Ultimately, you want to keep your business out of court. However, in the course of running your business, disputes with other companies and individuals will arise. Sometimes, these disputes have to go to court or go through some other method of dispute resolution before a third party to resolve. In these instances, it’s necessary to have an experienced business litigation attorney advising your company.
What is Business Litigation?
Business litigation, often referred to as commercial litigation, covers any type of dispute that can arise in the context of doing business that requires formal resolution in court or before a neutral third party, such as a mediator or arbitrator.
Business litigation can involve disputes around the company’s formation, its breakup or dissolution, shareholder issues, how the business is operated and run, or the fiduciary or financial duties of the business’ leaders and employees.
Business litigation can also involve disputes around non-competes or other contractual obligations like those under a teaming agreement, shareholder agreement, operating agreement, or vendor agreement.
Disputes can also arise from the way a company treats its employees and contractors, and can involve topics like independent contractor agreements, overtime pay, worker misclassification, retaliation, and discrimination.
What does a Business Litigation Attorney Do?
A business litigation attorney is a lawyer that helps companies resolve their legal disputes, either through informal negotiation, or through formal resolution before a court, mediator, arbitrator, or administrative forum.
The best business litigators can resolve a company’s disputes quickly and with minimal company resources. However, some disputes are complex, can be extremely costly, and take a long time to resolve in the company’s best interest.
A company usually uses an outside law firm to resolve formal disputes in court. The law firm that the company hires will have specific experience resolving similar disputes, sometimes with particular expertise in their industry, but not always. It actually isn’t necessary to hire a business attorney with specific industry experience.
Business litigators are outside counsel hired to advise the company objectively on the best legal options available to resolve the company’s dispute in the fastest and most cost-effective way. The attorney’s objective viewpoint is critical because many business owners can get stuck on the “principle” of the matter, but ultimately, a business must be operated in a revenue-generating way to continue company growth and achieve business goals.
What Are the Most Common Types of Business Litigation in Virginia?
Business litigation includes any type of legal dispute that could arise in the process of doing business with either companies or individuals.
Common Legal Issues for Businesses in Virginia
- Non-compete, Non-solicitation Agreement Disputes: These arise when an employee leaves one employer and goes to work for another and is subject to a non-compete agreement. Non-competes are not popular with courts because they limit an employee’s ability to earn wages and are written in the company’s favor. Many states have specific laws that restrict or narrow the enforceability of non-compete agreements. The more compensation an employee receives, the more likely a court is to enforce a non-compete agreement.
- Overtime Cases: A company can easily be sued for failing to follow overtime laws. The federal overtime statute is the Fair Labor Standards Act (FLSA) which requires employers to properly classify workers as exempt or non-exempt. If an employee is exempt, they are not entitled to overtime wages. There are also state overtime laws that companies should abide by. Virginia companies in particular should be aware of the Virginia Overtime Wage Act (VOWA), which was recently amended in 2022, and allows for expansive employer liability. The Virginia Overtime Wage Act (VOWA) as amended in 2022 allows employees to receive double damages and possible treble damages for knowing wage violations. Also, VOWA gives employees a private right of action to sue in Virginia courts, which is beneficial to employees, because state courts are more likely to allow state claims to proceed all the way through trial than federal courts.
- Discrimination Cases: Depending on the number of employees a company has, it will be subject to equal employment opportunity laws. A common law that applies to many medium and large businesses is Title VII of the Civil Rights Act of 1964 (Title VII), which applies to companies with 15 or more employees and prohibits discrimination on certain characteristics (gender, race, sexual orientation, national origin, and more).
- Other common laws that apply to medium and large businesses are:
- § The Age Discrimination in Employment Act (ADEA) applies to companies with 20 or more employees
- § The Americans with Disabilities Act (ADA) applies to companies with15 or more employees
- § If you own a small business, you may be subject to state-level anti-discrimination laws. Most states have human rights acts that mirror federal anti-discrimination laws. For example, Virginia has the Virginians with Disabilities Act, which covers employers with less than 15 employees.
