Top 5 Business Disputes That Lead to Litigation
Whether your business is a large company or a small, family-owned operation, all business owners should make every effort to avoid litigation. Filing a lawsuit is not only expensive, but it is also exhausting for you and your employees. Being involved in litigation takes away your time and attention from running your business, and it is usually quite stressful.
Below are the five most common areas where businesses find themselves involved in legal disputes:
Disputes Between Partners/Owners
Most businesses are started and owned by more than one individual. While it is important to share the workload, especially with somebody who possesses skills or talents you do not, having a partner can also be difficult when you have disagreements. Whether you have differing visions of where the company should be headed, or you are fighting over sharing the profits from the business (or worse, how to pay the bills if the business fails), many times the only way to resolve the dispute is through mediation, arbitration or litigation. Attempting to mediate or arbitrate a partnership dispute is preferable since the proceedings are confidential and private. However, if the partners are being highly contentious and refuse to meet each other part way, a trial may be necessary.
Employer/Employee Disputes
Business owners must take careful measures to avoid claims by employees. Time and money invested in avoiding employee lawsuits before you even hire your first employee can save you significant sums in the end. In other words, hire an attorney to create an employee handbook and ensure that you comply with the laws protecting employees. Employees are protected by a wide variety of state and federal laws, which also means your employees can file a lawsuit if any of these rights are violated. Common examples of lawsuits filed by employees are claims of discrimination, wage disputes, unlawful termination, OSHA violations, unemployment compensation, overtime issues, and many more.
Shareholder Disputes
If your company has shareholders, senior management and your Board of Directors have a fiduciary duty to act in the best interests of the shareholders. It is common for shareholders to file lawsuits claiming that the company’s decision-makers are taking actions that negatively impact the business’s profitability, or that the business is being mismanaged.
Contract Disputes
Contracts are a necessary part of conducting any type of business. However, it is all too common for one of the parties to a contract to stop complying with the terms of the agreement. In other words, one party “breaches” the contract. A breach can be anything from failing to meet a deadline, refusing to pay an amount due, or any other number of obligations that are outlined in the contract. A seemingly simple breach of contract can often have disastrous consequences for the non-breaching party. An experienced business litigation attorney can help obtain relief, as well as assist in calculating all the damages you may be entitled to recover in a lawsuit.
Disputes with Customers
If your business deals with the public, it may be open to lawsuits for claims of defective products, fraud, or other prohibited activities. These types of lawsuits can snowball quickly and damage your company significantly. Before your reputation is harmed by this type of litigation, your company should seek the assistance of an experienced business attorney who can assist in resolving the dispute as quickly and privately as possible. Whatever your legal needs may be, The Nice Law Firm, LLP can offer you advice and tailored solutions that contribute to the security and exemplary performance of your company.
