COVID-19 Resource Page

COVID-19 Resource Page

Text: 

About Our Law Firm's COVID-19 Resources

Saul Ewing Arnstein & Lehr’s multi-disciplinary COVID-19 Task Force and resource page guides clients through the varied legal and business challenges related to the COVID-19 virus. Our Task Force is comprised of partners, associates and law firm professionals who are carefully monitoring this crisis and assessing the impact on our clients and their industry sectors, as outlined below.

Please send any time-sensitive inquiries to our law firm's Task Force at COVID-19@saul.com.  We hope you find these resources useful during this difficult and uncertain time.

Core Issues
Business Continuity Planning
Boards and senior management of an organization should have a documented plan that takes into consideration the spectrum of risks posed to their organization by a crisis, such as COVID-19. It's not too late to implement good planning for immediate needs and for the future. In developing a plan, organizations should take the following steps.
  • Evaluate the company’s internal controls and risk management to ensure that not only are plans in place to mitigate a crisis, but that management has taken steps to ensure that the plans are current and responses have been simulated (within reason) in preparation for a crisis.
  • Identify a “Business Continuity Team.” In many cases, senior leadership of an organization will make up this team. However, in times of a quickly evolving crisis, organizations should also identify (1) a direct channel to the board of directors, as well as a cross-section of constituents within an organization, and (2) outside advisors to keep communication channels clear regarding evolving risks, initiating the Business Continuity Plan to address those risks, controlling external messaging, and measuring the effectiveness of the Plan. The Business Continuity Team should take the lead on internal and external communications, including identifying a spokesperson who will speak on behalf of the company.
  • Craft a high-level Business Continuity Plan that:
    • can be summarized in a page or less;
    • includes the primary Business Continuity Team contacts; and
    • outlines action items in the event of a crisis that develops quickly.
  • Craft a comprehensive Business Continuity Plan to include:
    • robust planning regarding key aspects of the business, such as:
      • departmental planning;
      • critical systems;
      • stakeholder impact;
      • fulfillment;
      • finance; 
      • legal; and
      • supply chain and customer impact.
    • These key aspects should be owned by the respective departments, which should report to the Business Continuity Team as long as the crisis is deemed to exist.
    • The Business Continuity Plan should further include contingency planning that identifies when third parties need to be notified of critical decisions made by the company.
  • Pay close attention to company messaging and work with outside legal counsel to craft the messaging.
    • Public Companies, which have the duty to inform, should plan for press releases and regular and periodic filings with the SEC, including action items by the company to address risks and the impact to shareholders.
    • Private Companies, while not necessarily in plain view of the public markets, may confront the same needs to properly communicate company decisions to its stakeholders, particularly for companies that have a substantial impact in specialized markets, smaller communities, or those that provide critical products and services to the public.
  • Educate key stakeholders in your organization on your Business Continuity Plan.
  • Collect lessons learned across your entire organization now, assess them, and determine how they can best contribute to your company rebounding from the current crisis and preparing for the next one.
  • Determine how your organization is best positioned to avoid risks throughout the rest of the year.
Cybersecurity and Privacy

The COVID-19 crisis is expanding cybersecurity and data privacy risks for organizations in two important ways: 

  1. Cyber criminals are taking advantage of this crisis to launch phishing campaigns intended to lure email users into clicking on malicious links that appear to be legitimate information from public health officials and other news sources. These targeted, topical campaigns can pose a high risk of hackers gaining unauthorized access to user credentials, sensitive company information, protected personal data or financial information; embedding harmful ransomware; and carrying out a business email compromise attack.  
  2. As organizations shift staff to remote work as part of their overall COVID-19 response, there is a heightened risk that employees may handle information outside of secure channels, increasing the risk of unauthorized disclosures of information that must be protected under various privacy laws, and that cyber actors may gain access to the organization’s data or systems. 

