Asset versus stock chooses the wrapper. Non-competes and key-employee agreements papers the seats that can move revenue. WARN Act is the notice briefing. Surviving quality of earnings as a seller still binds owner-pay and related-party wages someone will recast.
What actually happens to the roster on closing Monday?
In a typical asset deal the seller ends employment as of the effective time and the buyer offers new jobs, often on new forms, sometimes on similar pay. I-9s start over. Accrued PTO is either paid out, assumed on a schedule, or adjusted in the price. Vacation policies do not "travel" unless the APA says they do. In a typical stock deal the entity remains the employer. Balances and plan documents more often continue. Neither path is a shrug.
Union files add successorship and a separate decision about assuming the CBA. Multiemployer withdrawal liability is a priced letter, not a surprise. Selling a union shop and how union status affects value are the companions. Do not "assume it away" because the teaser said family.
Deloitte and The Manufacturing Institute's 3.8 million workers needed and 1.9 million potentially unfilled (Source: Deloitte/MI, 2024) is why Monday staffing is the deal. A clean APA that empties the second shift is not a win.
| Topic | Typical asset-deal posture | Typical stock-deal posture | Who confirms |
|---|---|---|---|
| Employment | New-hire offers | Continues with the entity | Employment counsel |
| Accrued PTO | Payout, assumption, or price chip | Often continues; still schedule it | Counsel + payroll |
| 401(k) / health | New plans or wrap | Plan continuation or merger | ERISA counsel + CPA |
| I-9 / E-Verify | New files | Existing files still diligence | Counsel |
| Union / CBA | Successorship + assumption decision | Entity history travels | Labor counsel |
| WARN / mini-WARN | Can still fire on a closing or layoff | Same if counts hit | Employment counsel |
| Key seats | Stay bonuses beside offers | Stay bonuses still useful | Deal + employment counsel |
BLS OEWS May 2025 medians — machinist $58,750, welder $53,750 (Source: BLS) — belong in the offer grid and in any replacement-wage recast. They are not a promise anyone will stay.
When does WARN, or a state mini-WARN, sit on the calendar?
Federal WARN (29 U.S.C. § 2101) generally covers employers with 100 or more full-time employees and requires 60 days before a plant closing that hits 50-plus employment losses, or a mass layoff of 500-plus — or 50–499 if it is at least 33% of the site (Source: federal WARN compilations). Many manufacturing sales never hit those counts. Some do. Counsel counts heads the statute's way, not the org chart's way.
Several states run mini-WARN regimes with different headcounts and clocks — New York is commonly cited at 50 full-time and 90 days (Source: NY DOL). California, New Jersey, and others appear in 2026 compilations. Verify the closing state. Do not invent a dollar threshold this page does not have.
SBA 7(a) still caps at $5 million with a 10% injection (Source: SBA). A 7(a) buyer who plans a "right-size" the week after close can create a notice problem the credit memo ignored. Write the first-90-days headcount before you exclusive.
How should PTO, bonuses, and plans be priced so nobody is surprised?
Export the accrual report. Age it. Decide payout versus assumption in the LOI, not at the signing table. Unfunded bonuses and "handshake vacation" are QoE findings and cash items. Related-party family on the payroll is a recast line and a transfer line.
401(k) termination or merger is ERISA work with a calendar. Health-plan continuation and COBRA notices are counsel's lane. This page will not pick a form or a filing date. Put the TPA and the CPA on the Gantt beside the inventory count. People and cages close on the same weekend.
IBBA's 83% three-offer fact on >$5 million deals (Source: IBBA) is a process fact. It does not let you leave PTO blank because another buyer "won't care." Competing LOIs that disagree on who pays $90,000 of accrued time are different prices.
What should the letter of intent say about people?
Write the wrapper. Write that the buyer intends to offer employment to substantially all active employees, or write the exception if a real restructuring is planned. Write how accrued PTO will be treated. Write that key-employee stay packages will be offered before close. Write that floor contact waits for staged disclosure. Write that WARN analysis belongs to counsel if counts could hit.
When to tell employees is the rumor-control essay. Analyzing labor is the buyer underwriting view. Transition is the owner's paid hours, not the floor's.
