Five Common Legal Issues Faced by Businesses

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As an owner of a small business, the danger of crippling litigation should also be at the top of your priorities. Legal headaches, especially in America can take you by surprise and severely hurt your business’ bottom line. Here are some of the most common legal issues facing small businesses in America.

Disgruntled Employees

As a business owner, this will be one of the most common legal headaches. In America, employees have far more rights than other countries, in the form of unions and reasons for “wrongful termination”. If you terminate a non-performing employee, make sure he or she signs documents carefully drafted by an attorney upon termination to make the terms of dismissal crystal clear. Letting an employee go without any final termination forms leaves the door wide open for legal actions.

Discrimination/Harassment Cases

The legal ramifications of alleged discrimination – sexual, ethnic, age or otherwise, can cause your company serious problems. Make sure your human resources and legal departments are well equipped to handle these issues should they arise. During the hiring process, make sure you are prepared with all the applicants’ resumes should allegations of discrimination arise, to prove that you hire the most qualified individuals, regardless of gender, ethnicity or age.

Hold regular meetings to oversee co-worker relations and insure that discrimination on a smaller scale is not occurring between office cliques, or influencing the decisions of middle and lower managers.

Harassment – sexual, racist or otherwise – can be a serious problem in an integrated workplace with workers from various ethnic and religious backgrounds and social classes. Regular meetings and interviews with staff will allow your managers to police these transgressions, which should be eliminated quickly through the swift termination of offenders.

Victims of harassment and discrimination tend to attract lots of media attention, which can hurt your company’s public image as well as drain your legal budget. Be proactive and stomp out these problems before they start.

Immigration Audits

You should make sure that all your company’s employees can legally work in the United States. Do top down sweeps off your company’s staff, using background checks, to identify illegal immigrants with falsified documents. The U.S. government has been known to conduct extensive surprise immigration audits that can cripple a company if it is found to be using illegal labor.

Copyright and Patent Issues

Cutting edge companies in the tech industry often face aggressive patent litigation. Companies often sit on patents for years, hoping that another company inadvertently violates them, to get easy money through patent and copyright lawsuits.

In the product development phase at your company, make sure your research and development teams thoroughly research the patents and copyrights of your current product, to avoid a messy legal battle should you step on a competitor’s toes.

Dissatisfied Customers

Customers who are dissatisfied can file class action lawsuits against your company, in which they gather in large consumer groups and attack your company over faulty products, services or promises. With enough dissatisfied customers, class action lawsuits can do more damage than any individual or corporation and irreparably tarnish your brand’s image.

Again, be proactive and keep a finger to the pulse of your customers through tech support, online message boards and e-mails. Promptly issue recalls for flawed products and be prompt to address customer issues.

Other Legal Issues

These are only some of the most common legal issues facing small businesses today. Other ones include tax litigation (a whole other topic) and legal disputes with competitors and contractors. Make sure you are proactive in solving these problems before they start, and make sure you have a solid legal team to back you up should you get sued. Good communication in the workplace and a hands-on approach to management is the best deterrent to legal issues.

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