These decisions may include financial matters like budgeting, capital investments, and major expenses; strategic choices like business direction, expansions, or partnerships; legal commitments such as signing contracts or entering into new obligations; and hiring or firing key personnel. Any decision that could significantly affect the business’s operations, liabilities, or long-term goals should not be made without the knowledge and agreement of all partners.

When a business partner begins making key decisions without the other partner’s involvement or input, it can be disadvantageous both for the business and the other partner, and may lead to potential legal issues. If you are facing this situation, it is essential to understand your rights and take appropriate steps to address the problem. An experienced Pittsburgh partnership disputes attorney can explain the legal options for your business and provide you with the skilled representation you need to protect your rights and interests.

Importance of Quickly Addressing Decision-Making Conflicts 

• Prevention of Escalation: Dealing with decision-making conflicts swiftly in a business partnership can prevent small issues from growing into larger disputes that may jeopardize the partnership and the business’s stability.
• Maintaining Trust: Quick resolution of conflicts helps preserve trust between partners, reinforcing a collaborative environment where open communication is encouraged.
• Protecting Business Interests: Timely intervention protects the business's operational integrity, avoids financial loss, and ensures that decisions of the business partners align with the agreed-upon goals and strategies.

Identify the Problem Before it Causes More Damage

Signs Your Business Partner is Making Decisions Without You 

If you suspect that your business partner is making decisions without your input, it is important to be vigilant about certain signs or indicators. Here are some common warning signs:

Lack of Communication

• Unexplained absence of updates: You stop receiving updates on important business matters or decisions.
• Delayed or vague responses: Your partner takes longer to respond to your queries or provides vague answers when asked about business activities.
• Meetings without your knowledge: You learn about meetings, negotiations, or discussions that happened without your involvement or knowledge.

Unilateral Actions

• New initiatives or projects: You discover new business ventures, projects, or strategies implemented without your approval or even awareness.
• Changes in contracts or agreements: Contracts are signed, or significant changes to agreements are made without your input.
• Hiring or firing decisions: New employees are hired, or current staff are let go without your consent.

Financial Red Flags

• Unexplained financial transactions: You notice unusual withdrawals, expenditures, or movements of funds without prior discussion.
• Bank account access issues: You are suddenly denied access to financial accounts or see transactions you did not authorize.
• Suspicious invoices or expenses: There are expenses that don’t align with previously discussed plans or purposes.

Lack of Transparency

• Withholding key documents: Your partner avoids sharing important documents, such as contracts, financial reports, or business proposals.
• Avoidance of joint decision-making: They consistently avoid making decisions together or deflect when you raise concerns.
• Secret meetings or communications: They engage in secretive communications with clients, suppliers, or legal representatives without informing you.

Changes in Company Direction

• Shift in business strategy: You notice a shift in the company's vision, mission, or goals that you never agreed upon.
• Unplanned expansions or cutbacks: The business starts expanding, downsizing, or altering its structure in ways you had not previously discussed.

Third-Party Involvement

• Clients or vendors approach you with questions: Clients, vendors, or other third parties reach out to you with questions about decisions or agreements you weren’t aware of.
• Legal issues surface: Legal matters arise that you were not consulted on, such as lawsuits, contracts, or compliance issues.

Exclusion from Key Activities

• Exclusion from meetings: You are excluded from key meetings with stakeholders, investors, or employees.
• Limited involvement in decision-making: Your role in decision-making is diminished, and your opinions are overlooked or dismissed.

Potential Reasons Behind Their Actions 

Your partner may be taking unilateral actions due to time pressure, a misunderstanding of your role, a desire for control, or personal ambitions that conflict with your partnership. Notably, time pressure in a business partnership may arise when urgent decisions need to be made to capitalize on opportunities or address immediate challenges, such as securing a contract or responding to a market shift. If one partner feels the need to act quickly and perceives delays in consulting the other, they may take unilateral actions to avoid missing an important deadline or business advantage.

Review Your Partnership Agreement

The first important step is to review your partnership agreement as this document outlines the roles and responsibilities of each partner. Most agreements will specify how decisions are made and the level of authority each partner holds. If your partner is violating the terms of the agreement by making unilateral decisions, this can serve as the foundation for your legal claims.

If no formal partnership agreement exists, Pennsylvania law defaults to the Uniform Partnership Act (UPA), which assumes partners share equal control over decision-making unless otherwise agreed.

Open a Line of Communication

In many cases, a breakdown in communication can lead to misunderstandings. Start by having a candid conversation with your business partner about your concerns. Express how their unilateral decision-making is affecting the business and your partnership.

