Employment Law

Cisco to acquire cybersecurity firm Splunk for $28B: Employee rights

A photo of a laptop with a colourful screensaver. (Photo: Ales Nesetril / Unsplash)

Cisco is set to make its largest acquisition to date.

In a news release on Sept. 21, the tech giant announced that it has entered into a definitive agreement to acquire cybersecurity firm Splunk in an all-cash deal valued at US$28 billion.

“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” Cisco CEO Chuck Robbins said in the release.

“From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

Splunk CEO Gary Steele added that his employees “will benefit from even greater opportunities as we bring together two respected and purpose-driven organizations.”

The deal, which is still subject to regulatory approval and other customary closing conditions, is expected to close “by the end of the third quarter of calendar year 2024.”

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If the acquisition gets the green light, Steele will join Cisco’s executive leadership team — reporting to Robbins.

As Splunk prepares to come under new management, here are a few things that non-unionized employees in Canada need to be aware of.

Who pays severance if Cisco doesn’t want to keep certain Splunk employees?

If the sale of Splunk to Cisco results in you losing your job, then Splunk must provide you with full severance pay.

In Canada, the seller of the business is responsible for providing proper compensation to staff who lose their job.

WATCH: Employment lawyer Lior Samfiru explains the rights workers have when their employer sells the business on an episode of the Employment Law Show.

If Cisco provides you with an employment offer, and you have a good reason for why you don’t want to accept it (i.e. different hours or pay), you might be able to get full severance pay from Splunk.

Even without a good reason you can still get severance, but it’s very likely that you will only receive your minimum entitlements.

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How is severance pay calculated?

Severance for non-unionized employees in Canada can be as much as 24 months’ pay.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

The amount of compensation you are entitled to is calculated using several factors, including:

  • Age
  • Length of service
  • Position at the company
  • Ability to find new work

To figure out how much you could be owed, use our firm’s free Severance Pay Calculator. It has helped millions of Canadians determine their severance entitlements.

If your company doesn’t provide you with the correct amount, you have been wrongfully dismissed and should contact an experienced employment lawyer at Samfiru Tumarkin LLP immediately.

We regularly resolve wrongful dismissal claims and can help you secure proper severance.

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Can Cisco make major changes to the jobs of Splunk employees?

In Canada, non-unionized employees at Splunk don’t have to accept substantial changes to their job that Cisco might try to enforce.

Major modifications, such as a demotion, longer shifts, or reduced pay, are illegal.

When significant adjustments are made to the terms of your employment without your consent, there is a very good chance that you can treat it as a constructive dismissal.

In this situation, the law allows you to quit your job and pursue full severance pay.

If you believe that you have been constructively dismissed, don’t resign before contacting our firm.

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New employment contracts for Splunk staff

If you work for Splunk in Canada, and you receive a new employment contract from Cisco, take the time to carefully review it before signing it.

In many cases, these agreements take away key protections that would otherwise be available to non-unionized employees, including:

  • Eliminating past service: The new owner might attempt to reduce or eliminate your years of service with your previous employer. Don’t sacrifice your seniority. Length of service is a key factor when determining how much severance pay you are entitled to.
  • Reducing severance pay: Some employers try to use a termination clause to reduce your severance entitlements to the bare minimum. Instead of months of pay, you might only receive a few weeks’ pay if you are fired without cause or let go.
  • Ability to make changes: The new owner might attempt to add a clause that gives them the right to change aspects of your job (i.e. hours or pay) without your permission or lay you off without penalty.

Employers in Canada can’t legally force non-unionized workers to sign a new employment contract immediately or a few days after receiving it.

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Received a job offer? Speak with an employment lawyer

Before accepting a new employment contract, have the experienced employment law team at Samfiru Tumarkin LLP review the agreement to make sure your workplace rights are protected.

Our lawyers in Ontario, Alberta, and B.C. have successfully represented tens of thousands of non-unionized individuals.

We can help you better understand the terms of the contract and advise you on how best to navigate the situation.

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