HOUSE BILL NO. 455
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND CHAPTER 7, TITLE 19, DELAWARE CODE, BY ADDING A NEW SECTION, PROTECTING CERTAIN LABOR CONTRACTS AGAINST TERMINATION OR IMPAIRMENT BECAUSE OF MERGER, CONSOLIDATION, SALE OF ASSETS OR BUSINESS COMBINATION.
WHEREAS, It is in the interest of this State to protect persons engaged ln employment in this State under certain labor contracts; and
WHEREAS, it would be against the public welfare for a corporate merger, consolidation, sale of assets or other business combination to cause or result in the termination of such labor contracts until those contracts reach their natural termination dates.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 7, Title 19, Delaware Code by adding a new section to read as follows:
1706(a) Notwithstanding any other provisions of this Code, no merger,
consolidation, sale of assets or business combination, shall result in the termination or impairment of the provisions of any labor contract covering persons engaged in employment in this State and negotiated by a labor organization or by a collective bargaining agent or other representative. Notwithstanding such merger, consolidation, sale of assets or business combination, such labor contract shall continue in effect until its termination date or until otherwise agreed by the parties to such contract or their legal successors.
(b) For purposes of this section:
(1) 'Business combination' includes any merger, consolidation, joint
venture, lease, sale, dividend exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) whether with a subsidiary or otherwise; and
(2) 'Employment' shall have the meaning set forth in §3302(9)(H) and (I)
of this Title.
(c) In the event that any such employee is denied or falls to receive wages,
benefits, or wage supplements as a result of a violation of this section, and in addition to injunctive or other relief provided by laws, the provisions of Chapter 11 of this Title shall be applicable to secure recovery against the merged or consolidated corporation or the resulting corporation, notwithstanding anything contained therein or elsewhere to the contrary. The remedies provided for herein shall be available against any of the parties to such merger, consolidation, sale of assets or business combination.
(d) This section Is enacted in order to protect the employment interests of
all persons engaged in employment in Delaware under existing labor contracts and shall be liberally construed in every case in order to achieve that purpose. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the Invalid provision or application, and to that end the provisions of this Act are declared to be severable."
Approved April 8, 1988.