What happens to workers' rights and contracts when there is a transfer of employer?

When there is a transfer of employer, such as in a merger or acquisition, workers' rights and contracts typically continue with the new employer. This principle is grounded in labor law and aims to protect employees from losing their rights and benefits due to the change in ownership.

Under laws such as the Worker Adjustment and Retraining Notification (WARN) Act and various state laws, the new employer generally inherits the existing contracts and obligations towards employees. This means that the terms of employment—including wages, benefits, and job protections—remain intact unless explicitly renegotiated or modified through legal processes. Such continuity is intended to provide stability for employees and ensures that they do not face abrupt changes in their working conditions simply because their employer has changed.

The other options suggest scenarios that would strip workers of their rights and contracts, which is inconsistent with the protections typically afforded under labor law. Thus, the continuation of contracts and rights under a new employer is crucial for maintaining employee welfare during transitions in ownership.