Top 5 Reasons Massachusetts Businesses Face Litigation—and How to Avoid Them

Running a business in Massachusetts, whether it’s a startup in Cambridge, a family-owned retail store in Worcester, or even a manufacturing business in Springfield, there is always a mix of opportunity and risk to be considered. One of the most likely threats to any business is the risk of litigation taking place. A business lawsuit can be time-consuming, expensive, and damaging to your reputation. However, if you are familiar with the commonest legal pitfalls and how they can be avoided than this could be vital to the stable running of your business operation.

Below are the top five reasons Massachusetts businesses may at some time face litigation and what could be done to avoid them.

Employment disputes

Employment-related lawsuits are considered to be the commonest legal problems businesses often face in Massachusetts. Claims may be due to any of the following

• wrongful termination;
• discrimination based on race, gender, age, disability etc.;
• employment related harassment;
• wage and hour violations;
• misclassification of an employee as independent contractors.

Massachusetts has strong labor laws, and the Massachusetts Commission Against Discrimination (MCAD) is active in investigating complaints. Also, the federal Equal Employment Opportunity Commission (EEOC) and the Department of Labor enforce employment protections.

How to avoid employment disputes

• Keep up to date detailed records of employee performance, any disciplinary action, and any communication that has taken place. This will help to defend your business against any false or exaggerated claims.
• Conduct regular anti-discrimination, harassment, and compliance training with both management and staff.
• Make sure your employee handbook is current and is compliant with both Massachusetts and federal laws.
• Classify workers appropriately as misclassifying an employee as independent contractors could lead to a lawsuit and penalties. If you are not sure what to do, talk to a business law attorney as soon as possible.

Breach of contract

Contracts these days are important parts of any business and they cover everything from a vendor agreement to a lease and customer terms. A breach of contract may have alleged to have taken place when one of the parties does not meet their obligations under a legally binding agreement. Massachusetts courts see thousands of breach of contract claims annually, and even small disagreements can lead to major legal expenses.

How to avoid litigation as a result of an alleged breach of contract

• Make sure your business drafts a clear contract, as a poorly written, vague agreement could lead to a misunderstanding.
• Try to use written agreements, as verbal agreements aren’t always enforceable; written contracts offer much clearer proof and are much easier to enforce.
• Review your contracts regularly so that they reflect today’s business practices and laws.
• Use tools or allocate suitable staff to monitor any deadlines, payments made, and any other commitments.
• If an issue occurs it should be resolved as soon as possible.

3. Consumer protection violations

Massachusetts has some of the most powerful consumer protection laws in the U.S., particularly under Chapter 93A of the Massachusetts General Laws.  These prohibit “unfair or deceptive acts or practices.” Violations may include false advertising, failing to honor warranties, bad service, or not failing to disclose the most relevant product information. Under Chapter 93A, a plaintiff can recover double or triple damages, as well as attorney’s fees, which is a powerful weapon against any business.

How to avoid litigation:

• Always communicate clearly a product’s terms, the refund policies, and warranties.
• Avoid making misleading claims and make sure all advertising is accurate and substantiated.
• Deal with customer complaints and concerns quickly and in writing. A well managed complaint can prevent an escalation taking place.
• Make sure you thoroughly understand Chapter 93A.
• Use any disclaimers carefully and ensure terms and limitations are communicated clearly and prominently and not simply buried in fine print.

Intellectual property disputes

Intellectual property rights are critical in Massachusetts. Disputes could arise over any of the following:

• trademarks,
• copyrights,
• trade secrets,
• proprietary technology.

If a competitor tries to copy your brand or a previous employee uses your confidential information, IP litigation can be both complex and expensive.

How to avoid litigation as a result of an IP dispute:

• Protect your IP rights by registering trademarks, copyrights, and patents where necessary.
• Make sure employees, contractors, and vendors sign non-disclosure agreements (NDAs).
• Keep a lookout for unauthorized use of your name, logo, or content.
• Make sure you’re not infringing on another business’s IP, whether deliberately or unintentionally.
• Ensure your team understands what is considered to be confidential information and how it is to be protected.

Premises Liability and Personal Injury

If a customer, vendor, or employee is injured while on your property, you could be held liable. Slip-and-fall cases, unsafe equipment, or inadequate security may all lead to lawsuits. Even though these claims are commonest in retail companies with a physical premises are not immune.

How to avoid being sued for an accident on your premises:

• Maintain your business property in a safe condition, which means conducting regular inspections and fixing any hazards quickly like wet floors, poor lighting, or loose handrails.
• Post warnings if temporary dangers are present e.g., cleaning is in progress or icy sidewalks are present.
• Train employees by ensuring staff know how to handle spills, first aid, and emergency situations.
• Buy liability insurance as this can offer you a financial safety net.
• Keep clear up to date records of any accidents, including witness statements, photos and reports.

Often many small and medium-sized businesses wait until a legal matter arises before a lawyer is called. It is better to building a relationship with a Boston based attorney who understands Massachusetts law and can jump into action if the need arises.

A good business litigation lawyer can:

• review a contract before signing;
• monitor changes in regulatory compliance;
• handle disputes as soon as possible before they escalate;
• advise on important employment practices.

For more information, visit our website or contact us for a free initial legal consultation today