- Other common laws that apply to medium and large businesses are:
- Internal Workplace Investigations: If a claim of discrimination or illegal activity occurs in your workplace, it’s important to ensure your workplace is safe and a positive environment for your workers. A company can protect itself from legal liability by conducting investigations when necessary. An experienced business and employment attorney can assist with internal workplace investigations to uncover the facts of what actually occurred and help your company follow best practices. You may not want to hire your usual business litigation attorney to conduct the investigation, because it is not standard practice to have the investigation attorney represent the client if the case proceeds to court.
- Shareholder, Member, or Partnership Disputes: Disputes can arise when the founders are parting ways or want different things out of the business. Corporate disputes can quickly go sideways and involve intense emotions and having an experienced business litigation attorney on your side can help you go from stressed and anxious to empowered and protected.
- Trademark and Copyright Disputes: Companies can receive a cease-and-desist letter from another person or entity that is claiming the company is violating their intellectual property rights. It’s important to involve a business litigation attorney with experience in intellectual property issues so that you can know how to best respond to a cease and desist letter. Frequently, a fast and reasonable solution is achievable without going to court, and a business attorney with intellectual property expertise can best protect your company’s interests.
- Unemployment Benefits Hearings Before the Virginia Employment Commission: When an employee is terminated, they may file for unemployment insurance benefits from the Virginia Employment Commission (VEC). Virginia law dictates whether a former employee is eligible for benefits, however, the VEC is an employee-friendly agency and often sides with the employee. There are two main disqualifiers for unemployment benefits: (1) voluntary resignation, and (2) termination for willful misconduct. Your company may be challenging a former employee’s claim for unemployment benefits before the VEC, and you may need legal counsel to assist you in this forum if you are unfamiliar or have questions. However, it is not required for a lawyer to represent a company before the VEC.
- Business Torts, e.g., Tortious Interference with Contract or Business Expectancy: Businesses have to be careful not to encroach on other companies’ or individuals’ contracts or potential business opportunities. In certain circumstances, even if it’s not intentional, your company could be liable if your actions or inactions cause monetary harm to another.
The legal services of an experienced business litigation attorney may eventually be required in any of these common scenarios. In most cases, the sooner an attorney gets involved, the better the outcome will be for your business.
How is Business Litigation Different from Other Types of Litigation?
Business litigation can be more complex than other types of civil cases because businesses are involved. Corporate issues also tend to be specialized, which makes them different from traditional lawsuits between individuals or companies that don’t have an impact on larger organizations beyond their own scope.
Also, in many business litigation cases, they can involve multiple parties, including parent and subsidiary companies, individual corporate executives, and employees of the company.
What is the difference between business and commercial litigation?
There is no difference between business and commercial litigation. Business and commercial litigation are interchangeable terms, and both apply to disputes involving companies.
Business Litigation vs Civil Litigation
Business litigation is a subset of civil litigation. In general, there are two systems in the American legal system: (1) the criminal system and (2) the civil system. Civil litigation involves seeking monetary or non-criminal relief against a party in court that is not criminal in nature. Criminal litigation involves the state or locality prosecuting an alleged criminal violation.
Business litigation is a type of civil litigation that involves the rights and obligations of a company. Civil litigation can also include personal injury, construction law, employment law, and government contracts litigation, among others.
Contact The Lipp Law Firm for your Business Litigation Needs
You may not expect or hope to ever need a business litigation lawyer for your business, however, if a dispute arises between co-owners, members, or shareholders, or with your employees, you’ll be very glad to have one properly representing and protecting your company.
The experienced business litigation attorneys at Lipp Law will stand up for your business interests in Virginia, Washington, DC, and Maryland, and will focus on speed and conserving your legal resources.
Call Lipp Law
We look forward to serving your needs.