With that in mind, some of the specific steps organizations may wish to take include the following:

  • Evaluate cybersecurity and remote work policies to determine whether any revisions are necessary.
  • Provide employees company-issued laptops and devices for remote work, when possible.
  • Provide employees with a refresher training on:
    • the company’s policies for remote work;
    • data privacy, including transferring data securely and encrypting data on all portable storage devices (USB drives, external hard drive);
    • secure data destruction (shred paper documents or return paper documents to the office when they return from remote work); and 
    • the procedure for notifying the company of a suspected data or network compromise.
  • Ensure your organization’s officers and leadership team are fully trained. These are often the people most heavily targeted in spear-phishing campaigns, and busy executives are also at risk of making errors – of clicking on a malicious link or attachment, or not recognizing a suspicious email address – because they are trying to juggle so many competing demands. This is particularly true when they are handling core business functions from a smartphone.
  • Notify employees that they should be on high alert for increased phishing attacks. 
    • Employees should verify the email address of the sender, especially in emails relating to authorization of expenses, funds transfers, any payment of money, financial account information, payroll information, and other sensitive data.
    • If not already in place, consider implementing an external warning banner that identifies emails sent from an external sender. This warning banner is a particularly useful reminder to verify the sender’s email address when employees view and respond to work email in the condensed format on their mobile devices.
  • Advise employees to remove any smart speaker devices from their remote or home office that “listen” to conversations for activation commands. Lawyers should be particularly attune to the risk of unintentionally waiving attorney-client privilege. 
  • Provide employees with a secure internet connection (hot spots) to avoid the use of unsecured Wi-Fi networks, or ensure employees’ home networks are secure.
  • Ensure that all remote employees have access to IT support to ensure company policies are followed.
  • Implement procedures to avoid the loss of data due to transfers outside the network. Caution employees against sending data, especially sensitive data, to their personal email account or personal cloud storage in order to transfer data onto their laptops. 
  • Recommend that employees do not leave devices in cars to mitigate the risk of theft and possible breach of personal data.
  • Limit the amount of personal information and personal health information sent via email. Provide HR and employees with a secure means of transmitting sensitive information.
Distribution and Supply Considerations
  • Consider evaluating alternative supply sources, if applicable. Even if shipments have not yet been delayed, anticipate that delays could occur, particularly food, drug and medical device products and agricultural commodities.
  • Expect that retail partners will continue to ask questions regarding treatment of products for COVID-19. 
    • Reliance on CDC guidelines (e.g., how long COVID-19 remains on an inanimate object) can be helpful, but testing of products could become required by stakeholders.
    • It would be prudent to evaluate incoming raw ingredients, components, and finished product testing procedures to ensure they are adequate to protect against COVID-19, and consider engaging third-party testing firms to provide further assurance of product safety.
  • E-commerce platforms must remain vigilant for anti-consumer practices like price-gouging. Active monitoring of comparable pricing would be well-advised (e.g., internal controls to alert personnel to sanitizer products that are five-to-ten times more expensive as fellow brands).

 

