What Happens to Employees During Mergers and Acquisitions?

Insight from Maryland Employment Lawyers

When a company changes hands, it can send shockwaves through the workplace. If your employer is part of a merger or acquisition (M&A), you're probably wondering what this means for your job, benefits, and future. At Lebau & Neuworth, our employment attorneys have helped countless Maryland workers navigate these transitions—and we know how stressful and confusing this time can be.

Whether you're at a Baltimore tech firm being acquired by a larger competitor, or you work at a DC-based nonprofit merging with another organization, M&A events usually trigger big shifts. Here's what you should know.

Mergers vs. Acquisitions: What’s the Difference?

First, a quick breakdown:

• A merger is when two companies combine to form a new entity. Leadership structures are often redefined, and teams may be blended together.
• An acquisition happens when one company buys out another. In many cases, the purchased (or “target”) company is absorbed and no longer exists as a separate business.

While the legal distinction matters to executives, both scenarios can significantly impact employees—especially those working at the target company.

What Employees Often Face During M&A

If your company is going through a merger or acquisition, you might experience:

1. Job Losses and Restructuring

Redundancy is common in M&A events. Companies don’t need two HR departments or duplicate leadership roles. If you’re in a role that overlaps with one at the acquiring company, you might be at risk.

Other departments commonly affected:

• Finance and accounting
• Middle management
• Marketing or communications

Layoffs usually happen early in the process, but sometimes come in waves as the new leadership reevaluates structure.

2. Changes to Benefits and Pay

Your health insurance, PTO, retirement plan, or bonuses might change. In some cases, employees are asked to switch to the acquiring company’s benefit plans—which may be more limited or simply unfamiliar.

Some things to keep an eye on:

• Will your 401(k) or pension still be honored?
• Are your unvested stock options at risk?
• Does the new company offer comparable health coverage?

3. New Management and Company Culture

A merger often brings in new supervisors and new workplace expectations. Some employees thrive in this kind of reset, but others find it jarring—especially when the culture of the new company feels unfamiliar or impersonal.

You might also need to reapply for your current role, accept a new title, or be moved to a different team.

Legal Protections for Maryland Employees

You might not be able to stop the merger, but that doesn’t mean you’re powerless. In Maryland and DC, employees still have important rights during mergers and acquisitions.

For example:

• Employment contracts: If you’re under contract, your employer may owe you severance or notice before terminating your role.
• WARN Act protections: Larger layoffs may trigger the federal WARN Act, which requires employers to give 60 days’ notice in certain cases.
• Non-compete agreements: These are sometimes introduced or updated during M&As—make sure you understand any restrictions before signing.
• Discrimination or retaliation: If you’re targeted for layoff based on age, race, gender, or for speaking up about company practices, that may be illegal.

What Should You Do If You’re Facing a Merger?

Every situation is different, but here are a few steps to consider:

• Don’t sign anything under pressure. Review severance or transition agreements carefully.
• Request clarity. Ask your HR department what the changes mean for your position and benefits.
• Document everything. Keep records of communication, especially if you're concerned about discrimination or unfair treatment.
• Talk to an employment lawyer. A lawyer can help you review contracts, understand your rights, and advocate on your behalf.

Serving Maryland Workers Through Career Transitions

At Lebau & Neuworth, we’ve stood by Maryland workers for decades. We’ve helped employees across Baltimore, Silver Spring, Rockville, and the DC Metro Area protect their rights during mergers, acquisitions, and reorganizations.

If your company is being bought or merged and you’re unsure what to do, you don’t have to figure it out alone. Our team can help you understand your options, review your documents, and take action if your rights are being violated.

Schedule a Consultation Today

Call us or fill out our contact form to speak with a Maryland employment attorney. Whether you're facing a layoff or just want to make sure you're protected, Lebau & Neuworth is ready to stand up for your rights.