Key Issues to Consider While Reopening or Partially Reopening

Key Issues to Consider While Reopening or Partially Reopening

May 07, 2020

Client Alert

Brownstein Client Alert, May 7, 2020

As state and local governments relax their “stay-at-home” orders, businesses must look at how to revamp and reinvent their day-to-day operations to comply not only with a wide variety of new regulations, but also legal implications from existing laws and regulations. Often, these issues are overlapping and involve more than one area of law. Our Business Reopening Response Team has put together a list of issues for companies to consider as they start this planning process, including:

Employment and Benefits: There are many issues to consider when bringing employees back to work, including:

  • Handling worker health inquiries, tests and symptomatic employees: The near-term workplace norm includes wellness certifications, temperature screenings, inquiries about symptoms (e.g., whether an employee has lost his or her sense of smell, etc.), contact with others who may have symptoms and testing, as well as the myriad of issues regarding obligations arising if there is a symptomatic employee in the workplace.
  • Workplace safety and liability: There are many considerations related to workplace safety, including following recommendations of the CDC, EPA and OSHA, as well as state and local public health requirements and guidance regarding personal protective equipment and face coverings, cleaning protocols, social distancing, shared space use, and monitoring of employees and visitors upon entry into the facility, with special considerations for employees who are critical or frontline workers, visiting client sites or required to travel for work, among other considerations, in order to enhance safety and limit liability.
  • Expanded employer-paid leave and other leave obligations: The FFCRA provides new coronavirus-related paid sick leave and expands the Family and Medical Leave Act, and many states and localities have implemented their own paid sick leave requirements as a result of the crisis, which, combined with existing leave laws and employer-provided paid time off, create complicated interactions and new protected statuses.
  • Employees who decline to return to work: Whether an employer can force an employee to return to work involves various considerations, including ADA and state-antidiscrimination and reasonable accommodation obligations, NLRA concerns, workplace safety/whistleblower issues and potential unemployment reporting obligations.
  • Proper payments and reimbursements: Employers should ensure proper wage payments to their hourly workforces for safety screenings, donning and doffing, remote work, reimbursements for work-related expenses, and other issues under the FLSA and state law. For exempt employees, employers should be cognizant that adjustments to hours, duties and/or pay may impact the employee’s eligibility for the exemption.
  • Employee benefits: Return-to-work issues include how to credit service for pension benefits and contribution allocations; restarting 401(k), HSA and other salary deferrals; satisfying applicable nondiscrimination requirements in participation, coverage and benefits; transitioning group health and other welfare benefit plan coverage; collecting premiums that may be due; administering status changes; designing retention programs; incentivizing your workforce; considering changes to equity grants; adjusting performance-based criteria; analyzing the effect of furloughs and work arrangement changes on outstanding equity awards and phantom awards; and addressing IRC 409A issues.
  • Discrimination and adverse impact issues: As employers gradually resume operations, they should be mindful of possible adverse impact that the return-to-work and ongoing reduced workforce plans may have on workers in protected categories, including newly created protected categories such as COVID-19 or childcare-related issues or living with a “vulnerable” person.
  • Government-issued orders and guidelines: Employers must continue to closely monitor federal, state and municipal orders and recommendations regarding return-to-work guidelines and related issues (such as creating new classes of protected individuals and imposing other obligations on employers), which will be promulgated and revised on an ongoing basis for the foreseeable future.

Real estate: In order to comply with social distancing guidelines and ensure workplace safety, landlords and tenants will need to consider several issues, including:

  • Property operations: Reconfiguration of common areas, and implementation or modification of mechanical systems testing, security and health screening measures, janitorial specifications and other building rules and regulations.
  • Landlord/tenant relations and communications: Landlord and tenant messaging on reopening requirements, reporting positive cases and communication of changes in governmental orders.
  • Retail tenant changed operations: Curbside pickup areas, contactless payment options, distancing demarcations for customers, exchange and return logistics and inventory concerns.
  • Reopening requirements: Lease and loan document limitations on the flexibility to accommodate phased reopening and the ability for a tenant to remain closed after a governmental order allows the business to open.
  • Lease amendments addressing rent relief and operational changes: Updates to tenant leases with new COVID-19 and other applicable waivers and accommodations.

Liability mitigation: While much of the guidance given by federal, state and local entities requires further clarification, businesses should consider the following liability risks when reopening:

  • Premises liability: Duties to invitees and employees in mitigating their risk of coronavirus exposure on company property, including through implementing clear policies about how risk of exposure will be managed, and applying those policies consistently.
  • Privacy: Collecting health information from employees and invitees may trigger obligations under state and federal privacy laws related to how that information is maintained and used. Additionally, businesses need to be prepared for privacy issues related to contact tracing and possible governmental requests for employee and guest information.
  • Managing third parties: Contracts with vendors and suppliers to ensure that they are not taking on liability for risk of coronavirus exposure where the vendor or supplier is better positioned to manage the risk.
  • Disclosure related to risk mitigation: While businesses want to reassure their customers of the steps they are taking to minimize possible coronavirus exposure, they need to be careful about how they describe those measures so they don’t overstate their efficacy and risk false advertising claims. Businesses also need to know when and to whom they are obligated to disclose an exposure.
  • Insurance issues: The pandemic has raised numerous issues around insurance coverage, and businesses should know if and when business interruption, general liability, advertising, workers’ compensation, or even directors’ and officers’ policies could be triggered by issues around reopening.
  • Force majeure clauses: Businesses should be looking at contracts through the lens of the pandemic and gain an understanding of how clauses allowing for delayed or nonperformance may be construed going forward, particularly where many are predicting a potential resurgence of infections in the fall.
  • Enforceability of waivers: Waivers will be a critical tool for companies to manage liability when they reopen, but there are limitations on what liabilities can be waived and the extent to which disclaimers can offer protection.
  • Compliance liability: How to comply with government requirements for reopening, including following cleaning protocols and use of PPE, and to ensure you don’t inadvertently assume duties beyond what is required.

Communications plans: Businesses will also need to have:

  • Policies: Communications around new policies put in place to keep employees, customers, vendors and visitors safe
  • Plans: Internal and external plans around a new outbreak or exposure to COVID-19
  • Protocols: Develop and/or refine communications channels to keep target audiences updated as the situation evolves; media protocol for inquiries and on-site visits
  • Training: Media training for spokespeople
  • Materials: Update marketing materials for a COVID-19 world

Policy and Regulatory Advocacy: As the legal, regulatory and commercial implications of COVID-19 continue to evolve, companies may want to engage with policy professionals to assist with:

  • Exemptions to public health orders: Exemptions from the public health orders or requested modifications to existing orders based upon company circumstances
  • Risk analysis for operation outside of public health orders: Operations outside of the public health orders as well as associated risk
  • Public grants or loans: Eligibility for public grants or loans available to businesses impacted by COVID-19
  • Advocacy: Additional local, state and federal lobbying

Information is changing daily and some of the content included in this alert may have changed or been updated since publication.

Click here to read more Brownstein alerts on the legal issues the coronavirus threat raises for businesses.

This document is intended to provide you with general information regarding considerations for businesses reopening or partially reopening during the coronavirus pandemic. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.

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