Illinois Ruling: Business Buyers, Review Sellers’ EEO Practices

Companies or individuals acquiring an existing business should determine if the seller faces potential civil rights violations and, if so, take this fact into account in the acquisition process. If a buyer overlooks these liabilities, they could inherit them, despite longstanding Illinois precedent against such “successor liability,” at least according to one appeals court.In People ex rel. Dep’t of Human Rights v. Oakridge Nursing & Rehab Ctr., the First District Appellate Court held that the general rule of successor corporate nonliability may not apply to Illinois Human Rights Act claims against predecessor companies, if circumstances fit an exception to non-liability previously applied only in federal courts.