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When business goes really bad: Suing your partner

| May 28, 2020 | Business Law & Civil Litigation |

Business partnerships can go bad in any number of ways, but it may be particularly distressing to find out that the person you’ve worked with side-by-side to build up your company has suddenly deeply betrayed it — and you.

Maybe your business partner passed some company secrets along to someone else out of spite toward you. Maybe you just found out that they’re secretly funding a direct competitor. Maybe your partner has taken to trashing your reputation to anyone who will listen because you won’t do everything their way. Whatever the specifics, your business is being sabotaged.

Can you sue? Yes. Business owners, partners and even many high-level employees usually have a certain fiduciary duty to give their business their best efforts. When they act in a way that purposefully destructive (or even fraudulent), they can be held liable in civil court — even if no actual crime has been committed.

Before you decide how next to proceed, however, remember this: A lawsuit and open fighting between business partners can have a destabilizing effect on your company. It can also shake your clients’ or customers’ faith in your organization. Some may decide that the trouble is a sign that your company can no longer meet their needs and go elsewhere.

That doesn’t necessarily mean that suing isn’t the best answer — but it does mean that you should consider all your viable alternatives before you decide what steps to take next. It may be possible to come to a private agreement with your business partner (and a parting of the ways) that will allow you to better protect and preserve what you have.

If your business partner has betrayed your business, find out more about your legal options.

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