Webinar: Top Legal Considerations During Unsettled Times

There are lots of uncertainties around the coronavirus and what will happen in the coming months. In the first installment of SFA’s webinar series, Brian Schneider, Alexandra Romero, James Westerlind from Arent Fox LLP provided some legal considerations for companies during these unsettled times.  

Contracts

When deciding whether or not it’s possible to void or terminate a contract, keep these things in mind:

• To void a contract, it must be objectively impossible to deliver on the agreed upon terms. A declaration of emergency or guidance from the CDC to stop group gatherings of a certain size is not enough.
• A government order to shelter-in-place, or a banning of public transportation may be grounds to void a contract.
• In the courts, companies have had traction not necessarily by saying the contract is impossible, but the deadlines are.
• Pay attention to force majeure clauses. Typically they list certain circumstances that would result in a contract termination. It’s rare to have pandemic listed under a force majeure clause, but many do have a provision for an “act of God,” which is undefined, but may apply to a pandemic.
• The most effective way to negotiate the termination of a contract is through honest, professional communication with both parties.

Employment Considerations

The administration is taking several steps to protect employees and employers.

• President Trump signed the Families First Coronavirus Response Act, which provides paid leave for employees, expands nutrition assistance and anti-hunger programs for students and seniors, and boosts unemployment assistance for displaced workers.
• This bill implements a public health emergency leave program under the Family and Medical Leave Act. This provision allows workers that have been on the job at least 30 days at government agencies and private organizations employ less than 499 people take leave to care for children under 18 whose school or daycare closes due to coronavirus, or whose child care is unavailable due to coronavirus.
  • The act would allow the first 10 days of leave to be unpaid but would allow the employee to concurrently use any paid vacation, personal, medical, or sick leave that they have previously accrued. After the tenth day of leave, eligible employers would be required to provide paid leave for each day an employee takes leave at a rate equal to 66.67 percent of their normal pay.
  • For employees with variable hours each week, paid leave would be equal to the average number of hours worked per day over the previous six months.
  • In addition, the bill requires governments and employers with 499 employees or fewer to provide paid sick time through December 31, 2020, if any employee is unable to work due to:
    • A government quarantine due to coronavirus
    • The experiencing of symptoms of coronavirus which require an examination or medical diagnosis
    • Advisement by a health care provider to self-quarantine due to concerns related to coronavirus
    • Caring for someone who is subject to government quarantine due to coronavirus, or who is experiencing symptoms of coronavirus, who needs an examination or medical diagnosis related to coronavirus
    • Caring for a child whose school/child care has closed due to coronavirus.

If an employee shows symptoms of or tests positive for coronavirus, employers should:

• Send them home immediately. All employees should be advised not to come to work if they feel ill, even if they have not been diagnosed.
• If an employee has tested positive, ask them who they have worked with in a close proximity (3 to 6 feet) in the past 14 days.
• Notify the employees that have been exposed and recommend they see a doctor. However, do not identify by name or other information who has been infected.
• It’s recommended to get a contractor to go in do a deep clean, especially on high touch areas.

OSHA recommended steps to reduce exposure:

• Remind employees to wash hands regularly
• Make sure hand sanitizer and other cleaning products are readily available
• Conduct regular cleanings of the office, high-touch points especially
• Send employees home if they are sick
• Readjust staffing levels to ensure people can maintain enough space between them
  • This can be done by reducing the number of employees per shift or staggering shifts
• Retailers can put up signs to instruct customers who are symptomatic to not enter the business
• Retailers can also use curbside pickup services to limit the amount of customers entering the business
• Some companies are taking employee temperatures before they begin their shifts

If an employee refuses to service a customer or work with an employee that is symptomatic:

• Under OSHA regulations, employees have a right to refuse dangerous work.
• In addition, requiring an employee to work in a situation where they don’t feel safe could reduce employee morale.
• Ask employees to notify a manager if they don’t want to be in contact with a symptomatic customer or employee. The manager can then use their own discretion on whether recruit another employee to help or ask the customer/employee to come back when healthy.

Insurance Coverage

• Contact your risk manager or broker to confirm your policies and coverages. Potentially coverage may include:
  • Business interruption/contingent business interruption. This applies if a facilities is shut down as a result of loss or damage to property, or if the company’s supply chain is interrupted.
  • Event cancellation insurance (though typically it excludes communicable diseases)
  • Travel insurance
  • Credit insurance
• Communicate with your broker and insurer to properly document your claims
  • Find out what information they need
  • Let them know a claim may be coming down the pike
  • Get all the right people involved to make sure all documentation is included

Related: Grocers Take Precautions to Limit Coronavirus Spread; Almost Half of Retailers Expect Revenue Implications from Coronavirus Outbreak.

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