Workers, Information, and Corporate Combinations: The Case for Nonbinding Employee Referenda in Transformative Transactions

This Article proposes that employees be given the right to vote on mergers, sales of substantially all assets, and the other corporate combinations for which shareholders can vote. Unlike shareholders’ ballots, the employees’ choices would not be binding on the company. Referenda would be held before the required shareholders’ elections so that shareholders could know about the results before they cast their votes. Although it might be possible to implement the referendum through federal law, states could also insert the referendum into their systems for corporate governance.