Most Common Lawsuits Against Small Businesses in New Jersey - Article Banner

Small business owners in New Jersey can suffer devastating losses if they find themselves in a lawsuit. Nothing is more heartbreaking than pouring all of your time, energy and money into a business that you believe in only to have it destroyed by someone who sues you.

We know that starting and running your own company is a dream that many entrepreneurs have nurtured for their entire lives and staying out of legal trouble is essential. Today, we will be taking a look at some of the most common lawsuits that small business owners in New Jersey face – and how to avoid them.

Contract Lawsuits in New Jersey

Breach of contract is one of the most common lawsuits that New Jersey courts see. If your business provides a service or a product and one of your clients, customers, or partners believe you did not do what your contract promised you would do, you could face a lawsuit. Contract disputes are responsible for about 60 percent of the 20 million civil cases filed every year.

Protect yourself by signing contracts that protect you, your business, and your interests. Have an attorney review every contract that is proposed and make sure any addenda or exclusions are understood and approved. Your contracts are legally binding, whether they are with other businesses, your clients or your employees.

New Jersey Torts and Liability Lawsuits

Tort cases are typically personal injury lawsuits. If someone slips and falls at your business, you can expect them to sue you. Employment discrimination, sexual harassment, wrongful death, and workers compensation cases are also included in this category. New Jersey small business owners are always at risk of attracting these lawsuits. Having your business attorney review your insurance policies on a periodic basis to make sure you are well-covered for any potential liability is a good idea.

New Jersey Businesses and Employment Lawsuits

As your business grows, it is likely that you will hire more employees. This is good for your company, but also increases your risk of wage and labor disputes. You could be accused of discrimination, retaliation, equal pay violations and creating a hostile work environment. Usually, these are not intentional infractions but merely due to the mismanagement of employees or inexperience with labor laws.

Many small business owners do not understand that there are state, federal and local laws that take precedence over any of their company standards or practices. You need to have a fair, consistent and clear company handbook and a procedure for how all complaints within your company are handled. Everything needs to be documented, including performance reviews, salary structures, and workplace safety compliance.

Protecting Your New Jersey Business from Lawsuits

Lawsuits are expensive and they can sometimes destroy a small business. There are several ways you can protect yourself and your company, including:

  • Consider incorporating or forming an LLC to limit the liability you bring upon yourself and your personal finances and assets.
  • Include Alternate Dispute Resolution (ADR) clauses in your contracts and consider binding arbitration requirements. This may save you money and time if there are any disputes.
  • Keep yourself insured. You need business insurance that covers your liability and other risks.
  • Document everything. Good recordkeeping is critical, and will often help you avoid the lawsuits that are threatened. Everything from financial statements to tax filings to employment agreements and vendor contracts must be updated and accessible.
  • Work with an excellent business attorney who can help you stay out of legal trouble.

talking to an attorneyIf you have any questions about how to avoid legal drama or you need help with a current lawsuit or claim, please contact us at Robert A. Gleaner, P.C. We are your best resource for New Jersey business law.