U.S. LAW & LITIGATION

U.S. law suits, both in state and federal courts, get expensive and are burdensome for German companies.  The outcome of a law suit in the U.S. as compared to Germany is far less predictable.  Any foreign-owned company doing business in the U.S:A. must establish a document retention policy, preserve the attorney-client privilege, and deal effectively with discovery.

 

As in any jurisdiction avoiding lititgation is the best strategy to be safe from the downsides of litigation.  Although proper drafting of contracts may be helpful to achieve this, it will not always be possible.  Mediation and arbitration clauses are advisable.

 

German business should know the challenges and requirements connected with doing business in the U.S.A. Consultation and/or a handbook about the pertinent federal and state laws are indispensable.

 

U.S. labor and employment law is quite different from Glerman labor law. The U.S. commom law concept of "at-will employment" means that employees can be terminated at any time, without any reason, but not for the "wrong" reason. This basic understanding of the employment relationship is supplemented by a multitude of anti-discrimination laws.  Violations of anti-discriminatory laws can result in expensive, media-commented litigation and damage to the company's reputation.  It is not uncommon that stock value losses ensue as a consequence of unfavorable reporting in the media.

 

Compliance in the context of corruption has become a mainstream subject in Germany as well.  The U.S. "Foreign Corrupt Practices Act" (FCPA) provides for substantial monetary penalties and potential prison sentences for board members o German companies with U.S. subsidiaries.  Exclusion from export licensing, stock exchange listing and public bidding are other possible consequences of getting caught in the corruptive act.

 

Claims for product liability are common in the U.S.  Every German enterprise doing business in the U.S. should know how to avoid product liability.  The obvious, and best, approach is to avoid manufacturing defects and comply with  ISO Standards.  Other measures are product liability insurance, indemnification clauses and material data safety sheets.

 

Other areas of importance to German businesses are: liability of shareholders, "piercing of the corporate veil", Export Administration regulations, International Traffic & Arms regulations and the Foreign Asset Control regulations.