Lawsuits and Small Businesses

October 12th, 2017 by Bunch & Brock

For small business owners, more often than not their business is their life. Through hard work they have developed a concept and put the effort into making an idea a reality. They have given hours of their time, their efforts and their work. For the businesses that have survived, it is generally because of the efforts of a small group of people determined not to fail. Because of this, they often offer advantages larger corporations cannot: specifically, with personalized customer service and care for their product. Unlike their brethren in larger corporations, small business owners generally aren’t far removed from the daily operations, but instead take a dual role of making the overall strategic decisions as well as handling day-to-day operations. This makes a small business not only accessible, but also personable.

But while many small businesses enjoy these advantages, there are many advantages larger corporations possess that the smaller businesses simply can’t compete with. Namely, large businesses often have their own legal departments. One of the largest dangers that can affect any business is a lawsuit, and while larger corporations often handle them in-house, for smaller businesses the investment of time and money may be backbreaking.

Most Common Suits

Each business is different, and as a result each has its own challenges. However, because of the basic similarities, almost all small businesses share common problems. Among them is vulnerability to lawsuits. According to The Balance, an online journal run by business experts, while there are several legal actions small businesses must protect against, some are more common than others.

Discrimination Suits

The first listed is employment discrimination and wrongful termination, which essentially suggest it is illegal to discriminate against individuals because of age, sex, religion, disabilities, color, national origin or pregnancy. It also requires men and women to receive the same wages for the same work. As The Balance points out, because many small businesses do not have human resource departments, much less legal departments, it is extra important to remain vigilant about not only federal laws but also state and local statutes.

Discrimination Against Customers

These suits don’t always relate to employers and employees: The Balance suggests that it is also illegal to discriminate against customers for any of the same reasons. It is vital that not only the owner or owners stay up-to-date on laws, but also ensure that their employees understand what is required under the law.

Wage Discrimination

The third most common suit brought against small businesses involves wage discrimination. These laws incorporate not only the minimum wage, but also child labor, record-keeping and overtime. Because small business owners often do their own payroll, it is potentially an easy mistake to misclassify an employee and make errors that may seem insignificant but be large infractions of the law.

Torts

The next most common suit is based on torts. There are two basic types – negligence and property damage. If someone is injured because of a business’s negligence, whether it be a slip and fall injury or something worse, the business may be liable for damages. The same is true if, even inadvertently, a business causes property damage. Generally, a business’s liability insurance will cover many of these claims.

Breach of Contract

Finally, the fifth most common suit involves breach of contract. For example, if a contract is signed but not completed, the party that breaches the contract may be liable.

One of the most important actions a small business can take to avoid suits is consulting an attorney. An attorney will be indispensable because they have familiarity with the current law and, in the event a suit is filed, will be able to offer a defense and means to potentially remedy the situation.

Practicing for more than 35 years out of offices in Lexington, Ky., the attorneys at Bunch & Brock, Attorneys at Law, have the experience, knowledge and resources to help with all of your legal needs. If you have legal questions or would like to set up an appointment, contact us online or call us today at 859.254.5522.