your workplace—gets acquired by a larger company, questions often arise about what happens to ongoing or unresolved discrimination and harassment claims.
Do these claims disappear? Will the new company hold the previous owners accountable? Can victims expect their concerns to be addressed under a new management team? This blog explores the impact of corporate acquisitions on employee rights, providing clarity and actionable advice for navigating this complex scenario.
Workplace Acquisitions and Their Impact on Employees
Corporate acquisitions, where a larger company buys and takes over a smaller business, are commonplace in today’s business landscape. They often bring drastic changes for employees—from transitions in company culture to restructuring of roles and policies. While these mergers are marketed as growth opportunities for the business, employees may find themselves grappling with uncertainty and upheaval.
For employees who have filed discrimination or harassment claims prior to the acquisition, this uncertainty can turn into fear. Questions abound—is the new management obligated to honor pending claims? Will there be retaliation? Or will such complaints be swept under the rug, citing “corporate restructuring”?
An acquisition often leads to significant changes in Human Resources (HR) systems, policies, and responsible personnel. At times, it feels like the slate has been wiped clean for the incoming organization. However, this doesn’t mean previous claims are invalid—it’s a matter of understanding your legal protections and the process of maintaining accountability.
Legal Rights and Protections for Employees
Employees are protected by federal and state employment laws against harassment and discrimination under regulations such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). These laws make it illegal for employers to discriminate against employees based on race, gender, age, disability, religion, and other protected categories.
When a business is acquired, these protections do not disappear:
- Successor Liability:
Many jurisdictions enforce “successor liability,” meaning the larger company acquiring the smaller business inherits the legal responsibility for claims filed at the original organization. Employees should understand that their rights don’t evaporate just because ownership has changed hands.
- Pending Claims:
If a claim has already been filed with an external agency—such as the EEOC (Equal Employment Opportunity Commission)—the new owner is legally compelled to address it.
- New Policies:
While the new owners may implement new anti-harassment and anti-discrimination policies, this doesn’t absolve them of addressing past grievances under the prior management.
One critical point for employees to note is that the details of an acquisition agreement might stipulate whether discrimination claims are handled by the acquiring company or remain the responsibility of the previous owners. Understanding these provisions in the agreement is vital.
What Employees Can Do to Protect Their Rights
Filing or continuing a harassment or discrimination claim during a corporate acquisition can be intimidating. However, there are steps employees can take to ensure their rights are protected and their voices are heard amidst the upheaval:
- Document Everything:
Maintain records of incidents, including dates, times, witnesses, and specifics of any harassment or discrimination you’ve experienced. Documentation becomes even more crucial during an acquisition to preserve the context and details of your claim.
- Retain Claim Records:
If you’ve already filed a claim, make sure you have copies of all documentation, including communication with HR, legal filings, and correspondence with external agencies like the EEOC.
- Seek Legal Advice:
Consulting an employment attorney can help clarify how claims are addressed during acquisitions in your state. A lawyer can provide insights specific to your case and advocate for your rights if retaliation or dismissal occurs.
- Monitor New Policies:
Pay close attention to new codes of conduct and employee policies introduced by the acquiring company. If unclear, ask for explicit clarification on how prior complaints will be handled under these new guidelines.
- Continue Reporting:
If the inappropriate behavior persists, don’t hesitate to voice concerns to the new HR team. Just because the ownership or reporting structure changes doesn’t mean the behavior should be tolerated.
Remember, laws are designed to offer robust protection, but you may need to be proactive about ensuring they are enforced.
Real-Life Case Studies
Case Study 1: Accountability in the Workplace
In 2017, a teenage employee at Elite Wireless endured repeated sexual harassment from a sales manager, including unwelcome advances and requests for sex. The situation worsened when the sales manager sexually assaulted her during a holiday party. Despite the employee filing reports and a criminal complaint, Elite Wireless failed to take action, allowing the manager to continue working alongside her. In 2019, Wireless World acquired Elite Wireless and, according to the EEOC’s charges, became liable for the company’s failure to address these serious allegations. This case highlights the critical need for swift and decisive responses to workplace harassment to protect employees and promote accountability.
Case Study 2: Discrimination and Corporate Bias
Mr. Sizar joined Hatch Mott MacDonald (a predecessor to The Mott MacDonald) in 2013 and advanced through the corporate ranks, consistently earning praise for his strong performance through glowing reviews and evaluations. Despite his success, he observed a troubling pattern of bias within the organization, where younger white males were favored over more qualified non-white, female, and older employees.
For example, his supervisor, Daniel Tempelis, terminated two senior staff members in their early sixties—one of Chinese descent and the other of Asian Indian heritage—and replaced them with younger, less experienced white males. Mr. Sizar also reported that numerous other non-white and older employees were similarly dismissed and replaced by less qualified, younger white males.
This case underscores the pervasive issue of systemic discrimination in the workplace. It serves as a powerful reminder of the importance of fostering equity, addressing bias, and holding organizations accountable for the fair treatment of all employees.
What This Means for You
Discrimination and harassment should never be overlooked, whether under your current employer or a new corporate owner. If your workplace is undergoing changes due to an acquisition, remember that federal and state laws exist to protect you. Don’t hesitate to consult professionals, document your experiences thoroughly, and speak up if necessary.
Acquisitions might bring a storm of change, but your rights form the anchor. Stay informed, proactive, and engaged in ensuring your voice is heard.
Are you currently dealing with workplace harassment or discrimination during a corporate acquisition? Seek legal advice to protect your rights and review your options. The right support could make all the difference.