HOW SHOULD BUSINESS OWNERS RESPOND TO A LAWSUIT?

Beginnings and endings in the business world are delicate things. Whether initiating a business deal and partnership or terminating an employee, business owners must take great care to secure their business and adhere to California law. A contract will inform and outline these business relationships, from beginning to end. However, just because a contract ends does not mean the terms included in it should. That is when a survival clause will be critical. What are the basics of a survival clause? As discussed above – and in a previous blog post – a survival clause defines what terms of a contract will continue to be enforced even after a contract ends. These are not blanket clauses that cover every aspect of the contract. They must be specific to particular elements and worded precisely. A contract that lacks proper survival clauses could put the survival of the entire business at risk. When does your contract need a survival clause? Business owners should consult legal guidance to craft effective survival clauses when: The business shares intellectual property, including processes, trade secrets or related information, which the blog post mentioned above discusses further The business discloses confidential information, such as financial or client details, that is protected under a confidentiality clause or agreement The parties involved must make payments or continue certain obligations included under the contract for a specific period of time For example, it is only natural for employees to have in-depth knowledge of a business’ intellectual property. If a business terminates an employee, it will be critical to ensure the former employee does not divulge that information, even long after their contract ends. Including a survival clause in the original employment agreement or even a severance agreement regarding confidentiality can secure the business’ best interests and prevent serious disputes in the future. Every beginning and end requires careful planning and preparation. It is important for business owners to work closely with an experienced business attorney to help craft and enforce contracts that will keep the business secure.

No business and no one person is the same, nor will they have the same strategies and goals. Even so, each party in a business deal should come to the table with a focus on finding an agreement that is good for both businesses and the deal itself, for negotiations to be successful. Unfortunately, this is not always the case. Some parties may have only their own benefit in mind, and in turn, may negotiate in bad faith. While it is critical to consult a legal professional before you begin negotiations for a business deal or contract, it is also essential to prepare yourself, and know what to be aware of as you move forward. 2 SIGNS THE OTHER PARTY IS DEALING IN BAD FAITH California business owners know the art of the deal. There are many issues to be cognizant of as you enter into negotiations. For example, it is always helpful to consider what you should do as you approach business negotiations – after all, that informs you of the behaviors you and the other party should avoid as well. There are two opposing behaviors in particular that could indicate the other party is not acting in good faith. Business owners should watch for: Urgency: Perhaps the other party is rushing to reach an agreement without paying attention to the details. Or maybe they push one specific agenda aggressively, without thought for any compromise. A sense of urgency for no particular reason is often a sign that the other party is dealing in bad faith. Delay: The opposite side of the coin is also a red flag. If the other party constantly avoids any type of conflict, reschedules meetings or puts off agreeing to the terms, this could also be a sign of bad faith negotiations. It is only natural to have your own business’ interests in mind. However, when it is clear that the other party does not have the deal’s interests in mind and does not consider the future remotely, this is a dangerous sign. During negotiations, if you recognize signs of bad faith, the first step will be to speak with an attorney. Seeking legal guidance can help you navigate negotiations while protecting your business.

Employers never expect to have trouble with an employee when they hire them. Yet, disputes are all too common and often inevitable. Working to resolve employee disputes can be stressful, but there are a few critical things employers must do. FOLLOW THE RULES This might sound like a simple enough task, but employers must take great care to ensure they understand and adhere to the rules. These rules fall under two categories: The law: Of course, as an employer, you ensure you follow California employment laws every step of the way. However, it is even more important to review what you must do when facing a dispute, as well as the rights your employees have in this situation. This can help prevent issues from escalating and prevent retaliation claims, for example. Your policies: Employers establish conflict resolution clauses and policies for a reason. You expect your employees to follow these procedures, and you must as well. Long before you face an employee dispute, it is a good idea to review the laws and your employee policies to make sure they remain up to date and relevant. It often helps to have an experienced employment law attorney review your policies as well. That way, you can approach and manage disputes much more effectively. COMMUNICATE CRITICALLY Communication is always essential. In terms of any relationship, not just employment or business relationships, communication is how you work through conflict more effectively, especially when pursuing alternative dispute resolution. However, you must also be strategic with your communication. For example, you may want to speak to other parties involved in the dispute through your attorney or only with your attorney present. There are many matters to address in employee disputes. These steps will be critical to remember with every issue that may arise. Do not wait to address disputes. Employers must take swift action in these cases. While you should carefully consider how you move forward, it will be essential to seek guidance as soon as possible.