Running Your Own Business? Legal Issues You Might Encounter and How To Deal With Them

Tommy Wyher — November 22, 2016

Running your own business can be one of the most rewarding venture a person can take part in. Not only is it financially rewarding if it is a success but it also gives the owner a sense of self-satisfaction due to creating something that outgrew their wildest expectations. There are some negatives about running your own business though including that work never stops unless you have a competent person in command while you are on vacation. Another drawback is that business owners are often taken to court and have to deal with legal issues quite frequently. The following are issues that you might encounter as an owner of a business and how to deal with them in an effective manner.

Sexual Harassment

Sexual harassment has not been eradicated from the workplace by any means. In some male dominated industries it is rampant with many people scared to approach HR with any concerns. For no reason should another person be made to feel uncomfortable when they are in their place of work due to the actions or words of another employee. Not only is this wrong but it can impact the quality of work that the employee is producing.

How To Deal With This:

• An explicit sexual harassment policy should be created by the HR staff. The employees should take part in a training that outlines the expectations of this policy. An excuse that many people use when accused of harassment is that of pleading ignorance, this training will thwart this excuse.

• The HR department needs to have anonymity for those who feel like they have been harassed. Those who harass people often do it to more than one party so they will not be able to figure it out.

• No harassment should go unpunished and an employee must be written up if the claims end up being true. A paper trail is the best way to help a legal case if an employee feels like not enough was done.

• Regardless of how productive or well-liked an employee is they need to be reprimanded. This is where many companies run into trouble as they do not want to write up or fire someone that has incredible numbers.

Wrongful Termination

There are some employers that feel if they treat their employees fairly that they will never have a wrongful termination lawsuit brought upon them. There is nothing worse than an employee who was rightfully terminated that just wants to ruffle some feathers. This can cost a small business quite a bit of company in legal representation if the proper methods weren’t used to terminate this person. The person could state that they were fired for a political, racial, or gender related reason.

What You Can Do To Protect The Company:

• The most important thing you can do is to document everything. From emails telling the employee to boost their production to sit down meetings with the employee. This is why it is important to send a follow up email after each meeting that has to be confirmed with a response from the employee. This eliminates the chances of the employee saying they didn’t understand what was being said in the meeting.
  
• Keep the terminations to the HR department as a hot tempered manager could say or do something that leaves the company in hot water.
  
• Writing people up then having the employee sign the write up is quite important. This is even more concrete than emails as having a witness to the employee signing this is also important.
  
• When the termination occurs it is important to stop any conversation that becomes hostile. Some people will beg while others will get aggressive. Either way terminate the conversation and ask the person to leave as what had to be said was said.

Fraud

Fraud is an extremely difficult thing to prove as you have to prove someone was lying with intent. Most of the time that someone brings about an accusation of fraud they have something to gain from it being confirmed. This can leave a business owner in financial ruin, their name drug through the mud, and their company’s reputation ruined.

How To Prevent Fraud:

• Choosing investors wisely couldn’t be more important as some fraud cases have to do with investors accusing a company of lying. For example, the Purechoice CEO Bryan Reichel had been accused and charged with fraud. The investors accusing this stood to make quite a bit of lost money back. Research your investors because if you lose their money, accusations could come flying.

• Document everything you have told to investors or to the board. This can be done via recording or even video tape. Nothing can clear your name better than a video with the accusers in the room stating the opposite of what they are.

• Be as transparent as you can as a misconstrued statement can come back to bite you. The right legal representation throughout investor relations can help eliminate any type of fraud allegation.

The business world can be cruel and unfair. It is important to take the proactive approach against legal issues to prevent any type of problem. Do not be the company scrambling around once a case is brought up, cover all of your bases to make sure you keep your company in optimum operating condition!

(34)