Tracey Diamond, Emily Schifter, Tunisia Poole, and Destiny Washington discuss the challenges of integrating employees during and after mergers and acquisitions through the lens of the classic film Pretty Woman.
In this episode of Hiring to Firing, hosts Tracey Diamond and Emily Schifter discuss the challenges of integrating employees during and after mergers and acquisitions through the lens of the classic film Pretty Woman. Joined by Tunisia Poole and Destiny Washington of Southwire Company, this conversation covers common employee concerns, legal considerations, and the importance of clear communication when managing workplace transitions. Tune in to discover how to navigate the complexities of mergers and acquisitions with strategic foresight.
Troutman Pepper Locke's Labor + Employment Practice Group provides comprehensive thought leadership through various channels. We regularly issue advisories that offer timely insights into the evolving employment law landscape, and maintain the HiringToFiring.Law Blog, a resource spotlighting best practices for employers. Our Hiring to Firing Podcast, hosted by Tracey Diamond and Emily Schifter, delves into pressing labor and employment law topics, drawing unique parallels from pop culture, hit shows, and movies.
Hiring to Firing Podcast — Navigating Employee Integration in Mergers and Acquisitions: Lessons From Pretty Woman
Hosts: Emily Schifter and Tracey Diamond
Guests: Tunisia Poole and Destiny Washington
Recorded: March 11, 2025
Aired: July 15, 2025
Emily Schifter:
Welcome to Hiring to Firing, the Podcast, where we talk about all employment issues from Hiring to Firing. Today, we're talking about employee-related issues in mergers and acquisitions, and we're using the movie Pretty Woman, starring Julia Roberts and Richard Gere. The movie has a famous scene involving escargot at a fancy restaurant. Tracey, does that bring any memories to mind for you?
Tracey Diamond:
Yes. We're going to expose yet another instance of my daughter's childhood for this one. So let me picture the scene. We're on a cruise, and my daughter at the time was little, and she had a whole list of favorite animals starting with, I believe, hippos. One of which she named Molly. Snails were her fourth favorite animal after walruses, hippos, and I think it was bunnies. Anyhow, on the menu was escargot. She turned to us and said, "What is this escargot?" At which point, one of my family members begrudgingly said to her, "Honey, it's snails." We braced ourselves for the retribution, and she sat there and thought for a minute, and then said, "You know what? I like snails. I'll eat that." At which point, she polished off the entire thing.
Listen in to our latest episode when we talk about Pretty Woman and how that works with mergers and acquisitions.
[INTRO]
Tracey Diamond:
Welcome to Hiring to Firing, the Podcast. I'm Tracey Diamond, and I'm here with my partner and co-host, Emily Schifter. Together, we tackle all employment issues from Hiring to Firing.
Emily Schifter:
Today, we are so excited to welcome Tunisia Poole, SVP and Deputy General Counsel at Southwire Company, and Destiny Washington, Senior Counsel, Labor and Employment at the company. Welcome to you both. Thank you so much for joining us today. We're so glad you're here. Why don't you tell us a little bit about Southwire and both of your roles with the company?
Tunisia Poole:
Southwire is North America's leading wire and cable manufacturer founded in Carrollton, Georgia. Southwire, a large family-owned company will celebrate its 75th anniversary in a couple of weeks. We have 9,000 team members across 60 sites in the United States, Canada, Mexico, and Honduras. Our core values are empowerment, consistency, trust, and inclusion. As deputy general counsel, I lead a team of talented professionals responsible for labor and employment, mergers and acquisition, intellectual property, contracts, litigation, legal operations, risk management, and business continuity.
Tracey Diamond:
That's all. Nothing else?
Tunisia Poole:
Nothing else. I also serve as lead M&A counsel for Southwire, and I've worked on approximately eight deals since my seven and a half years of being employed with Southwire. I served as labor and employment counsel for the company for three years and exclusively represented management for 15 years and labor and employment matters. Destiny, I'll turn it over to you.
