Scholastic buying 9 Story Media Group for $186M: Employee rights

Two major creators of children’s content are joining forces.

In a recent news release, Scholastic announced that it has entered into a definitive agreement to purchase Toronto-based 9 Story Media Group (9 Story) for approximately US$186 million.

While Scholastic will acquire 100 per cent economic interest in 9 Story, it will only have two seats on the company’s board of directors — keeping majority control in Canada.

“This highly strategic combination, adding 9 Story’s industry-leading capabilities with Scholastic’s trusted brand and proven ability to create iconic children’s series and franchises, has tremendous potential to build deeper connections with young people through our stories, as the pages of our books come to life on screens and through merchandising,” Peter Warwick, president and CEO of Scholastic, said in the release.

“We are thrilled to build upon our more than 20-year relationship with 9 Story’s exceptional management team and employees, whose culture and values could not be better aligned with our own.”

9 Story’s award-winning animation studio, Brown Bag Films, had produced a variety of well-known children’s programming, including Daniel Tiger’s Neighbourhood, Arthur, Karma’s World, and The Magic School Bus Rides Again.

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Scholastic expects the deal to close in the first quarter of its 2025 fiscal year, which begins on June 1, 2024.

According to news outlets, including The Globe and Mail, the purchase is the company’s largest acquisition since it bought encyclopedia publisher Grolier for US$400 million in 2000.

As 9 Story prepares to join the Scholastic family, here are a few things that non-unionized employees in Canada need to be aware of.

Who pays severance if Scholastic doesn’t keep certain employees at 9 Story Media Group?

If Scholastic’s acquisition of 9 Story Media Group results in you losing your job, then 9 Story Media Group 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 Scholastic 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 9 Story Media Group.

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

LEARN MORE
• Sale of business in Ontario: Rights to severance
• Rights to severance in Alberta when your employer sells the business
• Employer sold the business in B.C.? Know your rights to severance

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:

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.

LEARN MORE
• Severance pay for provincially regulated employees
• Severance packages in mass layoffs
• Rights to severance during a recession

Can Scholastic make major changes to the jobs of workers at 9 Story Media Group?

In Canada, non-unionized employees at 9 Story Media Group don’t have to accept substantial changes to their job that Scholastic 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.

ADDITIONAL RESOURCES
• Can my employer make changes to my job in Ontario?
• Job changes in Alberta: What employees need to know
• Changes to your employment in B.C.: Your rights

New employment contracts for staff at 9 Story Media Group

If you work for 9 Story Media Group, and you receive a new employment contract from Scholastic, 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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Do staff at 9 Story Media Group have the same workplace rights with a non-Canadian owner?

The short answer is yes. Companies outside of Canada can’t use employment contracts to get out of Canadian employment standards legislation.

While Scholastic is U.S.-based, the company still has to adhere to the same employment laws that 9 Story Media Group was required to follow for its Canadian staff.

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.