ToList().ForEach in Linq

employees.ToList().ForEach(
     emp=>
     {
          collection.AddRange(emp.Departments);
          emp.Departments.ToList().ForEach(u=>u.SomeProperty = null);
     });

As xanatos said, this is a misuse of ForEach.

If you are going to use linq to handle this, I would do it like this:

var departments = employees.SelectMany(x => x.Departments);
foreach (var item in departments)
{
    item.SomeProperty = null;
}
collection.AddRange(departments);

However, the Loop approach is more readable and therefore more maintainable.

You shouldn't use ForEach in that way. Read Lippert's “foreach” vs “ForEach”

If you want to be cruel with yourself (and the world), at least don't create useless List

employees.All(p => {
    collection.AddRange(p.Departments);
    p.Departments.All(u => { u.SomeProperty = null; return true; } );
    return true;
});

Note that the result of the All expression is a bool value that we are discarding (we are using it only because it "cycles" all the elements)

I'll repeat. You shouldn't use ForEach to change objects. LINQ should be used in a "functional" way (you can create new objects but you can't change old objects nor you can create side-effects). And what you are writing is creating so many useless List only to gain two lines of code...