Destiny Washington:
Sure. Thank you, Tunisia. I was wondering if you were going to mention that you are a labor and employment practitioner by trade. She knows everything we're going to talk about today and more, so she could actually take my position on this podcast. But I'm Destiny Washington. I'm Senior Labor and Employment Counsel for Southwire. I advise our people and culture function, which is HR, on all aspects of the Hiring to Firing process, including recruiting, onboarding, evaluation, performance, discipline, termination, retention, everything in between. Also included in the labor and employment practice is immigration, employee benefits. I don't think I'm missing anything there. We're pretty busy, and I'm the only labor and employment counsel at the company for those 9,000 employees. So I'm pretty busy, which is a good thing.
Emily Schifter:
When we say Hiring to Firing, the two of you intimately know all of the things that come in between.
Tunisia Poole:
Yes.
Tracey Diamond:
Well, we're thrilled to have you both here today, and you are the perfect guest for our topic, which is integrating employees of acquired companies after a deal. I understand, and Tunisia, you just mentioned that Southwire has a lot of experience in this area, as you've had several deals over the last few years. You want to tell us a little bit about that generally?
Tunisia Poole:
Sure. Southwire's core business is wire and cable, and we've grown our wire and cable business organically and inorganically. In 2014, Southwire acquired Coleman Cable. More recently, we acquired the Genesis wire and cable business in 2023. Southwire has also grown in adjacent markets such as electrical products and engineered solutions, as well as our electrical services businesses. Since I joined the company, many of the transactions that I've worked on had been for our EP & ES business and our services division. Those acquisitions have expanded our product and our services offerings.
Tracey Diamond:
Very interesting. To kick off today's discussion, as we always do, we're going to play clips from a movie. Today's movie is the 1990 movie Pretty Woman. We've been doing some really current movies, and we thought we'd take a little step down memory lane for this one. For those of you who don't recall, Pretty Woman stars the beautiful Julia Roberts and the heartthrob Richard Gere. The movie was originally conceived as a dark drama about prostitution in LA, with Julia Roberts' character, Vivian, being addicted to drugs, and Richard Gere's character, Edward, literally throwing her out of a car at the end and driving away, which was really quite shocking. That it was rather improbably reconceived as a romantic comedy and became a mega hit, catapulting Julia Roberts in particular to stardom.
Couple of fun facts about the movie. As you can see, I did a deep dive here. The role of Vivian played by Julia Roberts was originally offered to Molly Ringwald, and Al Pacino read for the part of Edward. There is an 18-year age difference between Richard Gere and Julia Roberts. At the time of filming, Roberts was 22 years old, and Richard Gere was 40. Julia Roberts had a body double for some of the more risqué scenes and developed a case of the hives because of stress during filming of one of the love scenes. The bum in the movie was played by the famous Gary Marshall, who also directed the movie.
While by today's standards, the film can be seen as controversial in its depiction of women, and I have to say I actually had a bit of a hard time watching Edward as he treated Vivian like a child, there's no denying the chemistry between Roberts and Gere in the film. The infamous red gown is my favorite ball gown of all time.
Emily Schifter:
But we digress. We chose Pretty Woman today actually not because of any of the fun facts that Tracey just mentioned, but because it has several scenes revolving around the corporate deal that Edward was working on while he was in LA. He's in LA because he was in the process of acquiring the Morse family's shipping company so that he can chop it into little pieces and sell off the parts. Let's take a listen.
[BEGIN CLIP]
Vivian:
And you don't make anything, and you don't build anything.
Edward:
No, no.
Vivian:
So what do you do with the companies once you buy them?
Edward:
I sell them.
Vivian:
Here, let me do that. You sell them.
Edward:
Well, I don't sell the whole company. I break it up into pieces, and then I sell that off.
It's worth more than the whole.
Vivian:
So it's sort of like stealing cars and selling them for the parts, right?
Edward:
Yes, sort of but legal.
