Avoiding Common Lawsuits That Affect Small Businesses

Research shows that legal battles cumulatively cost U.S. small businesses over $100 billion every year. Having a lawsuit brought against your small business can result in crippling legal costs and serious damage to your business’s good reputation. One of the best way to avoid being the subject of a lawsuit is to take steps to ensure that your business always remains compliant with current state and federal law. As a qualified business lawyer, I can help you minimize the risk of employment disputes as much as possible.  

Lawsuits Faced by Small Businesses

There are many different types of lawsuits that could be filed against your company, and it is impossible to list all of them. Some suits, however, are much more common than others are, including:

• Discrimination lawsuits: Title VII of the Civil Rights Act, the Americans with Disabilities Act, and many other state and federal laws prohibit employers from discriminating against workers. Small businesses may be especially vulnerable to employment-related lawsuits because many do not have a human resources professional or have only a small amount of resources dedicated to human resource concerns. Having an employee handbook that clearly explains business practices, rules, and disciplinary procedures can help protect your business against allegations of wrongful termination, harassment, or discrimination.
• Wage law violations: Small business owners should also ensure that they are carefully abiding by federal, state, and local wage laws. Misclassifying workers as independent contractors is one major mistake that many small business owners fall victim to that can result in lawsuits. As an employer, you should have a written policy concerning wages, procedures for tracking time, breaks, meals, and overtime. You should also make sure your managers fully understand the policies and are not asking employees to perform work “off-the-clock.”
• Intellectual property disputes: When trademarked, copyrighted or patented products are used improperly or without the owner’s permission, major intellectual property disputes can result. Something as simple as using an image from the internet as your company logo can result in accusations of intellectual property theft. Case in point: even the graphic that accompanies this blog has been properly licensed and paid for so that there are no concerns about the misuse of intellectual property.
• Breach of contract: Small businesses often utilize business contracts, independent contractor agreements, nondisclosure agreements, service contracts, non-compete agreements, and employment agreements to formalize business deals. The language used in these agreements should be chosen very carefully. When a business does not follow through on the terms of a contract, even unintentionally, it may be vulnerable to a breach of contract lawsuit. Having a lawyer help draft and review business contracts is essential to minimizing the chances of being accused of breach of contract.

Contact a Member of Our Team

Preventing a lawsuit is always preferable to dealing with a lawsuit once it has been brought against your business. To ensure that you are taking every step possible to reduce the risk of being the subject of a discrimination claim, breach of contract claim, or other legal action, speak with an experienced Naperville business lawyer at the Gierach Law Firm. Call 630-756-1160 for a confidential consultation today.  

Sources:

American Express

The Balance Small Business