The legal issues small business can learn from the big companies

Running a business has its ups and downs. When you’re up – making money, thriving and developing new markets – you’re in the best place you can be as an entrepreneur. When you’re down, however, you need to tackle the issues giving you problems head on. Often it’s not a downturn in the economy that can affect your business but legal difficulties that need to be understood and dealt with before they get out of control. After all, your bottom line is at stake.

Big companies can point the way

As a small business, you can find yourself potentially liable for many perceived or real legal infringements. Large companies work hard to protect themselves from the consequences of legal action, putting in policy frameworks that all employees need to understand and agree to. It doesn’t make them immune from legal action, but it can help mitigate possible problems.

If you take a leaf out of their book, you can head off legal issues before they get to the stage where they can seriously damage your business. Here are a few common issues you should prepare for.

Patent and copyright issues

This is particularly relevant to the tech industry because some companies sit on patents for years hoping that their patent will be violated somewhere down the line by another cutting-edge company. If that happens, they can often pick up easy money through copyright and patent lawsuits.

If you’re in the tech business, make sure that your teams in research and development thoroughly investigate the copyrights and patents of the products you are developing. If you appear to breach a competitor’s patent or copyright, you could find yourself involved in a messy legal battle. Preparation and knowledge are the keys to avoiding this.

Unhappy employees

You’re never going to make all of your employees happy all of the time, but you can put policies in place that encourage commitment to the work and incentives to develop loyalty. However, sometimes you have to bite the bullet and terminate someone’s employment. The US has many rights to protect workers, so you need to be aware of the potential of being accused of wrongful termination. If an employee is not performing to the requirements set out in the initial contract, you can terminate the employment. Ensure the terms of dismissal are absolutely clear, and get your attorney to draft documents to be signed that leave no room for maneuvering.

Immigration audits

Big companies have so many employees that it can be difficult for them to check on who is or is not eligible to work for them in terms of immigration status. There are certainly companies that don’t ask enough questions because it’s cheaper in terms of payroll to employ illegals, but that policy can have a nasty sting in the tail. Aggressive immigration audits that expose wrongdoing by a company can have a major effect, including lawsuits and fines that can be financially crippling. Always perform a top-down sweep of the staff you have working for you, carry out background checks, and identify falsified documents used by illegal immigrants. It’s your responsibility to do this so you don’t get caught out by poor hiring procedures.

Personal injury

Make sure your health and safety policies are constantly kept up to date and that all employees understand their own responsibilities, whether on the shop floor or in the office. Personal injury claims can be expensive to defend so always try to minimize the possibility of a claim being made.

Harassment and discrimination

Your legal and human resources departments need to be equipped to deal with legal ramifications when an employee alleges discrimination. You must be able to prove that you hire the individuals who are most qualified regardless of gender, age, ethnicity or other categories, such as sexual orientation.

Regular meetings are useful to check how coworker relationships are going. Small-scale discrimination can be rooted out if you are aware of the potential problems bubbling under the surface. Integrated workplaces have employees from a range of religious and ethnic backgrounds and from different social classes, so managers need to be aware of these and look at whether harassment is occurring, whether it is sexual, racist or another area of concern. Bullying should be taken very seriously because you could become liable to expensive litigation if it is not challenged and dealt with.

Be prepared

Large companies have carefully designed procedures to help deal with or prevent legal challenges. Your small business can learn from this and put policies in place that can handle those tricky legal problems so you can concentrate on developing and making your business highly successful.