You want your business to thrive starting on day one. But legal issues can crop up quickly and without notice. If you are not careful, these issues can slow down your company. In the worst-case scenario, they can force your business to shut down.
Despite your best efforts, legal problems can crop up against your business. These issues can be worrisome, but they can be mitigated. In fact, you can plan for common legal issues. This ensures that you can take the proper steps to guard against such problems.
Now, let’s look at five common legal issues your business can face and how to deal with them.
1. Licensing and Trademark Lawsuits
Business license requirements vary based on where your company is located, your industry, and other factors. If you ignore these requirements, you can face penalties.
Furthermore, your business may name or launch a product or service that was previously trademarked. In this scenario, you can face legal ramifications.
When it comes to licensing, be diligent. First, get in touch with local government agencies to find out what licenses your company needs. Apply for these licenses and pay the fees required to obtain them. In addition, keep your business licenses up to date.
Meanwhile, conduct research to learn about potential trademarks. If a company has named or launched a product or service similar to yours, plan accordingly.
2. Workplace Discrimination Claims
You want your workplace to foster diversity, equality, and inclusion. But there can be instances when workplace discrimination occurs. If an employee feels like he or she is the victim of discrimination at work, this individual may sue your company.
Be proactive to protect against workplace discrimination. Develop workplace policies that highlight your company’s approach to discrimination. These policies can explain how workers can identify signs of discrimination and what they should do to report it. They can describe the process to investigate a discrimination claim and how workers are penalized if they discriminate against their peers.
Implement a workplace discrimination training program as well. This program can be shared with new hires and veteran personnel alike. It can educate employees about workplace discrimination and the dangers associated with it. And the program allows workers to ask questions and share their concerns about workplace discrimination.
3. Employee Compensation Disputes
It is your company’s responsibility to pay your employees per the terms of a hiring agreement. If you fall behind on employee payments, your staff may stop working. At this point, you can be subject to legal penalties, too.
Establish clear terms for employee compensation. Verify each worker knows how much they will receive as part of their hiring agreement and how frequently he or she will get compensated. If an employee has compensation concerns or questions, encourage him or her to share them with you.
Moreover, make a plan to manage your business finances. You can leverage accounting software that lets you track employee compensation records and other financial data. Or, you can hire a bookkeeper or accountant who can help you keep your business finances in order.
4. Wrongful Termination Claims
An employee may believe he or she is contributing to your company. Although you have given this worker every opportunity to be successful, you find he or she consistently falls short of your company’s expectations. Thus, you may be ready to dismiss this worker. However, you need to take appropriate measures to do so. Otherwise, you may be sued for wrongful termination.
Before you fire an employee, go the extra mile to support him or her. Remember, it can be easier and more cost-effective to help an employee than face legal action as part of a wrongful termination suit.
If you find an employee is struggling, meet with him or her. Then, you and your employee can make a plan to help him or her improve their performance. From here, you and your worker can track performance results. If the worker becomes more productive and efficient than ever before, he or she can become a vital contributor to your team.
Comparatively, if the employee continues to miss the mark, you can let him or her go. You can also take solace in the fact that you did everything possible to help your worker succeed.
5. Failure to Comply with Security Breach Notification Laws
Cybercriminals want business data, and they work hard to obtain it. Companies of all sizes and across all industries can experience cyberattacks and data breaches. If your business’ data is exposed, you need to notify anyone who may be affected. Because if you fail to do so, several problems can arise.
First, failure to disclose a data breach can result in compliance violations. At the same time, your employees and customers are unlikely to trust your brand if you do not keep them up to date regarding a breach. This can lead to brand reputation damage and revenue losses.
Security breach notification laws are in effect across the United States. Learn these laws and find out how they apply to your business. By doing so, you can do what’s necessary to comply with security breach notification laws.
Also, do everything in your power to protect your company’s networks and systems against cyberattacks. Remember, a cyberattack can occur at any time. If you remain diligent in your efforts to safeguard your business’ networks and systems, you can optimize your security posture. As a result, you can minimize the risk of data breaches.
Additional Tips to Protect Your Business Against Common Legal Issues
Your business has short- and long-term goals and wants to do everything possible to achieve them. Use the following tips to secure your company against a wide range of legal issues and position your brand to accomplish its aspirations.
1. Register Your Business
Complete all necessary legal forms to register your business. Oftentimes, it helps to partner with an attorney. This ensures you can receive legal guidance as you figure out what forms you need to fill out to get your company registered.
2. Use Written Agreements
Resist the urge to take people at their word when you run your business. Instead, request written agreements with employees, vendors, and other parties that support your company. These agreements should be easy to understand and include specific terms and phrases to eliminate misunderstandings that can ultimately lead to legal disputes.
3. Document Everything
Establish a system for documenting business activities. Verify business agreements are accessible at your convenience. Plus, track all client work and communications. You can even install video cameras outside your business location to ensure your property is safe.
4. Secure Your Data
Utilize security software across all business devices. The software should be patched and updated regularly. And teach your employees how to identify and respond to cyberattacks. Implement a cybersecurity awareness training program, and your workers can learn about cyberattacks and how to guard against them.
5. Be Persistent
Stay in the loop regarding any legal issues that could affect your business. Get out in front of these issues and consider ways to avoid them or minimize their impact. If you remain persistent, you can reduce or eliminate legal problems before they escalate.
The Bottom Line on How to Protect Your Business Against Common Legal Issues
Operate your business in alignment with the law, every day, without exception. You can then protect your company against legal problems now and in the future.
Ainsley Lawrence is a writer who loves to talk about good health, balanced life, and better living through technology. She is frequently lost in a good book.
