What Is The US Employee Matters Agreement?

An employee matters agreement is one that deals with the purpose of allocation of responsibility, assets and liabilities related to employees, employee related matters and employee benefits etc. Suppose Company A is being broken down or decides to start up Company B as a subsidiary. In pursuit of this the parent company decides that part of its work force will be transferred to help or work for the subsidiary. It is of course natural that the liabilities, assets and other provisions that the company had originally formed for its employees now be taken over by the new subsidiary. To facilitate this they will enter into an Employee Matters Agreement. The Agreement would contain sub sections that cover important aspects such as Continuity of Employment, Collective Bargaining, Benefit Plans, and Employee Claims etc.