From government scandals to wrongful termination suits, malfeasance is a term that is becoming increasingly common in our legal system. But few of us are aware of the full implications of this term or how it applies to businesses. To understand how malfeasance legally affects companies, we must first understand the definition of the word.
What Is Malfeasance?
Simply put, malfeasance is defined as an individual’s misconduct or improper behavior, especially when it involves the abuse of power or position. It can potentially involve any form of improper or illegal action that a person in a position of power or responsibility undertakes in order to benefit themselves or someone else. It is important to note that malfeasance does not necessarily involve criminal activities – although it can. In some cases, malfeasance can lead to criminal charges.
How Can Businesses Face Legal Implications Due to Malfeasance?
Businesses can face both civil and criminal legal implications due to malfeasance. For example, a company that is aware of employee misconduct but fails to take action can be sued for negligence. This is often seen in cases of sexual harassment or discrimination. Additionally, business owners can be held liable for malfeasance by their employees if they knew or should have known the employee was acting illegally or improperly. This could include mishandling of client funds or a breach of contractual obligations.
In extreme cases, businesses may also be charged and convicted of criminal malfeasance. This includes activities such as fraudulent bookkeeping, illegal bribery, or other criminal activities that take place within a business. Such cases could potentially result in criminal charges against the business or its owners.
Conclusion
As the legal definition of malfeasance makes clear, businesses have a responsibility to act with integrity and take proactive steps to prevent and address any improper or illegal activities. Failing to do so could result in legal implications, and potentially criminal charges, for both the business and its owners. Companies can protect themselves from potential malfeasance by establishing clear policies and procedures, providing ongoing training, conducting regular audits, and taking swift action when any violations are discovered.