Employee Benefits
  • Any group health plan coverage offered to your employees must provide cost-free COVID-19 testing and diagnosis services, including the cost of any testing kit. Cost-free means no deductible, no co-payment and no co-insurance. In addition, the plan cannot impose prior authorization or other managed care requirements before the services are provided.
  • Remember plan sponsor limitations on the receipt and use of protected health information (PHI) from an employer-sponsored group health plan, which is a “covered entity” under the Health Insurance Portability and Accountability Act (HIPAA). Generally, unless there is an exception under HIPAA, or an employee authorization for the release of information, protected health information cannot be shared. If information about an employee’s COVID-19 status does not come from the group health plan, HIPAA will not apply, but there may be implications under state privacy laws. If an employer receives information about the COVID-19 status of an employee’s family member, the Genetic Information Nondiscrimination Act (GINA) may apply.
  • Effective April 2, 2020, the Families First Coronavirus Response Act (the “Act”) requires private employers with less than 500 employees (or a non-private entity with one or more employees) to provide paid family and sick leave, with daily and aggregated limits per employee. You are permitted to take a credit against your payroll taxes for paid leave required by the Act as well as costs incurred to provide health care coverage to employees who receive this paid leave. More guidance is needed as to the logistics of claiming the tax credit and coordinating the Act’s paid leave requirements with other paid time off you already provide to your employees or must provide under state or local sick pay laws.
  • For employees who cannot work (including telework), a reduction in hours or termination of employment resulting in a loss of health care coverage triggers Consolidated Omnibus Budget Reconciliation Act (COBRA) rights (for those employers subject to federal COBRA or state mini-COBRA laws). COBRA notices should be timely distributed. For large employers subject to the employer-shared responsibility requirements of the Affordable Care Act (ACA), any impacted employee in an ACA stability period, must be offered employee-only affordable (i.e., employer subsidized) COBRA coverage or the employer risks the imposition of Internal Revenue Service (IRS) penalties. An employer should make certain COBRA notices are timely distributed and that costs charged for employee-only coverage is affordable, if required by the ACA.
  • Make certain terminated employees with coverage under any insured program with a conversion option, such as LTD and life insurance, are timely provided with conversion notices.
  • A number of issues may arise under employer-sponsored 401(k) plans, including: loan repayments and defaults; and requests for hardship withdrawals. A participant reduction in a 401(k) plan of 20 percent or more due to employer action may constitute a partial plan termination (depending on facts and circumstances) requiring full vesting of all affected employees, including previously non-vested terminated employees who have not had a break in service.
  • Absent legislative relief, the current low interest rates and falling values of plan assets will create a “perfect storm” for defined benefit plan funding levels and required contributions. As with 401(k) plans, a participant reduction of 20 percent or more due to employer action may constitute a partial termination, requiring full vesting.
  • If you contribute to a multiemployer pension plan, a reduction in force could trigger a partial withdrawal liability assessment by the fund, if your “contribution base units” have also reduced during the past two years.
Financial Restructuring
  • Review your credit facility to refresh your understanding of financial covenant requirements that may be at issue or subject to potential default in light of resulting business interruption and challenges. If there are any that present a concern, be prepared to discuss them with your lender in an effort to reach an understanding as to a waiver of the covenant requirement, a modification of the covenant benchmark or a forbearance agreement to clarify that an exercise of remedies will not be pursued.
  • Consider potential customer financial challenges and the possibility of delayed or reduced invoice payments or no payments for an extended period of time. Working with counsel, explore potential rights under the customer agreement and/or the Uniform Commercial Code to alter current payment terms and, possibly, seek adequate assurance of future performance in accordance with the UCC.
  • Review critical product supply agreements to determine remedies available if the supplier’s performance is hindered or delayed in light of conditions resulting from COVID-19 (such as the inability to receive product). Remedies (such as seeking an alternative supplier, or “covering” for increased price of the alternative goods sourced or that are available in such a situation as provided under the UCC and potentially under the supply contract and contractual remedies) should be considered and planned for.
  • Revisit cash flow projections and business plans to determine the potential need to modify current spending plans. Most importantly, communicate any such issues with your lender, as appropriate and keep a clear line of communication open going forward.
  • Be vigilant in terms of a potential increased risk of fraud in light of potential business strains and customer and supplier financial challenges.
  • Be mindful of how lenders in your specific industry may be responding to the situation and changing marketplace and be prepared to address misconceptions.
  • For those in the health care industry (particularly long-term care facilities), be sensitive and mindful of increased risk of financial challenges in light of requirements issued by regulatory agencies and the ability to address these from current liquidity. If current liquidity is not sufficient, be proactive in your outreach to resources to address this shortfall in an effort to avoid potential future litigation.
  • Many business contracts (loans, leases, purchase orders, etc.) will be renegotiated and modified as a result of the impact of these unprecedented events on parties’ ability or willingness to perform their existing obligations. If you are planning to restructure debt facilities or other business arrangements, you need to be mindful of the fact that modifications of certain types of binding agreements can have significant tax implications (such as cancellation-of-indebtedness income in the case of a loan). In addition, transactions that have already been consummated cannot necessarily be “undone” (rescinded) without adverse tax consequences.

General Contracting

Existing contracts should be reviewed to determine how the COVID-19 pandemic may affect the obligations and performance of each contract party.

