Employment contracts with corporations transforming into new llc still binding?

An employment contract was signed by an
employee 3 years ago with a company
‘X’, a corporation. Last year, Company
‘X’ expanded the services it provided
and the owner transformed it into an
new LLC ‘Y’. When this change
happened, are the employment contracts
and covenants still binding?

Asked on June 3, 2017 under Employment Labor Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

A contract like this may be "assigned" by a business, so long as the contract does not state somewhere in it that it cannot be assigned. To be "assigned" means that the contract is taken over by another business. So your employment contract could be assigned by company X to company Y and would still be binding. 

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