10 Business Events that Should Trigger a Call to Your Lawyer

As an owner of a small business, I understand the external demands faced by small and medium-sized business owners.  Sometimes we think we can do it all . . . until we realize that we can’t.  At some point, a business owner wonders “when should I contact a lawyer?”  Unfortunately, many businesses wait until a problem that would have cost a few hundred dollars to fix turns into a $10,000 problem before finding a lawyer.

Here is a list of when to call a lawyer for a quick consultation. As Desiderius Erasmus said, “prevention is better than cure.”  This is not an exhaustive list and the prevention is not absolute ,but at the very least, it will minimize your potential risks.

 1.  Before hiring your first employee

The Prevention:

• Violations of federal and California anti-discrimination laws;

• Misclassification of exempt and non-exempt employees;

• Violations of the Fair Credit Reporting Act and California laws on backgrounds checks and consumer reports; and

• Violations of federal and California employment laws on overtime pay, meal and rest breaks, and pay stub violations.

2.  Before firing an employee

The Prevention:

• Violations of federal and California laws related to discrimination, wrongful termination, constructive discharge, retaliation, and the like;

• Failure to comply with California employment laws on final payment of wages upon termination; and

• Potential disputes related to a severance pay.

3.  Before reducing an employee’s hours.

The Prevention:

• See #2 above

4. Before making an employee an independent contractor

The Prevention:

• Misclassification of employees as independent contractors; and

• Owing back taxes, unpaid overtime, penalties for meal and rest break violations, among others.

5. Before engaging an independent contractor

The Prevention:

• See #4 above;

• Unsatisfactory performance by the independent contractor; and

• Protracted breach of contract litigation.

6.  Before entering into an agreement or “deal”

The Prevention:

• Misunderstandings as to each party’s duties and obligations;

• High costs related to failure to perform or unsatisfactory performance; and

• High costs related to breach of contract litigation.

7.  When you need to collect on a debt

The Prevention:

• Potential violations of federal and California laws on debt collection; and

• Protracted litigation.

8.  When someone serves your business with “papers” such as a Summons and Complaint or subpoena.

The Prevention:

• A default judgment for failure to respond;

• Missing a statute of limitations on certain counterclaims and defenses; and

• Waiver of your.

9.  When you get a letter from someone else’s lawyer

The Prevention:

• A small problem growing into an expensive lawsuit; and

• California labor and employment laws on employees’ access to records.

10.  When you get a letter from a government entity

The Prevention:

• See #9 above; and

• An audit.

If you are in the midst of any of the 10 scenarios above, feel free to e-mail me or call (949) 529-0007.