Selling Your Business? Why You Might Want an Employment Lawyer

Jul 6 2022

Amanda DeMatteis: Hi, Josh!

Josh Goodbaum: Hi, Amanda! What are we talking about today?

DeMatteis: I thought we could talk about what to do if you are a small business owner who is deciding to sell their business. So, maybe you are a lawyer; you’re an investment banker; you’re a realtor. You have your own business, and you are looking to either sell that or maybe it’s getting acquired by a bigger company. There might be some reasons that you would want to talk to an employment lawyer while you’re going through that process. Can you share those with us?

Goodbaum: Yeah. So a lot of people who sell their businesses would benefit from talking to an employment lawyer because many people who sell their businesses want to keep working. And most people who buy a small business, especially a professional services business like a physician or an accountant, want the former owner to keep working in order to transition the client base to the new ownership.

If you’re going to keep working, you want to try to get an employment contract that spells out your rights and your responsibilities and, more importantly from your perspective as the employee, the responsibilities of your new employer, the buyer of your business. And the time to do that is at the time of the transaction – the sale of your business – because you will never have more leverage in an employment relationship than when your future employer is trying to buy your business.

Now, what are some of the issues that can come up after the sale of your business where you’d wish you had a contract to spell out all the details? These include:

  • How are you going to be compensated? Are you compensated purely on salary? Do you have a commission structure? Do you have an incentive structure? How is it going to mirror or differ from how you were compensated as an owner of this business?
  • What’s the duration of this relationship? Are they going to keep you on for a year, two years, five years, as long as you want? What if the new owner wants you to leave at some point, or what if the new owner tries to change your job duties in some way?
  • You used to own this business – you were in charge of everybody – now you’re not. What is your role exactly? And what happens if at some point, you say, “I don’t like the way this is going. I think I’m ready to leave.” Can you do that? How much notice do you need to give? What are the obligations of your employer to let you leave and to compensate you on the way out the door?

The reality is that contracts don’t matter if everyone is playing nice. If everybody’s getting along and they’re agreeing, it doesn’t really matter if you have a written contract. But business deals can turn messy fast, and that includes business deals that involve the sale of your business – in which you’ve invested your whole life and your livelihood and your energies – to another person or company. If everything goes south, you’re going to wish that you had a clear contract to protect your rights. And the best person to help you achieve that protection is an employment lawyer.

So, that’s why if you’re thinking of selling your small business, you really should talk to an employment lawyer while you’re going through that transaction.

DeMatteis: Makes a lot of sense, Josh. Thank you so much for the information, and thank you for watching. Take care!

Share this Post

amanda dematteis speaking about selling your business

About the Author

Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C.

You deserve justice. We are here to fight for you.

Best Lawyers

Let Us Review Your Case

    We will respond to your message promptly. Although we will keep your message strictly confidential, please note that contacting us does not create an attorney-client relationship.

    Client Experiences

    During a very difficult employment situation, I was referred to Joe Garrison. Recognizing the volatile and time sensitive nature of my employment situation, Mr. Garrison met with me immediately (on the weekend no less). He listened to the details of my case, was able to think through possible creative solutions to offer the employer, and was responsive to my myriad of questions. He understood my concerns about litigation versus settlement, and he worked to find the best resolution possible. I am grateful to have had his support at a very difficult time. —J.C., New Haven, CT

    You will never meet a more knowledgeable and compassionate professional than Steve Fitzgerald. My employment situation was very complex, and Attorney Fitzgerald kept me focused while remaining extremely adept and “thinking on his feet.” Should the need present itself again, I would never seek anyone else’s counsel regarding employment issues. I cannot recommend him highly enough. — J.R., New Haven, CT

    Nina Pirrotti provided outstanding legal advice and was trustworthy, dependable, and responsive. From the start, I was confident that her knowledge and experience would obtain favorable results. On a more personal note, I enjoyed working with her and her staff and felt I was included in every part of the process. The dedication, concern, and interest in me as a client was greatly appreciated, and Nina has earned my highest recommendation. — J.H., Monroe, CT

    I recently found myself in need of a lawyer in handling a dispute with my former employer. I was fortunate to retain Josh Goodbaum as my legal counsel. His legal skills knowledge and professionalism shone through in every step of the process resulting in a very positive result. I highly recommend Josh if you find yourself in need of legal counsel. — S.R., Guilford, CT

    When I go to a lawyer for advice, I am usually anxious, particularly the first meeting. Amanda DeMatteis was clear in describing my options and immediately set me at ease. Realistic assessment is important, and Amanda was clear as to how to set up the case and the direction she felt we should go. I had total confidence in her abilities and knew I was being well represented against a large corporation. More importantly, we were successful! —N.M., Haddam, CT

    Proven Results & Personalized Attention When You Need It Most

    American Law Institute Super Lawyers American College of Trial Lawyers Best Lawyers The College of Labor and Employment Lawyers
    Back to Top
    (203) 815-1716