  • Consider whether the COVID-19 pandemic constitutes a force majeure event and whether to declare an event of force majeure.
    • Review the contractual requirements for declaration of force majeure, and be aware that contractual force majeure provisions are often narrowly construed under applicable state law. A review of relevant state case law may be necessary.
    • Consider the contractual implications of a declaration of force majeure. Are other contract provisions triggered, such as the right of the other party to terminate or an obligation of the declaring party to mitigate damages?
    • Be aware of the potential consequences of an improper declaration of force majeure. Could it be considered a repudiation of the contract that might give the other party a cause of action for breach?
  • If the COVID-19 pandemic does not qualify as a force majeure event, determine whether any other contractual or common law defenses to performance may apply.
    • Consider whether the COVID-19 pandemic constitutes a “material adverse change” or would have a “material adverse effect” under the contract provisions.
    • Consider whether defenses such as “frustration of purpose” or “impossibility” may be applicable. Again, these common-law doctrines are narrowly applied, and a review of relevant state case law may be necessary.
  • Review performance-related contract requirements to determine whether they may be implicated.
    • Consider whether contractual dates for performance can be met. If performance is likely to be affected by the COVID-19 pandemic, be aware of requirements for giving notice of potential delays. 
    • Be aware of the consequences of a default or termination precipitated by the COVID-19 pandemic, including remedy and dispute resolution provisions.

New or pending contracts should be drafted or revised to include protections from consequences of the COVID-19 pandemic.

  • Force majeure provisions should include as force majeure events epidemics, pandemics and “public health events of international concern (PHEIC)” as well as supply chain delays.
  • Although force majeure provisions may already designate change of law or regulation as force majeure events, governmental actions or orders (such as imposition of quarantines or travel bans) should also be included.
  • The party more likely to be affected by the COVID-19 pandemic should consider inclusion of other protections, such as extension of performance periods due to delays beyond the party’s reasonable control.
Labor and Employment
  • For businesses reopening, conduct necessary employee health and safety planning to comply with federal and state safety and health standards and to help mitigate risks. Review available information and guidance with the goal of creating a reasonable plan that can and will be followed.
  • For businesses reopening, review and update employment policies to ensure they are consistent with current public health recommendations and inform employees of changes prior to reopening.
  • Determine a strategy for responding to employees who resist returning to the workplace to ensure compliance with federal and state anti-discrimination laws, leave laws such as the Families First Coronavirus Response Act, and state and local COVID-19 orders.
  • Consider all applicable federal, state and local laws governing when and how employers can inquire about employee medical conditions or disabilities, including the ADA and FMLA.
  • Consider all applicable federal and state wage and hour laws to determine which employees are entitled to payment during non-working hours.
  • For unionized workforces, review the CBA terms regarding management rights during emergencies, and consult and/or bargain with union representatives to implement new disease prevention plan protocols.
Litigation

Active/Pending Litigation

  • Prepare a list of deadlines over the next three-to-six months for active litigation that may be impacted due to travel restrictions or limitations. Consider requesting modifications to those deadlines and/or scheduling orders as early as possible. Be proactive regarding the potential need for continuances for hearings and/or trials.
  • Consider any needs to preserve testimony and evidence and proactively move to do so. Ensure that litigation holds are maintained and that no electronically stored information or other evidence is lost.
  • Consider potential delays in responding to discovery requests if IT systems and/or witness availability are impacted.
  • Consider telephone/video conferences as opposed to in-person appearances in court or at mediation. Follow updates and guidance from federal and state courts, administrative agencies, and other agencies regarding changes for in-person court appearances, court-ordered mediation, administrative hearings, appointments with incarcerated clients, etc. Consider the need to conduct remote depositions through secure mobile videoconferencing platforms offered by court reporters.
  • Maintain ongoing communication between counsel and clients, including remaining apprised of the relevant COVID-19 response plans of each. Prepare for the possible unavailability of witnesses, support staff, court staff, opposing counsel and e-discovery vendors as well as the resulting delays and impacts to active litigation and upcoming deadlines.

Potential Litigation

  • Consider litigation implications related to existing contracts, such as notice, anticipatory breach, force majeure, frustration, etc.
  • Proactively reach out to parties regarding existing contracts to address possible disruptions to contract performance.
  • Consider entering into tolling agreements in the event that the commencement of litigation needs to be delayed.

