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Running a business frequently entails dealing with employees, partners, shareholders and customers. As a business owner, you may face disputes from any of the aforementioned parties. Numerous factors can result in business disputes. This includes delayed or missing payments, negligence, discrimination, employment issues, poor quality of product or service, and miscommunications.
It is vital to know the conflicts you may encounter beforehand to prevent them. The following are four business disputes that can lead to lawsuits.
Employment Disputes
You and your employee(s) may get into disputes due to work hours, wages, workload management, paid time off (PTO) or maternity leave, discrimination, and unlawful termination. You should treat your employees fairly to eliminate the chances of conflicts. For instance, ensure workers of the same rank and handling the same workload are paid equally.
Moreover, have a skilled supervisor to create a fair schedule for all employees. They should try to allocate equal work hours. Additionally, those who work more hours, depending on the shift, or overtime, should be paid accordingly.
Furthermore, you need to have clear terms and conditions regarding maternity leave, PTO, vacation, and sick days in your employment contracts or employment manuals. This will save you from disagreements in the future.
Moreover, your company should have anti-discrimination rules that everyone must follow. Anyone who is discriminated against should be protected.
It is also vital to avoid dismissing workers without valid reasons. Additionally, systems should be put in place to correct problems, giving employees a chance to reform by offering needed training. If the problem persists, offer them advance notice of dismissal. This can protect you from wrongful termination lawsuits.
Partnership Disputes
If you co-own or operate your business with a partner(s), disputes can arise from unclear contract terms. Partners can also disagree on what’s best for the company. Issues like purchasing assets, hiring more talent, handling finances, or choosing suppliers, can create conflicts.
You should consider having an agreement, scrutinized by a lawyer before going into a business partnership with anyone. In addition, be open-minded to your prospective partner’s terms. Your contracts should also have guidelines for handling a breach of contract.
Shareholder Disputes
If your company has shareholders, disputes can occur due to unfair pay of dividends, discrimination against minority shareholders, lack of communication and unequal voting rights. Even though shareholders should always put a company’s interest first, any factor that affects the value of their shares can lead to a conflict.
Therefore, create clear and fair agreements that each shareholder will follow. The contracts should also state what would happen if one leaves. For instance, document how they can or cannot use the company’s intellectual property rights. Working closely with an attorney when creating such an agreement is beneficial.
Moreover, ensure that every member is informed of a meeting before holding one. If one is not able to attend, they should receive the minutes.
Customer Disputes
Businesses have a duty to provide customers with standard policies and procedures, an absence of which can lead to disputes. Causes of customer disputes include substandard products or services, poor customer service, hidden fees, false claims, negligence and not keeping promises.
If your client experiences any of these factors, they may report the issue to your management. However, if not resolved or unfair compensation is offered, they may file a lawsuit against you.
The above-discussed dispute types can occur in start-up and established businesses. You can avoid them by creating contracts, communicating effectively with involved parties, and offering top-notch products and services. Nonetheless, it is essential to have dispute resolution approaches. You should also work with a lawyer to avoid costly lawsuits.
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