Lawsuits are frequently filed against businesses, often by employees but also by customers, business associates, or other parties. The five types of lawsuits most often encountered in the business world are:
Employment Discrimination and Wrongful Termination
This is a broad category and covers many allegations ranging from discrimination and harassment to retaliation and, ultimately, wrongful termination.
If you receive a lawsuit filed by an employee for any of these reasons, contact a Corpus Christi Business Law practitioner for legal advice and representation.
Employees are legally protected from discrimination in numerous ways.
- Equal pay for men and women is assured by the Equal Pay Act.
- Age discrimination is prohibited by the Age Discrimination in Employment Act.
- Sex, race, religion, color, and national origin discrimination are barred by the Civil Rights Act, Title VII.
- People with disabilities are protected by Title 1 of the Americans with Disabilities Act.
- Pregnancy discrimination is prohibited by the Pregnancy Discrimination Act.
You will likely see one or more of these acts referenced in any discrimination lawsuits.
Although you might feel the allegations are untrue, refer the matter to your attorney at once and make yourself available to assist in resolving the situation.
Keep in mind that these acts apply not only to current employees but to applicants as well.
Harassment and retaliation are also forms of discrimination.
Harassment is unwelcome conduct by a supervisor or co-worker that is related to the person’s sex, race, religion, color, national origin, pregnancy status, age or disability.
All of the acts mentioned previously would apply to a harassment lawsuit.
Retaliation is a punitive action against an employee who has filed a complaint or lawsuit alleging discrimination.
The actions could be harassment, demotion or even dismissal.
Wrongful termination, the act of firing someone for an illegal reason, is somewhat of a compilation of the other forms of discrimination.
It is illegal to fire someone because of their sex, race, religion, color, national origin, age, pregnancy, disability, or as a retaliatory act.
To be fired for any of these reasons is a violation of the federal anti-discrimination laws.
All businesses are vulnerable to discrimination-related lawsuits.
However, small businesses without formal human resource departments should pay close attention to ensure that none of the applicable laws is violated, even unintentionally.
Discrimination Suits Not Based on Employment
Not all discrimination suits filed against a business are brought by employees.
For example, recently, in Baltimore, MD, a nine-year-old Black boy and his mother were refused service at a restaurant because the child was wearing athletic shorts.
However, a young white boy wearing very similar clothing had apparently been served and was exiting the restaurant with his family.
It is unknown whether the mother has filed a lawsuit yet, but this is an example of a potential discrimination allegation by a non-employee.
Other non-employee plaintiffs in a lawsuit could include vendors, suppliers, patients, and anyone else who interacts with the business.
Wage Law Violations
Lawsuits are frequently filed against businesses alleging violations of federal, state or local wage and hour laws.
Basically, the employee claims that an employer has refused to pay the wages and other benefits they have earned.
Examples of possible wage and hour law violations include unpaid wages, unpaid or underpaid overtime, minimum wage disputes, and refusal to pay bonuses and other benefits.
The guiding federal policy for wages is the Federal Labor Standards Act (FLSA), which was enacted back in 1938 and is still going strong.
The FLSA defines and establishes:
- Minimum wage which, as of July 24, 2009, was $7.25 per hour. Many states have minimum wage laws as well. The employee is entitled to the higher of the federal or state minimum wage.
- Overtime pay for nonexempt employees who work more than 40 hours per workweek at the rate of at least one and one-half their hourly wage.
- Hours worked to include all hours the employee is required to be on the employer’s premises.
- Record keeping guidelines for employee time and pay records.
- Child labor laws that protect children from being in harmful jobs or conditions.
Businesses must be aware of and adhere to state and federal labor laws.
Verdicts in the millions of dollars are awarded annually for issues such as misclassifications of employees, incorrectly calculated overtime pay, mismanaged required breaks, and erroneous record keeping.
Often lawsuits are filed against businesses based on torts.
A tort is a civil wrong, negligent or intentional, that causes physical damage or bodily injury.
For the plaintiff to prevail in a tort-based lawsuit, they must prove that there was a duty owed and breached that resulted in property damage or bodily injury.
Negligent or unintentional torts occur when the business owner or employee acts carelessly or fails to exercise due care.
Examples include automobile accidents or not properly clearing store aisles of debris.
Intentional torts occur when the business owner or employee intends the outcome of their action or can reasonably foresee that damage or injury will occur as a result.
Assault, battery, false arrest, and wrongful eviction are just a few examples of intentional torts.
Breach of Contract
Breach of contract is another common source of lawsuits against businesses.
A contract is breached when one party to a legally-binding agreement fails to perform or interferes with the other party’s performance.
A breach of contract claim must meet four criteria to be successful:
- A legally binding contract existed
- Plaintiff performed as required
- The other party to the contract did not perform as required
- Plaintiff sustained damages
For example, the plaintiff entered into a contract to purchase 100 tennis rackets and issued a check for $1,000.
The tennis racket producer did not deliver any tennis rackets.
Therefore, the plaintiff sustained monetary damages for cost plus anticipated profits.
Some of these lawsuits may be covered by insurance.
For example, an employment practices liability policy may cover employment discrimination claims or a general liability policy may respond to tort-based lawsuits.
Do your research and speak with the appropriate people to make sure your business is properly protected.