[END CLIP]
Emily Schifter:
Let's start by talking about the different types of corporate deals generally and what that means for the employees of the company being acquired. Tunisia, what happens to the employees of the seller in a stock deal, and how is that different from a deal structured as an asset deal?
Tunisia Poole:
In a stock deal, the buyer is essentially taking over the seller's entire business, including the employees. The employees come over with the transaction. In an asset deal, however, the buyer is just buying the assets of the company and may or may not hire the employees of the buyer. If they do, they would treat those employees as new employees of the seller and on board them as such. Then sometimes, in an asset deal, the parties negotiate a promise by the buyer to keep on certain employees at a particular compensation and level of benefits for a specified period of time.
Emily Schifter:
Yes, it's interesting. I feel like when I'm advising clients on deals, a lot of times, whether a deal is structured as a stock deal or an asset deal is not often driven by employment considerations. It's tax reasons, business reasons. Other considerations come into play, and sometimes people are surprised when they see the impact that it has on employee transitions. It can be counterintuitive to think in an asset deal that it's a termination and then being rehired versus sort of that continuation on in the stock deal context.
Tracey Diamond:
I see that get really granular. Destiny, you probably see this too when you're integrating employees. It can get as detailed as whether or not the seller is going to even give you access to personnel files, which would be dependent on, in some respects, whether it's a stock deal or an asset deal. I've had parties arguing over in an asset deal whether the buyer should even be entitled to those personnel files and I-9 forms, since the seller truly is treating employees like a new employee. Then it gets a little tricky sometimes in terms of carrying over
[inaudible 0:09:33] and paid time off and stuff like that. But I'm getting a little ahead of ourselves.
Emily Schifter:
Destiny, what are some common employee concerns in an acquisition? I know, obviously, change is always scary or can be for employees when things that are changing very quickly with a deal. But what are some of the concerns that you've seen?
Destiny Washington:
I think the main concern is will I have a job, so job security. That's the main thing. Secondly, compensation. I mean, not just how much you're getting paid by the hour or in a salary but shift premiums, if you had a shift premium before, if you're going to have the same now. As you all know, some things are dictated by state law, and some things are not, and some things are gratuitously given by the company. Every company offers something different. Vacation and benefits staying the same, that's another hot topic.
Speaking of benefits, health benefits, depending on the time of year that your company is acquired, you may have met three-quarters of your deductible or your entire deductible, and you may have been planning for a procedure. To know that you're going to go to a new company where that deductible might start over is kind of unsettling. That's also something that is at the top of people's minds. Bonuses, another thing to think about is if an employee just simply has to remain employed for a certain amount of time to get a yearly bonus. But it's December, and they will not make the end of the year, so they technically won't qualify for the bonus. Knowing, “Will I have a bonus? I was expecting this bonus. I had plans for it.”
Another thing is your day-to-day employment change with regards to policies, your schedule changes and title. Another thing is maybe changes in career band because you may have been a vice president at your current company, but there's no vice presidents at the new company. Or there's too many vice presidents at the new company, so you either have to go up or down.
Those things are important to employees, also whether or not your role is going to be classified as exempt or non-exempt. As you know, during due diligence, that's something that we look at in employment due diligence to determine whether or not there's a risk of misclassification.
The role in company, whether your supervisor will stay the same, the overall health and growth of the company, particularly if there is an employee who's moving from the company that's privately held to publicly held or vice versa. Then lastly, cultural integration. I've seen that come into play where maybe our company is a company that's headquartered in the South, and we may be acquiring a company that is in the Midwest or up North or out West. Just the cultural differences in between the people who work for the company and not necessarily the company itself could be a shock to some employees who are being acquired.
Tracey Diamond:
It really is a lot to think about. Tunisia, let's bring you into the conversation. What are some best practices in managing through these concerns?
Tunisia Poole:
Open and honest communication, also assigning an integration lead that's on site and that helps with the cultural shift and integration. Having a training plan in place, and I'm speaking from the perspective of a buyer, acquiring new employees, but having a phased approach to training so that new employees get up to speed on your policies and procedures.
