7 Lawsuits to Watch Out For Right Now

As businesses re-open, many may be opening their doors to legal troubles. Make sure you've stayed on the right side of the law throughout the crisis.
7 Lawsuits to Watch Out For Right Now
Image credit: golubovy | Getty Images
Veteran New York lawyer, Partner of Bukh Law Firm
6 min read
Opinions expressed by Entrepreneur contributors are their own.

We're living in uncertain times in every sense. But in coming months, one thing to keep a particularly close eye on is how the legal landscape will evolve. In the wake of the global health crisis, there are likely to be many lawsuits filed. And while most business owners have done everything they can just to survive these difficult times, that desperation may come back to haunt them if they aren’t mindful of potential legal issues. Here are some potential allegations to keep in mind as you move forward with recovery.

1. Alleged exposure

In the early days of the crisis, there were (and still are) quite a few unknowns about the virus, and many Americans were not adequately informed of the risks until it was far too late. But if precautions were disregarded at your business and any of your employees were exposed while working, these employees may try to sue in order to hold your company responsible for their medical bills and suffering.

Keep in communication with your staff to avoid this type of issue. If management was aware that an employee was sick or showing symptoms, the employee will have more of a leg to stand on, so ensure that the proper documentation has been filed in the event of employee sickness.

2. Price gouging

Raising prices is never fun, especially if your long-time customers aren't used to changes. During a public health crisis, however, raising prices can have more serious ramifications: It can land you in hot water for price gouging. Already, class action charges have been made against huge corporations like Amazon and Walmart accusing them of participating in price gouging in order to turn a profit during the crisis.

If you raised prices on essential items during this time, you may want to look back at your records to prove justification for those price changes, or you may find yourself in legal trouble down the line. 

Related: What Small Business Owners Should Know About Wrongful ...

3. Failure to refund

Many small businesses are already finding themselves in trouble for not refunding customers for trips, experiences, and other entertainment-related purchases that could not come to fruition. Large corporations like Planet Fitness have already gotten into trouble for charging customers despite their doors being closed for quarantine, and this will likely be a widespread issue.

To prepare your business for these types of charges, the best thing to do is keep your customer base informed. If you must postpone or reschedule events, do your best to provide refunds to those who ask instead of assuming that your customers will be happy to wait for an experience they’ve already paid for. 

4. Partnership disputes

Those who are part of a business partnership may find themselves at odds after necessary cutbacks have been made, and this can unfortunately lead to partnership disputes.

While trying to keep your business from going under in these hard times, there are bound to be disagreements between partners — that’s just the cost of doing business. But don’t allow a partnership dispute to be the reason your company fails; if you and your partners cannot come to an agreement during this time, hiring a lawyer is a good idea to protect your interests and your assets. 

5. PPP loan issues

If your business has struggled during the crisis, chances are you’ve applied for a PPP loan through the Small Business Administration to help keep the ship afloat.

Keep in mind that there are strict guidelines to follow when applying for and using PPP loan funds, so be sure you follow those rules to the letter of the law to avoid getting your business hit with felony charges. Think about hiring a CPA or another financial professional to help you navigate those murky waters so that you don’t miss any step in the process. 

If you are accused of SBA loan fraud, embezzlement, or other federal matters related to your small business loan, it could damage your reputation and ruin your business, so it’s best to keep ahead of this by hiring a professional to take care of your finances and ensure you’re following every rule and regulation. 

Related: Nine Common Legal Mistakes Small Business Owners Make

6. Wrongful death

The death of any employee is a tragedy, regardless of how large or small your business may be. This will take an emotional toll on you and your team.

And if that employee died from the virus, your company may be the target of a lawsuit by grief-stricken family members. No one wants to lose a loved one, but if you’ve done everything you can to keep your employees safe, hiring a personal injury attorney to defend your company against these charges may be your most logical move.  

7. Unemployment insurance issues

Many people have had to lay off staff during this hard time in order to keep their businesses from going under. While this is a hard choice, keeping up with unemployment insurance is one way to support your employees who you cannot afford to keep on the payroll at the moment. Just be aware, there may be issues along the way.

If you or your business are found to have committed unemployment fraud or are dishonest when filling out these forms, you may be subject to federal action for your criminal wrongdoing. The best way to ensure that you avoid a lawsuit like this is to have a trusted financial professional around that you can rely upon. As with SBA loans, it’s important to keep every piece of documentation you can that proves you followed the letter of the law.  

The changing legal landscape 

There’s no doubt that the world we left in 2019 is not the same world we are living in in 2020, but adapting to the changing landscape will be essential if businesses want to survive this unprecedented economic downturn.

The best way to keep your company and your employees safe from legal issues during this time is to hire a trusted attorney who will look out for your best interests. No one else will be able to provide the advice, experience, and care that you need to get you through this hard time. 

Related: 8 Legal Requirements When You Start A Business

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