The longer you own and operate a business, the more likely it is that you will run into business disputes. Conflict might emerge between you and another company, such as a supplier, or it could even arise between you and another owner or partner in your business. No matter the origin of the dispute, your ultimate goal is a cost-effective resolution that puts the issue to rest once and for all so you can focus on running your company.
We share the same objective here at SederLaw. If you have a business dispute, or one is threatening your company, it’s time to talk to our knowledgeable Business & Corporate Law attorneys.
Business Disputes You May Encounter
A seemingly minor disagreement or misunderstanding can suddenly bloom into a conflict that may, in turn, lead to a lawsuit. As your business hires more employees and does more work, the risk of this happening will increase. These are some business disputes our law firm regularly handles:
Breach of Contract
Alleged breaches of contracts are among the most common types of business disputes. To prove a breach of contract in Massachusetts, a party must prove the following four elements:
- The existence of a valid contract. This is usually not in dispute between the parties. But in the event it is, the party alleging the breach must show there was an offer, acceptance, and consideration (something of value exchanged between the parties).
- The complaining party either performed under the contract or had reason not to. The party alleging the breach must show it did what it agreed to do under the contract. Alternatively, the party can show it had a legitimate reason to not perform or not perform fully.
- The breaching party (defendant) failed to perform. This is the essence of the breach itself, and usually the most contested element at issue. If the defendant failed to perform as agreed to, the court may view it as a breach.
- The breach resulted in damages. Finally, the complaining party must show that it suffered losses because of the defendant’s breach. Damages are generally monetary in nature and may include attorney’s fees and court costs as well.
For some companies, the business dispute arises from within. A current, departing, or former employee may file a lawsuit against your company. The lawsuit may allege
- Discrimination and harassment
- Hostile work environment
- Wage and labor complaints (e.g. failure to pay overtime)
- Wrongful termination claims
- Whistleblower and unlawful retaliation lawsuits
- Breach of employment contracts
- Non-disclosure, non-compete, and breach of confidentiality
- Lawsuits alleging violations of state and federal law
Defending against these allegations can be challenging, but one potential way to do so is to prove that your company implemented and enforced certain policies. This can especially come in handy in lawsuits alleging there was a hostile work environment. A defendant company may also be able to use this fact to mitigate damages.
Partnership and Shareholder Business Disputes
Business partners don’t always agree on how to run the company. If a dispute is allowed to persist, the partnership could ultimately break down. Retaining legal representation at the initial stages of a conflict is essential to protect your interest in the partnership.
Partners are required to observe certain fiduciary duties such as loyalty to the partnership and good faith toward one another. They are not allowed to take for themselves business opportunities that could be enjoyed by the partnership. Nor can they misappropriate partnership assets, such as intellectual property, for their personal gain.
Shareholder disputes are similar to partnership disputes. Shareholders may not like how the corporation or company is being operated and might decide to file a lawsuit. These issues are often, but not always, seen in family-owned businesses and closely-held corporations. Many of the same issues that lead to partnership disputes cause shareholder conflict, along with these:
- Financial disputes, such as questions about returns on investment
- Fraud, embezzlement, and misappropriation of company assets
- Disagreements over hiring and employment decisions
- Shareholder oppression claims
Intellectual Property Issues
Companies may own a number of intellectual properties, including patents, trademarks, copyrights, and trade secrets. If a competitor or some other party is infringing upon your intellectual property, you could lose substantial revenue and see your company’s brand diminished. On the other hand, your business could be the one targeted in one of these disputes.
Intellectual property law issues usually implicate federal protections, such as those provided by the U.S. Patent and Trademark Office. However, state law may also have a bearing on these allegations. For example, trade secrets are protected by Massachusetts statute.
In some cases, the offending party is a current or former employee who has misappropriated the company’s intellectual property rights. At a minimum, your employees should be required to sign non-disclosure and related agreements that prohibit them from misusing this information. This won’t always prevent a dispute but can go a long way in protecting your intellectual property rights.
How We Handle Business Disputes
These and other business disputes could ultimately result in a lawsuit. However, litigation is not a foregone conclusion, nor does a lawsuit already filed have to be decided in court. Litigation is but one facet of how SederLaw handles these matters, along with:
- Risk mitigation: identifying risks to your company and addressing them in a positive way, often by adopting policies and procedures to minimize the risk of a lawsuit
- Internal dispute resolution: handling conflicts discreetly and internally, in a way that prevents issues from becoming public
- Alternative dispute resolution (ADR): involves an outside third party, such as a mediator or arbitrator, who can either facilitate productive negotiations or decide the matter through binding or non-binding arbitration
Contact Our Worcester Business Disputes Attorney
No matter the nature of your business dispute, you need committed legal counsel that is familiar with the issues at stake and understands what you have to lose. SederLaw is ready to help. Contact us today to schedule your confidential consultation.