Businesses of all sizes are often faced with lawsuits. Of course, not all are dealing with multibillion-dollar lawsuits like Google, who was sued in 2020, accused of illegally invading the privacy of millions of users.
While economic consulting firms can be a big help in minimizing the financial damage, sometimes there’s just no way around paying a hefty sum to settle a lawsuit. There are many different types of litigation an organization might face, generally falling into one of three categories: you’re sued by one of your customers, one of your employees, or by another business.
The most common lawsuits businesses face include:
Discrimination due to race, color, age, gender, sexual orientation, marital or pregnancy status, disability, or religion. This can include wrongful termination and sexual harassment (including offensive jokes and lewd remarks, romantically pursuing an employee or offering a raise/promotion in exchange for sexual favors).
Businesses may be faced with discrimination from outside of the company, such as refusing to serve a customer due to their race, color, gender, sexual orientation, age, or disability. One example is a bakery owner refusing to make a wedding cake for a same-sex couple.
Breach of contract.
A contract is breached when a business owner fails to comply with its terms. For example, an electrical contractor signs a contract with XYZ Construction agreeing to install lighting in a complex that the company is building. The electrical contractor never starts the work, so XYZ sues their subcontractor for breach of contract.
Companies can be sued by employees who are injured on the job as well as customers who become ill or injured due to the products they make, among other situations.
Wage law violations.
Wage and hour lawsuits are often based on claims that the employer failed to pay overtime or the minimum wage.
Intellectual property rights.
If you or one of your employees uses an image you found on the web for a logo or any other purpose without permission, for example, you can face a lawsuit and be held legally accountable.
While big companies usually have the resources to pay for some of the best legal teams there are and even endure expensive litigation for years, that doesn’t mean they’re always victorious. There have been many that have had to pay millions and even billions as part of both lawsuits and class-action suits, with these just a few of the examples.
Nokia vs Apple
Nokia sued Apple for patent infringement in 2016. It claimed Apple had relied on its patents for antenna, chipsets, software, UI, display, and video coding for years, all the way back to the release of its iPhone 3GS. The companies ended up settling for a reported $2 billion.
Employees vs Coca-Cola
Back in 2000, a group of black salaried employees working for Coca-Cola accused the company of discrimination related to evaluations, promotions, and pay. A court found in their favor and Coca-Cola was ordered to settle for $133 million in addition to adjusting salaries which cost another $43.5 million, and millions more to completely revamp its practices.
Wendy Dolin vs GlaxoSmithKline
GlaxoSmithKline was ordered to pay Wendy Dolin $3 million after her husband committed suicide when taking a generic version of Paxil. At the time, the label warned the medication could increase the risk of suicidal behavior for users under the age of 25. But the jury believed Dolin’s lawyers who alleged the company had evidence the active ingredient in it increased the risk of suicide among older users by nearly 670 percent.