5 Common Legal Headaches Facing Small Businesses

5 Common Legal Headaches Facing Small Businesses

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There are over 27.9 million small businesses registered in the United States, each offering their own distinct goods and services. But these small businesses each have to confront a similar issue: legal. Here are 5 common legal headaches facing small businesses.

1. Personal Injury Litigation.  Someone walks in your store, trips and falls, and claims that you had water on your floor.  Someone eats your food and gets sick. Or someone uses your product and develops a rash or gets burned. These type of personal injuries can result in litigation. If unsuccessful, a hefty verdict or judgment can be obtained against your business. A small business should always be mindful of potential litigation and constantly work on ways to prevent personal injury from occurring through the use of their products or services.

2. Employees Seeking Revenge. Small businesses hire and fire employees all of the time. Out of anger, a fired employee can seek revenge against the business in the form of a wrongful termination or discrimination lawsuit. If these lawsuits capture media interest, it can bring the wrong type of publicity and interest to your business. A small business can protect itself from the revenge-minded employee by explaining the reasons for the dismissal in writing, and even having the employee sign a carefully worded severance agreement.

3. Hiring Illegal Immigrants. Desperate times call for desperate measures and some employees will do anything to get a job, including lying about their citizenship or submitting falsified work visas. To avoid hiring an illegal immigrant, a small business should speak to each potential employee’s references and perform background checks.

4. Paying Improper Wages and Overtime. The demands of business such as keeping overhead costs low can lead to small businesses finding cheap labor. However, cheap labor can become costly in the form of unpaid wage and overtime lawsuits if you are not paying or are underpaying your employees. The current
federal minimum wage is $7.25 an hour and some states have enacted laws with different minimum wages. Any hours worked over 40 are considered overtime. Making sure that employees keep timesheets can help you track whether regular or overtime wages should be paid.

5.  Unauthorized Use Of Trademarks and Patents. A small business can face an infringement lawsuit if they use another company’s trademarked logo or uses another company’s patented system or design without the company’s permission. Often times, small businesses may not know that they are infringing on another company’s trademark or patent until they receive a cease and desist letter or are served with a complaint. Careful and comprehensive research of potential patents or trademarks on the logo you plan on using or the product you will be offering can prevent infringement lawsuits.

If a small business is proactive and addresses these common legal headaches before they become fully blown problems, then the business has a better chance to avoid these business killers and focus on what matters most in business: job creation and growth.

This free article is brought to you by LawChamps, a new and innovative way to get you matched with attorneys who can handle your legal needs.



This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.
 
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