In a recent decision, the Israeli Regional Labor Court ("Court") held that an employer is entitled to take personal and professional qualities into consideration when making decisions regarding the dismissal of employees following a corporate merger.
In the present case, the plaintiff employee was employed by an Israeli private company prior to the company's merger with a US public corporation. Following the merger the plaintiff was dismissed, whereas an employee with a parallel position in the acquiring company was retained.
The plaintiff contended that the dismissal was based on improper considerations, being made notwithstanding the plaintiff's professional achievements. The defendant employer disagreed, alleging that professional and personal attributes, including certain deficiencies in the plaintiff's work, were indeed relevant considerations.
The Court held that dismissals following mergers are generally based on economic reasons, and that in coming to such decisions personal and professional attributes including effectiveness, behavior, and workplace relations can be pertinent. In particular with respect to commercial entities, only in extreme and exceptional cases will the Court interfere with an employer's discretion in connection with dismissals following mergers.
Based on the facts, the Court held that the defendant acted reasonably when it considered professional and personal attributes in coming to its decision regarding the dismissal of the plaintiff employee.
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