A recent decision by the Seventh Circuit Court of Appeals (Teed v. Thomas & Betts Power Solutions,L.L.C.) held that even though the defendant , a purchaser of the assets only of an alleged bankrupt company , claimed to be exempt from FLSA liabilities alleged against the seller company, the court found that the purchaser could not escape liability based upon the asset purchase agreement. Judge Posner stated that “…we suggest that successor liability is appropriate in suits to enforce federal labor or employment laws-even when the successor disclaimed liability when it acquired the assets in question-unless there are good reasons to withhold liability”. The court gave some examples of “good reason”, such as: the successor lacking any notice of potential liability, or when there has been a flurry of frivolous lawsuits just before a bankruptcy filing, in hopes of substituting a solvent successor. In Teed, the court found no such exceptions. Therefore, the lesson here for potential purchasers of the assets of another company, is that they should engage employment attorneys to perform a detailed due diligence of potential employment liabilities as a contingency to closing the purchase deal. Otherwise, the successor/purchaser may buy more than they bargained for in the asset purchase.