FLSA Liabilities Transfer in Buyouts, 7th Circ. Says

Law360, New York (March 26, 2013, 8:39 PM EDT) -- The Seventh Circuit ruled Tuesday in a precedential opinion that electrical engineering firm Thomas & Betts Power Solutions inherited the federal employment law liabilities of a smaller company when it bought the company's assets out of insolvency.

Most states limit an acquiring company's exposure to a predecessor's obligations, but U.S. Circuit Judge Richard Posner said a tougher, federal standard for so-called successor liability applies when it comes to any federal labor statutes, including the Fair Labor Standards Act.

That standard means that even though Thomas &...
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