What does an illustrative transfer file look like?
Illustrative only. A 32-person non-union fab, asset deal, buyer offers everyone at current rate, seller pays unused PTO at close from a $41,000 accrual report, two stay bonuses for the estimator and the maintenance lead, no WARN because counts never approach 100. Ordinary.
A second file: 140-person food plant, stock deal, CBA in place, withdrawal-liability letter in the room, counsel running federal WARN and a state mini-WARN analysis because a shift may come off. Not ordinary, and still not a listing. BizBuySell's 223-day 2025 manufacturing median (Source: BizBuySell) is a planning number; a 60-day notice sits inside it only if you start the count early.
Census CBP 2023 counted 284,452 establishments, 68.4% under 20 employees (Source: Census CBP). Most files are the first example. The statute still exists for the second. Main Street manufacturing at 2.75x median SDE (Source: BizBuySell / Iconic) does not create a people holiday.
Educational information only. Not legal or benefits advice. Employment and ERISA counsel draft offers, notices, and plan motions. Jason Taken is a business broker with HedgeStone Business Advisors. No transfer plan guarantees anyone shows up Monday.
How should a buyer diligence the roster without starting a rumor?
Ask for a headcount by department, tenure, and rate — names redacted until the process allows. Ask for the last two years of turnover. Ask for OSHA 300 logs as a people-and-safety file. Ask who is related to the seller. Labor analysis is the long form. Do not walk the floor asking welders what they make.
I-9 and E-Verify exposure is a diligence request, not a vibe check. A stock buyer inherits the files. An asset buyer starts new ones and still wants to know whether a raid is a live risk. Counsel scopes that request.
If a second or third shift exists only as overtime heroics, write whether the buyer is buying that pattern. Fed utilization 76.0% (Source: Fed G.17) does not staff a night shift. Stay packages on the non-compete page sit beside ordinary offers. Do not use a mass covenant as a substitute for a transfer plan.
What seller mistakes turn a lawful transfer into a walk-off?
Telling the whole plant the week the teaser goes live. Promising "nothing will change" when the buyer has already modeled a supervisor cut. Forgetting the family members on the payroll who will not be offered jobs. Leaving unused PTO as a hallway conversation. Skipping the union letter. Those mistakes create Monday empty chairs.
The other mistake is over-lawyering a 14-person shop with a PE-style benefits memo the file cannot administer. Census CBP 2023's 284,452 establishments and 68.4% under 20 employees (Source: Census CBP) means most files need clean offer letters, a PTO decision, and a script — not a 40-page people exhibit.
Combined 7(a)+504 can reach $10 million (Source: SBA). That stack still needs someone to run the brake. ISM Prices 71.1 (Source: ISM) does not write a W-2. Stanford's $16 million / ~6.2x / ~25% median (Source: Stanford GSB) describes searchers who will hire employment counsel; that median is never a job-shop multiple.
Jason Taken will keep the CIM from treating "great culture" as a transfer plan. HedgeStone will ask for the accrual report and the related-party list in the same week as the recast. How it works keeps the floor quiet until the process opens the door. Then you speak once, with a script, with offers in hand. Speaking twice is how rumors eat a 223-day planning calendar (Source: BizBuySell).
A last practical habit: run payroll through the cutoff like you run the inventory cutoff. Hours worked pre-effective time are the seller's. Hours after are the buyer's. Bonus accruals follow the APA. If those sentences are missing, you will argue about a supervisor's Saturday. Write them. Then pay them. Do not split the difference in the break room. People remember who shorted their last check longer than they remember a multiple.
Temp-to-hire, staffing-agency welders, and 1099 "contractors" who look like employees are a classification and a transfer problem. Put them on a schedule. Counsel decides whether they are offered jobs, ended, or left with their agency. Do not hide a third of the night shift as "temps" and then act surprised when the buyer counts bodies.
OSHA repeat citations travel as a people-and-safety fact even when the APA is an asset deal. OSHA history belongs in the same week as the offer grid. A buyer who inherits a culture of unguarded presses will pay in turnover even if WARN never fires. Price the safety work or watch the roster thin after the wire. HedgeStone will not let a CIM call the citations closed if the guard is still in a crate.