Lawsuits involving businesses may begin with employees or consumers initiating litigation. Other times, litigation has to do with contracts.
However, it is also relatively common for one organization to take legal action against another due to the misconduct that affects the plaintiff organization. Business torts are actions that negatively impact intangible company assets, including reputation. They can provide the basis for a lawsuit brought against another organization. The other company could be a vendor or a service provider. It could also be a competing business.
What common forms of misconduct lead to one company suing another?
1. Trade secret misappropriation
There are many ways for one business to inappropriately access the trade secrets of another. Perhaps they bribe an employee to provide non-private information. Maybe there are attempts to hack into the company’s secure computer systems. Lawsuits over trade secret misappropriation are common.
2. Unfair competition
There are many ways in which one company might unfairly compete against other businesses in the same area and industry. Several businesses or professionals might work cooperatively to manipulate the markets through price fixing, for example. Misconduct intended to manipulate the free markets and undermine fair competition can lead to litigation when there is evidence supporting allegations of unfair competition.
3. Defamation
In some cases, businesses intentionally try to harm the reputations of their competitors. Employees on one company’s social media team might leave falsified negative reviews about a competitor, for example. When one organization spreads malicious, untrue and negative information about another, that may provide the basis for a lawsuit.
Documenting inappropriate business activities is critical when contemplating business litigation. Business owners and executives may need to review their concerns with a legal professional to validate their right to take legal action.
