Contrary to the popular notion, running a small business can be strenuous, especially if you have to do it alone. With a lot on your plate, it is easy to make legal mistakes that could cost your business a lot. This would have been understandable because you’re not a legal expert. Unfortunately, ignorance of the law won’t be an excuse before a judge. If you intend to start a business soon or own one already, get familiar with these common lawsuits that small businesses face so that you can avoid them.
Premises Liability Suit
As a business owner, you owe a duty of care to the guests, customers, and pedestrians who enter your establishment. This liability imposed by the law means you can be liable for all actions and inactions that cause harm to individuals within your premises. It can be as little as someone tripping over a wet floor or your staff leaving hazardous machines lying around.
To avoid getting slammed with a lawsuit, install reasonable precautions on your premises. Examples include complying with building code requirements, using wet floor signs, and other cautionary signs that signal danger when necessary. We can’t provide an exhaustive list, but constantly watching out for things that could reasonably cause harm around you keeps the lawsuits away.
Unpaid Wages Suit
Being in a poor financial situation is typical for small business owners, but it will never justify unpaid wages. This is one of the most common cases small businesses face and can stem from paying below the minimum wage or outrightly not paying salaries. Overtime disputes and commissions can also be the bone of contention.
You should note that having an express contract on wage issues is not enough if the clauses are fundamentally exploitative. The best way to avoid wage-related lawsuits is to pay wages on time. You should also ensure your contracts are drafted fairly to protect your employees’ rights.
Discriminatory Interview Questions
Yes, you read that right. You can get sued for asking the wrong questions as a business owner in an interview, especially since most small businesses don’t have HR experts to vet the questions. In an inclusive world that strives to protect every one of all races, genders, religions, and orientations, there are questions you should not ask job candidates.
Although you can ask questions that border on these topics, you cannot reject a candidate because of certain characteristics—for example, asking a woman if she plans to get pregnant in the foreseeable future or inquiring if a person would choose their religious holiday over work. Be sensitive to diversity in your hiring process and get a second opinion on your list of questions if you can’t afford a Human Resource Personnel.
Workplace Harassment
It is necessary to create a safe and predator-free environment for your employees. Even if another employee committed the assault or harassment and not you, your business could still get sued because your negligence could have created an enabling environment for such acts.
Although you can’t monitor all activities going on in the workplace at all times, you can absolve your business of liability by setting clear guidelines that bar such acts. More importantly, you should intervene and investigate immediately if you get reports of harassment. Beyond that, seek recourse for the victim, punish the culprit, and cooperate with law enforcement agencies if necessary.
If you found this article helpful, you should immediately assess your business policies, activities, and workplace culture to ensure you’re on the safe side of the law. Don’t fall into the trap of thinking your business is too small to be sued.