• Approaching the Subject with Your Partner: It is essential to address the issue calmly and privately. Frame the conversation in a way that emphasizes collaboration and your shared goals, rather than accusations.
• Effective Communication Techniques: Use active listening, stay open-minded, and focus on finding solutions together. Avoid a confrontational tone and express how their actions are affecting your role in the business.
• Setting Up Regular Check-Ins or Meetings: To prevent future issues, establish regular meetings where all major decisions are discussed openly. This keeps both partners accountable and ensures a collaborative decision-making process.

Seek Professional Negotiation through an Attorney 

If direct communication does not resolve the issue, engaging in professional negotiations with representation from a seasoned Pittsburgh partnership disputes lawyer can be an effective tool. A dedicated lawyer will facilitate meaningful and productive discussions between partners to reach a mutual agreement. This process can help preserve the business relationship while addressing the core issues without the need for litigation.

Explore Legal Remedies Under Pennsylvania Law

If your partner's actions continue to harm the business or violate the partnership agreement, you may need to pursue legal remedies with help from your Pittsburgh partnership disputes lawyer. Under Pennsylvania law, you have these options:

• Seek Injunctive Relief: If your partner is making unauthorized decisions that could cause irreparable harm or the business partner pushes you out, you can file for an injunction to temporarily halt their actions.
• Claim for Breach of Fiduciary Duty: Pennsylvania law imposes a fiduciary duty on partners, which means they must act in the best interest of the business and each partner. If one business partner is acting in bad faith or for personal gain, you can file a breach of fiduciary duty claim.
• File a Lawsuit for Breach of Contract: If your partnership agreement has been violated, you may file a lawsuit for breach of contract. This could allow you to seek damages or dissolution of the partnership.

Seek Partnership Dissolution as a Last Resort

In some situations, the best solution may be to dissolve the partnership altogether. In Pennsylvania, partnerships can be dissolved voluntarily by mutual agreement or involuntarily through court action. If you can no longer trust your partner or the business relationship has become irreparably damaged, dissolution may be necessary.

• Voluntary Dissolution: If both partners agree to dissolve the partnership, you can file the necessary paperwork with the Pennsylvania Department of State and settle debts, liabilities, and assets.
• Involuntary Dissolution: If one partner refuses to dissolve the business, you may petition the court for dissolution if you can prove that your partner’s actions are detrimental to the company or violate legal obligations.

Measures to Prevent Decision-Related Conflicts in a Partnership

• Creating a Decision-Making Framework in Your Partnership Agreement: Draft or amend your partnership agreement to clearly outline how decisions will be made, including the types of decisions that require both partners' approval.
• Establishing Clear Role Definitions and Responsibilities: Define each partner’s role within the business, clarifying the specific duties and decision-making authority to avoid ambiguity.

Steps Very Law Will Take to Protect Your Interests in a Partnership Dispute Over Decision-Making

Review the Partnership Agreement

At Very Law, Pittsburgh partnership disputes attorney Ryan D. Very will start by carefully analyzing your partnership agreement, examining its clauses related to decision-making, profit-sharing, partner roles, and buyout agreement. This helps to determine whether your partner’s actions violate any agreed-upon terms. If no formal agreement exists, he will assess your situation based on Pennsylvania’s partnership laws to clarify your legal standing.

Identify Potential Breaches and Areas of Concern

Attorney Very will identify areas where your partner may have breached the agreement, such as making unilateral decisions or excluding you from important matters. He will look for violations such as unauthorized contracts, financial decisions without your input, engaging in a business venture in a direct breach of the partnership agreements, privately entering into a royalty agreement detrimental to your interests, or attempting to limit your role in the business.

Prepare Detailed Documentation and Evidence

Gathering concrete evidence is essential. Pittsburgh business attorney Ryan Very will help you compile key documentation and evidence to establish your position. This may include emails, financial records, business documents and contracts, employee testimony, and other proof. This evidence may show your partner’s unilateral decisions, the partner ignoring you in key matters, violating the operating agreement or making deliberate efforts to push you out. 

Negotiate with the Other Partner

Ryan Very will assertively negotiate with your partner on your behalf, clearly outlining your legal rights as a co-owner. He will emphasize the consequences of ignoring your rights, such as potential legal action and the damage it could cause to the business. The first goal of his legal representation in these cases is to restore balance in decision-making and prevent further conflicts with the other party.

Business Litigation, if Necessary

If negotiations fail, Pittsburgh business lawyer Ryan Very is prepared to take the case to court, seeking compensation for any financial damage, enforcement of your partnership rights, or, in exceptional cases, dissolution of the partnership. He will aim to protect your interests while minimizing disruption to the business. 

To schedule your confidential consultation with our legal team, call us at 412-424-6199 or contact us online.