Then having designated people and culture representative on site that may be assigned to that facility. But you also want someone coming in from your corporate headquarters to help the employees get acclimated. I think all of those things help with integration.
Tracey Diamond:
Is there an opportune time to tell employees what is about to happen if you're the seller or if you're the buyer for that matter? Or does that really depend?
Tunisia Poole:
I think it depends. But for me, the opportune time is closing, the day of closing.
Tracey Diamond:
Once it’s gone.
Emily Schifter:
I think you both raise a good point about it's not just on the buyer to be thinking about these things, but sometimes the seller can have just as big of a role of thinking what are the things that I want for my employees who are transitioning, and what can I do in advance of the closing or in advance of transitioning employees over to make things run smoothly. What are the potential pain points? Obviously, that depends on negotiating power, but I think it’s important to not just think, “Oh, it's on the seller to figure it out after closing day.” But it's something that all parties, including the lawyers, can be thinking about as the process goes on.
Tracey Diamond:
Absolutely.
Destiny Washington:
I just wanted to add that Tunisia mentioned having an integration lead. I also – I don't know if everybody does this, but there comes a point where somebody that works at the facility needs to be involved to lead the process. Of course, this person will have to be under a non-disclosure agreement, possibly even given some incentive to remain like a retention bonus. But that is essential because they are the employees and the leaders who will shepherd us through this entire process because we're not on site all the time, and they know everything about the business and all the questions that come up, and they're like our eyes and ears on the ground.
Emily Schifter:
That trusted boots on the ground person is kind of hard to replace. Kind of to that point, so you talked a little bit about a retention arrangement. Have you seen it to be the case sometimes where the buyer says, “You know, I really do need the top managers at the plant, or I need these particular leaders who have a lot of knowledge of the business. I mean, I want to keep them on.”? How do you manage through that? How do you negotiate that?
Destiny Washington:
The answer to that is very carefully. We manage it very strategically. Fortunately, we haven't had to make a decision to have to get rid of a majority of people in these acquisitions. The people that have the knowledge, we plan for them to remain employed. But sometimes, for some reason, at some point after integration, there might be a redundancy in roles, and there might be somewhere else where that employee can go.
retaining them as a consultant if they're not necessarily going to remain an employee and then also through retention agreements, which are agreements to keep a person on board for a specified amount of time and offer them an incentive to remain employed so that they could help us through the processing and contribute to the company.
Tracey Diamond:
Destiny, are there any legal considerations besides the retention piece for those employees that you can't keep on?
Destiny Washington:
Yes. If for some reason some employees have to be let go at the time of closing or even shortly thereafter, there might be requirements that we have to satisfy under the WARN Act, the Worker Adjustment and Retraining Notification Act. That's essentially where we have to give 60 days’ notice to those employees if there's a mass layoff or if there's a plant closing. In those cases, if we don't follow the law, the penalty is that we have to pay in lieu of termination. That could be a lot of money, depending on how many employees are impacted.
There also might be state mini WARN Acts that we have to take into account as well that might have obligations that are more pro-employee or that afford more money or even more time.
Tracey Diamond:
Yes. A good example of that is New Jersey actually because they have a relatively new mini WARN Act where you have to pay mandatory severance, even if you give the required notice, and the number of employees impacted by WARN is much lower than the federal law. Really good point, Destiny, that you have to make sure you're mindful of whatever state you're working out of as well.
Destiny Washington:
Right. To just add a little bit to what Tunisia said about notification to impacted employees being the date of closing, if you do have WARN obligations, then you obviously can't meet them because you're giving them notice the day of that they're being laid off. That's something that has to be carefully considered and negotiated between the parties when you're negotiating a purchase and agreement. Whoever retains those obligations to WARN, probably there'll be an adjustment in the purchase price in their favor.
Tracey Diamond:
Then what about for individual employees that are not coming over in the transaction? Do you have any thoughts on severance?
