Most Common Lawsuits Filed Against U.S. Companies

Innumerous lawsuits are filed in U.S. courts every year. Many are settled out of court for astronomical amounts, others do or don’t award the plaintiff at the end of the trial and still others are dismissed for lack of evidence. Making the top five of those filed against U.S. companies are as follows:

1. Labor/Unemployment – One of the precipitators to this is the escalation of layoff numbers over the past several years. The national unemployment rate climbed to 8.1% in February of this year, the highest it’s been since 1984. This does not include the mass of individuals who have been laid off beyond the ability to receive unemployment. The layoff of high-level executives is not beyond the pale, either, which has sparked many of the lawsuits against companies today. The predominant lawsuits under this category, however, are wage and hour claims, discrimination (including age-related cases) and wrongful termination.

2. Contracts – Breach of contract lawsuits can be filed against companies when they do not fulfill their contractual obligations. Maybe the company did not deliver a product, or did not complete a service or did not fulfill something expressly documented in a signed contract you had with the company. In any situation where obligations of a contract are not fulfilled, a lawsuit may be the only way to resolve the dispute. These are particularly common in the services industry. Ralph the roofer committed to replace your entire roof for a specific amount of money to be paid upon completion. You paid Ralph upon the completion of the job. What you found out during the first rain, however, is that Ralph and his crew did a shoddy job. Ralph is elusive and non-responsive to your calls, so you hire another company to redo the job. You sue Ralph in attempts to collect your money back from him and his company. He breached the contract. He did not fulfill his contractual obligations.

3. Personal injury – There are innumerous frivolous lawsuits that occur in this category. Someone sees an opportunity to make some quick cash. They plan and execute a fake fall in the presence of witnesses, file a lawsuit and sometimes win hundreds of thousands of dollars in compensation. Companies have wised up to these incidents and many of them have monitoring equipment in place to capture the fraudsters on camera. This has been a great deterrent in litigation for these types of cases. There are legitimate incidents, however, where the company is directly at fault. To collect punitive damages, though, the plaintiff has to not only prove gross negligence, but also malicious intent.

4. Product Liability – You’ve probably heard about all the problems experienced a few months ago with the toys imported from China. Lead based paint was one of the primary concerns. Mattel had to issue a recall on several of the toys. Less than one month later, unfortunately, Mattel had to issue another recall. Liability lawsuits started rolling in. Mattel doled out $ 12 million to settle with 39 states to pay for damages caused by the tainted toys.

5. Intellectual Property (IP)/Patents – The most common types of IP are trade secrets, industrial design rights, patents, copyrights and trademarks. A disgruntled employee decides to sell trade secrets to a competitor after being laid off or fired. A successful salesperson takes his customer list with him when he leaves the company and uses it to when selling similar services for another company. An IT technician develops a product that uses his former employer’s proprietary technology as the product’s foundation. These are all examples of violating IP/patent laws that result in IP/patent lawsuits.

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