Important Steps to Take When
Your Business is Being Sued

As if businesses weren’t subject to enough trouble from lawsuits — real and frivolous — before COVID-19 arrived, the pandemic only exacerbated the challenges of running a business. Especially at the beginning, employee lawsuits over the pandemic skyrocketed, with small businesses with 50 or fewer employees being hit hardest, according to ClaimsJournal.com.

Though those days and challenges are receding as the nation better manages the virus, businesses still face legal challenges — many of them coming out of the blue. Employees, consumers, suppliers, competitors, and other parties all seem ready to rush to the courtroom to drain your pockets.

If you own a business in the San Francisco area, or nearby in San Jose, Santa Clara, San Mateo, or throughout Alameda County, and you’re being sued, contact the Law Offices of David H. Schwartz, INC. Your business’s survival may be at stake, Rely on the 45 years of solid business litigation experience of attorney David H. Schwartz.

Common Business Lawsuits

Some types of business lawsuits occur more frequently than others, each presenting its own unique challenge. The lawsuits your business may face include issues involving:

  • Breach of Contract: Perhaps you failed to deliver the goods specified in your contract, or on the other end, you failed to pay for them.
  • Slips and Falls: If someone is injured from slipping on a wet surface or loose carpet, you could be held liable. (If it’s an employee, it should be covered by workers’ compensation.)
  • Premises Liability: Slips and falls are one example of premises liability, but there are other circumstances that can cause injury to customers. Goods can fall from a shelf, customers can be cut by objects or burned by electrical malfunctions, or an employee can cause an injury to a customer.
  • Product Liability or Warranty: If you distribute or sell products, buyers might sue for injuries or damages or for your failure to live up to a warranty, real or implied.
  • Auto Accidents: If an employee out on company business runs into another vehicle and causes injuries or damage, you could be held liable, though you should have commercial insurance to cover this.
  • Discrimination against Employees: Federal and state laws prohibit discrimination based on a variety of classes and factors, such as age, gender, religion, sexual orientation, and more.
  • Discrimination against Customers: You cannot discriminate against or refuse service to anyone in a protected class.
  • Harassment: Similar to discrimination, you cannot harass employees with inappropriate comments or actions, especially of a sexual nature.
  • Employee Injury or Illness: Employees who become ill or suffer injuries at work should be covered by workers’ compensation, but this hasn’t prevented lawsuits over COVID-19.
  • Intellectual Property Rights: It’s not unusual for someone you’ve never heard of to sue you for theft of their ideas or intellectual property. You need to be careful about using logos, images, songs, or even processes that others already own or created.

Steps to Take When Your Business is Sued

The first step is to remember not to go it alone and respond to the plaintiff on your own. When there’s a lawsuit on the table, you need to obtain legal representation so your words and actions don’t come back to haunt you. Anything you say or do can and will be used against you in a court of law, just as it would in a criminal case. Let your attorney maintain contact and handle the communication.

If the lawsuit represents a case of premises liability or another form of a claim covered by your liability insurance, you should refer the lawsuit to your insurer. If it’s covered by your policy, the insurer may take over the case entirely.

Even if the lawsuit is covered by your insurance policy, step one is always to consult with a business litigation attorney before doing anything. You should review the lawsuit in detail with your attorney and discuss every step of your response going forward.

Watch for Deadlines

You will be asked to respond in writing to the lawsuit within a given time frame, often 30 days. You need to go over your response carefully with your attorney. Your response should cover each of the plaintiff’s allegations, confirming or denying as necessary. You should state your defense and make counterclaims. Finally, you should declare whether you seek a jury trial or an alternative resolution, such as an out-of-court settlement.

Documentation & Investigation

When facing a lawsuit, you need to assemble all pertinent documents and records concerning the issue. Stop the automatic shredding process until the lawsuit is settled one way or another.

With your attorney’s help, conduct an internal audit of everything pertinent to the case at hand. Gather input from everyone involved in one way or another. Investigate thoroughly. If misconduct or fault is uncovered, take steps to make sure it never happens again. Revise employee handbooks and policies if necessary.

Be Honest

Finally, be open and honest with your attorney. Don’t hold any facts back or try to hide things. If matters proceed to the courtroom, the truth will come out anyway, so it’s better to be prepared in advance, which means keeping your attorney fully in the loop.

Rely On an Experienced 
Business Litigation Attorney

In more than four decades of business litigation experience, the Law Offices of David H. Schwartz, INC, has defended businesses against every imaginable type of lawsuit. Sometimes it’s simpler and cheaper just to settle than go through the court process, even if the lawsuit is less than valid. In certain circumstances, it may be necessary to see matters through to their conclusion before a judge and jury. When you meet with attorney David H. Schwartz, this and every other important matter will be discussed and explained to you fully in everyday terms.

If your business faces a lawsuit in the greater San Francisco area, including San Jose, Santa Clara, San Mateo, or throughout Alameda County, contact the Law Offices of David H. Schwartz, INC immediately.


Recent Posts