Destiny Washington:
Well, that's something also that's negotiated between the buyer and seller. Depending on whoever assumes those responsibilities, there will be an adjustment in the purchase price. Sometimes, the sellers may have an actual severance plan, and the buyer may not. That even might be more so of a reason why the seller probably should assume it. It just is definitely something that has to be considered that is a lot of money and that will make an impact on the bottom line.
Emily Schifter:
I think you're right. What's so interesting about M&A work and deals is that everything's negotiable. I mean, most everything anyway, and you're right. There could be reductions in purchase price, and there's ways around all of it, but definitely things that have to be thought about and can't leave till the 11th hour right before closing.
Destiny Washington:
One other thing I wanted to add is that communication is essential. When there's an acquisition, obviously, you're acquiring the company, but the people are the company. The employees are the company, but they need to feel confident that this change is going to be something that's good for them. Just to give an example, like if you're doing any public communication or just any communication in general, even though something may be legally correct, the terminology you use, it might not be something that's easily understood by the average employee. Maybe you can massage that language to where they understand it and they're clear that they're being taken care of.
Emily Schifter:
I think that's right. This is where HR employment teams can be really helpful because it's one thing to comply with the law. It's another to make sure that employees feel welcomed and make sure you manage that cultural transition to the points you raised earlier.
Tracey Diamond:
Yes. Like you guys said in the beginning, change is hard. If you're communicating in a way that's not understandable to the employees, you're just making it that much harder on them to accept the fact that things are changing. So important to be able to speak the language that they understand.
Tunisia Poole:
Lots of collaboration between the lawyers, people and culture, and the corporate communications team to make sure that the messaging is legally sound, but also that it's well received by the employees.
Emily Schifter:
We've talked a little bit about issues that might come up in due diligence and state-specific, things that might be different. Tunisia, how do you typically see that handled if you're the buyer and you do due diligence on the seller and you notice an issue, maybe like you might need to reclassify somebody from exempt to non-exempt or from an independent contractor to employee or something? What's the best way for a buyer to handle that?
Tunisia Poole:
Yes, so a couple of ways. I mean, they'll definitely have to cooperate with us during the due diligence process so that we can get comfortable with the issue and understanding if there's any exposure and the amount of exposure. But then also we talked about concessions on the purchase price. That's another alternative, setting up an escrow account and including or allocating a certain amount for that potential exposure. If there's reps and warranty insurance, we know that there wouldn't be any coverage because it's a known issue. Then if it's a FLSA issue, wage and hour issue, then that's excluded from reps and warranty insurance most of the time anyway. Those are some of the things that we take into consideration when we've identified potential liability and exposure.
Tracey Diamond:
How do you think about the timing of those sorts of changes? Obviously, if you see something that's maybe not been done correctly, your first instinct would be, well, let's change it day one. But do you ever see a reason to think maybe we should wait a little bit? We've talked about all the changes that are happening for an employee. Is that something that you've ever seen come into play?
Tunisia Poole:
I would change it day one, but it also depends on the structure of the deal, right? We talked about if it's a stock deal, you immediately assume the risk. If it's an asset deal, then you hire them as a new employee. At that time, I think if it's an asset purchase, I'm going to make the change immediately. But I'd want to understand the statute of limitations and the gravity of the risk before implementing the change during a stock deal.
Emily Schifter:
Absolutely. Destiny, what are some other integration considerations or things to be aware of or best practices that you can think of?
Destiny Washington:
Integration is to me where the real work begins. Although most of these things were studied and analyzed during due diligence, the truth is revealed. What does the truth do? Anybody know? It sets you free.
Emily Schifter:
That's right.
Destiny Washington:
At that point, this is where we kind of get into the nitty-gritty of the work. People and culture and I are working together to essentially help these workers become part of our Southwire puzzle. Sometimes, it comes together seamlessly, and sometimes it doesn't, but it takes a little bit longer. Sometimes, you have to maintain policies for Southwire and policies for this company that we require kind of in tandem, and then eventually merge them together a few years down the line. But that's where the hard work is for me.
