THE TOP 10 SMALL BUSINESS LEGAL CONCERNS 

According to a recent survey conducted by the National Federation of Independent Business, (NAFIB) which stated that the top 10 greatest concerns of small business owners were as follows (definitely not what I expected):

#1: Health Care 

#2: Oppressive government regulations 

#3: Federal income tax on business,

#4: Uncertain economic conditions  

#5: Tax compliance complexity

 #6-9: Other government related issues 

#10: Finding qualified employees 

Following are a few of my personal comments on each of the areas identified by the NAFIB survey based on the what I learned during my research (Read my article on Small Business Insurance):

#1: Health Care - You can almost bet there will be some changes in this area and soon

#2: Oppressive government regulations - Always changes as well (better or Worst who knows)

#3: Federal income tax on business - (There were some major changes in 2018 (Of course you have an accountant but I believe you would be well off to have some understanding of what those chances are).  Note:  Your accountant is not paid to educate you on those changes, just prepare your taxes, (But your attorney will talk with you about any area of the tax laws and will make recommendations as well).

#4: Uncertain economic conditions -  Your guess is as good as mine, probably better, but I would say that you will need to keep on top of things and be pro-active ...

#5: Tax compliance complexity - Man … this really is a bear … makes me want to play like an ostrich and stick my head in a whole …

#6-9: Other government related issues -  never ceases to amaze me ... 

#10: Finding qualified employees - This is becoming more and more of an issue for all business owners.  Believe it or not I/We had some of these same  personnel issues in the military as well.  What I personally found was that it was almost always best to first try and educate and motivate the people you have and if it does not work, get rid of them quickly, (you know the deal, a rotten apple can spoil the barrel).

There were 65 additional issues mentioned in the NAFIB survey.  

Following are a few of the other areas you must try and stay on top of as anyone of them could end in a Law Suit, (some may apply, others may not):

Hiring & Firing Employees

This is a big issue for most business owners.   Some business leave this up to their HR managers.  That’s mistake number one.  Generally speaking, poor performers know that they are poor performers and they are almost never angry about being fired when it's done professionally.  What they are usually most angry about is the who and way they were terminated.  How do I know this … been there, done that … more times than most.  

Most people don’t think of the military this way but I can tell you without hesitation the military have the same problems as is found in the civilian sector but maybe in larger numbers.  During the period 1982 -1985 I work as the Chief of Transportation and Packaging at The Defense Contract and Administration (DCAS) Los Angeles).  After being there for about 60 days I realized that my secretary was about as worthless as a set of … on a bull!  She was exceptionally attractive and it was clear that her attractiveness was probably the primary reason why she was still there, BUT it was also because everyone was convince that as a Union employee, it would be dam near impossible to fire her.  Wrong!

After much effort to get her to correct / improve her work ethics, I decided that she had to go.  And then the union stepped in.  They told me that it’s was almost impossible to fire her and I would be better off to bite the bullet and move on to my next duty station when my time was up … Wrong Again!  Long story short, about four months later I handed he some walking papers and she was gone. Point being:  There is a Right Way to do things!  And once done correctly, it is far more difficult to lose a court battle. And the union knew that I had done the job correctly.

Hiring A New Employee!
During that same period at DCAS I interviewed three different people for a GS-12 position.  Big bucks!  All three of the people I interviewed were extremely well qualified.  I wish I could have hired all three.  I selected the one I through was the best of the best, hired her and then sent letters to the other two telling them why I did not hire them.  One of those rejected sent a letter back thanking me for being so professional and asked if I would speak to the her organization, the Federal Working Women of OC, (I think it was), she asked me to speak to them on … Interview Technique.  I did.  It went extremely rewarding!  I almost felt bad about not hiring her, but I was still confident that I had hired the right person.  

In today’s world, you should not hire anyone without being sure you feel he/she is the best qualified person for the job. You should also:

#1.  Keep a copy of the his/her resume

#2.  Present then with a JOB description or an employee contract (I will post something @ gospusa.com/b2b to help you get started).

