Matthew Fontana Discusses Union Climate and M&A Activity With Legal Dive

In “Emboldened union climate adds to M&A risks,” Legal Dive turned to labor and employment partner Matthew Fontana for insight on the rise in union activity and potential impact on M&A transactions, particularly for buyers considering deals with companies facing employee organizing.

Fontana said in his practice, he hasn’t seen buyers express substantially different concerns when it comes to deals with unionized companies. The bigger change, he noted, has been a growing interest in potential organizing activity at non-union facilities, with questions about whether there’s been a union representation election or organizing drive coming up during the due diligence process.

“It’s an assessment of…if this workforce became organized, would that impact what they see as the value of the business?” Fontana explained. Critical changes in labor law last year have raised the stakes of striking a deal with a company that’s seeing nascent union activity, he added.

Regarding an August 2023 decision by the National Labor Relation Board, Fontana said it’s “arguably one of the biggest changes to labor law in the last 50 years” and has made it critical for buyers to determine whether a selling company has faced any demands for recognition from a union — and could therefore pass on bargaining obligations to the buyer.