The good thing is that I had never had experience in M&A before I worked at Southwire, and it is so interesting to me, the psychology of it all when you just have to bring two bodies together. It's like two companies are marrying each other. You would, of course, wish that you knew certain things beforehand, but then you just have to find a way to work it out so that your marriage can be productive.
Some things that I have encountered in integration are, first, there are questions at the client level, people and culture about, “Well, we didn't know this during due diligence.” I think about it and I'm like, "You know what? We didn't." In particular, if you're moving into a new state where you don't have operations or you haven't had them in a long time and there's this very unique law that you didn't even really think about, but now you have to follow it, right? You're being asked by the client, like, "We didn't know about this." Well, yes, we knew it existed,” but it kind of slipped your mind.
Now, I just take that experience in the next due diligence, and am looking at these things now so that I'm just learning more and more things to look at. Rarely are labor and employment issues deal breakers, but it's nice to know and have people and culture and the company to be prepared to deal with those issues when they come to us. Something else I didn't think about is that during due diligence, you really only know about legal claims, about litigation, and maybe demand letters, and then maybe complaints. That's how you find out about litigious employees.
But you necessarily might not find out about a poor performer or an employee that's subject to a PIP or a final written warning. You wouldn't know about that. Then it happens, and you're like, “Why didn't we know about this?” It just makes me think of more ways to improve any due diligence in the future for any future acquisitions that we have. As you can tell, I'm excited about integration.
Emily Schifter:
I love the marriage analogy. I've heard labor and employment law described as the family law of the business world. I found that to be very true.
Tracey Diamond:
In the movie, Mr. Morse Sr. expresses concerns for his employees as the seller, whom he sees as family, to your point, Emily, and whether they are going to lose their jobs. The movie is a good example of this as Vivian encourages Edward to find common ground with the Morse’s. In the end, they agree to build ships together. Let's take a listen.
[BEGIN CLIP]
Jim Morse:
I've reconsidered my position on your acquisition offer on one condition. I'm not so concerned about me but the people who are working for me.
Phil:
It's not a problem. They'll be taken care of. Now then, gentlemen, if we could address ourselves to the contracts in front of you. If you look –
Edward:
Excuse me, Phil. Gentlemen, I'd like to speak to Mr. Morse alone. Mr. Morse, my interests in your company have changed.
Jim Morse:
What is it you're after now, Mr. Lewis?
Edward:
Well, I no longer wish to buy your company and take it apart. But I don't want anyone else to either, and it is still extremely vulnerable. So I find myself in unfamiliar territory. I want to help you.
Jim Morse:
Why?
Edward:
Mr. Morse, I think we can do something very special with your company.
Jim Morse:
What about our Navy contracts?
Edward:
They weren't dead, just delayed. I bluffed a little bit.
Jim Morse:
You're very good at it.
Edward:
Thank you very much. It's my job. I think we can leave the details up to the others.
Jim Morse:
I find this hard to say without sounding condescending, but I'm proud of you.
Edward:
Thank you.
[END CLIP]
Tracey Diamond:
In real life, do you find that this sometimes happens in deals where the seller is really standing strong on concerns about what's going to happen to the employees and how does the buyer manage those expectations?
Tunisia Poole:
Yes. So it does happen. When I talked about the differences in stock deals versus asset deals, one of the things I've talked about is the parties will negotiate a promise by the buyer to keep certain employees on for a specified period of time at a certain level of compensation and benefits. It's because the seller is concerned about the well-being of the employees, and they want to make sure that the employees stay at a certain level. It is a valid concern and a topic that the parties often negotiate.
Tracey Diamond:
The Mr. Morse's of the world really care about their employees, which is a nice thing to see. Well, thank you both so much for joining us today. It's really been a pleasure having you on, and this is a really very interesting topic and I think a topic that really provides some real practical advice to our listeners. Thank you to our listeners for listening in to Hiring to Firing. Shoot us an email, tell us what you think, and stay tuned for our next episodes. Thanks so much.
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