Every year, there are over 100 million trial cases in the state trial courts. Millions of cases are filed against businesses, with at least 12 million of such cases being filed against small businesses alone. Businesses get into legal troubles because they fail to account for the consequences of their actions, or they fail to plan for the worst-case scenario. To understand why businesses get into legal troubles, it’s vital to understand what a business is.
A business is an entity that provides goods and/or services in exchange for money. When a business provides goods and/or services, it does so with the expectation that it will gain profit by doing so. This profit can come in many forms like increased revenue, reduced costs, or even just covering expenses. Businesses that fail to make a profit are unlikely to survive very long in the marketplace.
Most businesses get into legal trouble because of operating or making profits unlawfully, deceiving their customers, creating products or services that harm others or the environment, etc. Having said all that, let us look into four legal problems businesses must avoid getting involved in.
#1 Copyright Infringement
Copyright law covers works of authorship fixed in a tangible medium such as a book or website. Copyright law protects original works of authorship like literary, dramatic, musical, and artistic works. Copyright protection extends to original works of authorship like software, music recordings, video recordings, books, paintings, drawings, sculptures, and other fine arts.
Copyright owners have the exclusive right to reproduce their work or prepare derivative works from them. However, if a business or an individual does the same without owning that property, they are violating legal boundaries.
On average, 12,000 copyright cases are filed in the U.S. every year. While violating copyright laws will lead to fines and other forms of legal troubles, it will also cause you and your business to lose face in the public eyes. No one likes a business that steals or misappropriates others’ work. People avoid buying or working with such businesses as they gradually develop a bad name for themselves in the business world.
#2 Dispute Between Business Partners
Disputes between business partners can be devastating to the company. If you have a partner or even a small group of partners, you need to make sure that everyone is on the same page and understands their rights, responsibilities, and obligations in the company. If not, one person can take advantage of another by withholding funds or using their position in power to bully another partner into making decisions that are not fair or ethical.
If there is a dispute between partners, both parties must seek representation from attorneys who specialize in business law. It’s also important that both sides work together to come to an agreement as quickly as possible so that no further harm can be done.
However, coming to an agreement is not always an option. More often than not, the matter turns into a legal dispute where one or more partners sue the others. Such legal matters can bring down company profits. It can also lead to falling share prices which is even more detrimental to the company.
#3 Failing to Prevent Environmental Damage
In the United States, environmental laws protect people and the environment. Failing to prevent environmental damage can result in dire consequences for businesses.
The Environmental Protection Agency (EPA) enforces environmental laws that require businesses to prevent pollution and contamination of air, water, and land. When a business fails to take proper precautions or follow regulations set by government agencies, it may be fined or have its license suspended or revoked.
For example, if a company does not properly dispose of hazardous waste materials, it could face charges for violating the Resource Conservation and Recovery Act (RCRA). The EPA monitors businesses that handle hazardous materials to ensure that they comply with federal law. They also inspect facilities that store waste materials, such as oil drums.
Ordinary citizens can sue you, too, for failing to prevent such damages. Studying the Camp Lejeune Water Contamination Settlement Amounts report will tell you how such actions are taken. The Camp Lejeune water contamination lawsuit is currently waiting for President Biden’s signature. Thanks to the lawyers who handled this case, the Camp Lejeune victims will be getting justice and compensation for the environmental and health damages they had to incur because of the negligence of many local businesses operating in that area.
#4 Discrimination and Harassment Within the Workplace
On average, there are between 10,000 and 15,000 cases filed for workplace harassment, and around 75,000 to 80,000 cases filed for workplace discrimination every year in the U.S.
Businesses must be careful to avoid discrimination and harassment within the workplace.
Discrimination is defined as treating a person or group of people differently from others because of their race, sex, national origin, disability, age, or religion. This includes decisions about hiring, firing, and promotions.
Harassment is behavior that creates a hostile working environment for an employee or group of employees. This can include sexual harassment (unwelcome sexual advances), racial or ethnic slurs, and unwelcome physical contact.
Nothing can be more disgraceful for a business than having to deal with such lawsuits within the company. When these matters come out to the public, not only will it lead to loss of business, but it will also mean that fewer people will be eager to work at your company.
So, for your business to run successfully, you must do whatever possible to avoid these legal problems at your workplace. You must maintain high standards for yourself and your employees. Otherwise, you might have to deal with these legal issues, ultimately harming your business and its overall image.