#3.  Conduct training secessions with all new employees (I would also select one of your best employees to assist you with this also).

Be advised, firing an employee falls under a whole new ball game and my advice to you is simple:  Talk to an attorney first.  

Disgruntled Employees

This is an are that is tuff to handle - I recommend you always to start with a face-to-face meeting (but I know from experience that most people don’t handle this well, (hence the rise of the professional hatchet person … never the best solution).  My experience:  People generally will except what ever comes along as long as they think it was fail and they know when it’s fair or not!

Discrimination/Harassment Cases

The legal ramifications of alleged discrimination - sexual, ethnic, age or otherwise, can cause your small business much pain …  you need to make dam sure your human resources and legal departments are well equipped to handle these issues whenever they arise … and they will!  During the hiring process, you should make sure you maintain copies of all the applicants' resumes should allegations of discrimination arise. You must be able to prove that you hire the most qualified individuals, regardless of gender, ethnicity or age.

You should also conduct regular meetings to maintain and keep up on co-worker relations and insure that discrimination on a smaller scale is not occurring between office cliques, or influencing the decisions of middle and lower managers.  Make no mistake, the “legal buck” must stop with you!  

Harassment - sexual, racist or otherwise - can cause serious problem in an integrated workplace with workers from various ethnic and religious backgrounds and social classes. Conduct routine meetings and interviews with staff to insure that you are kept abreast of any transgressions, and eliminated them quickly even if terminations are required.  

A word to the wise:  Do not terminate anyone without talking to your lawyer.  Victims of harassment and discrimination often times will do all they can to fight back which attract lots of media attention, which can not only hurt your company's public image but could also drain your legal budget. Be proactive and stomp out these problems before they start.

One more thing:  If you have employees who speak english as a second language, they will probably speak the native language during breaks and often while at the coffee of water stand.  This can easily cause misunderstandings, (as a Company Commander in the Republic of Korea I have first hand knowledge of this), and it can easily erupt into a brawl.  

Slips, Trips & Falls 

Last year there were over 100 million law suits filled in America!  Approximately 4.2% were Trips, Slips & Falls, BUT 95.8% of all Trips, Slips and Falls never reach the courts but are settled out of court, which seems to be the norm.  Sadly, there are a whole “slew” of law firms, spending millions of dollars yearly to attract potential trip, slip and fall clients … almost to the point of encouraging people to try their luck at bogus trip, slip & fall law suits.  

Settlements does not have to be the norm.  Over the last several years I have been the victim of three different attempted law suits. Two were trip, slip and fall related and both were at the same property, (rental properties are prime target for trips, slips and fall accidents), one involved an auto accident which I had no fault IN, my only fault in each of the cases what that the property was a high rent property and in case of the auto accident, I had excellent auto insurance.  Fortunately, my attorneys were able to work some magic and I walked away clean in all three attempted law suits.  

Dissatisfied Customers

Dissatisfied customers oftentimes become vindictive … some will file class action lawsuits against your company.  They gather in large consumer groups and attack your company over faulty products, and services. Class action lawsuits can do more damage than any individual or corporation and irreparably tarnish your brand's image.

Make sure you are pro-active in solving these problems before they start, and make sure you have a solid legal team to back you up should you get sued. Good communication in the workplace and a hands-on approach to management is the best deterrent.

Employee Compensation

The law requires that anyone with employees must have some type of Employee Compensation insurance.  Employee Compensation insurance can be provided by a provider insurance company, a state provider or if you have a large sum of money you can put up you can self insure 

Immigration Audits

This has to be clear to all … 

Copyright, Patent and Trade Mark Issues

If it does not apply to your business don’t worry about it but if it does … I recommend you contact an attorney  

Disputes, Contracts, Venders 

Contact an attorney!

Landlord Tenant Issues 

If you have any concerns about what to say don’t say anything …  call your attorney!