 

Real Estate

Construction/Development

  • Be aware of construction shutdown orders and reopening notices in your jurisdiction.
  • Be aware of potential threats to the availability of materials resulting from manufacturing shutdowns or slowdowns and supply chain disruption.
  • Where construction has been disrupted, consider seeking modifications in performance or delivery times.
  • If seeking (or opposing) an excusable delay, check force majeure clauses. 
    • Determine if the pandemic is an event that falls under the clause. Some clauses broadly excuse performance for “events beyond the control” of the parties. Other clauses are not as broad, and the party seeking an excusable delay may have to rely on specific examples (e.g., unavailability of materials and governmental actions).
    • Ascertain if the party seeking relief is required to mitigate effects and/or is responsible to give the other parties (owner and/or lender) notice of the event or intention to claim force majeure.
  • Seek alternative sources for materials. Some construction contracts permit the contractor to substitute materials if the specs call for materials not available because of the pandemic.

Multi-Tenanted Properties

  • Determine whether you want building management and tenants to exclude any category of people or to require employees to work remotely.
  • Check for alignment with current CDC advice to assure that intended policy does not have a discriminatory effect.
  • Ascertain whether a lease permits issuance of rules/regulations requiring tenants to comply with new policy. 
  • Check notice provisions and assure that policy does not discriminate against any class of tenant.
  • Ascertain if denying access to tenants or their guests may give rise to rent abatement claims.

General Real Estate Sector

  • Anticipate an increasing number of lease and loan defaults caused by deteriorating economic conditions.
  • Check covenants to ascertain whether severe economic downturn excuses or delays payments or performance.
  • Force majeure clauses do not usually excuse performance based on economic conditions, but other theories, such as impossibility of performance or commercial frustration may apply.
  • Consider the likelihood of delays or cancellations of transactions if employees are required to work remotely and do not have access to full resources needed for carrying out transactions.
  • Common sense and reasonable business solutions help mitigate loss and solve most problems related to the pandemic. Being proactive, clearheaded and reasonable under the circumstances will be appreciated and remembered.
Risk Assessment and Management/Negligence Litigation
  • Perform due diligence before distributing products not only by maintaining good manufacturing practices but also by incorporating the public health guidance from the FDA, CDC, CPSC, FTC and local health authorities into operations.
  • Assess the potential for increased risk associated with products in the current environment and review and update associated documents, such as warranties and instructions for use where needed.
  • Assess potential for increased risk associated with business operations in the current environment and the need to demonstrate compliance with general tort principles, such as the exercise of reasonable care toward others. 
Tax
  • Be sure you understand all tax filing and payment deadlines, some (but not all) of which have been extended in light of the current COVID-19 situation. While the deadline for federal income tax returns and federal income tax payments (including estimated tax payments) otherwise due on April 15 have been extended to July 15, the same is not true for all taxes (including some payroll taxes and state and local income taxes, as well as federal income taxes of taxpayers that do not have an April 15 due date). To the extent there is any doubt about automatic extensions, plan to file for extensions under regular procedures, electronically if possible.
  • With the decline in global market valuations, you may have opportunities to transfer assets in taxable transactions with a much lower tax bill. Now would be a good time to review whether any such transfers make sense.
Trusts and Estates
  • During your time at home, this is an opportunity to review your personal estate planning. Do your personal documents (Durable Powers of Attorney, Advance Medical Directive, Will, and Revocable Trust) reflect your current wishes and name the people you want to handle your financial and medical affairs and manage your estate after death? Do the beneficiary designations of your retirement accounts and life insurance policies coordinate with your other planning?
  • Are you the beneficiary or settlor of an irrevocable trust? Does the trust contain provisions that you believe should be modified, whether because of changes in tax laws or changes in personal circumstances? Many states now permit irrevocable trusts to be modified, and now may be the time to find out whether trust modification is appropriate.
  • Your portfolio or the value of your business may have taken a beating. But if you believe the future holds promise and that the value of your investments or your business will recover, whether in a year or in five years, now is the time to focus on planning. There are many planning tools that can help mitigate taxes in the future. Given today’s very low interest rates and stock market volatility, now would be a great time to take advantage of many of these tools.
Force Majeure
  • Consider why force majeure may need to be invoked, i.e., what specifically is causing an impact on the party’s ability to perform under the contract.
  • Examine whether the event identified above is specifically enumerated in the force majeure provision or whether it would fall under any relevant “catch-all” language.
  • Examine other provisions in the contract that could be relevant to a force majeure analysis, such as dispute resolution procedures, choice of law/jurisdiction/venue, termination, statements that time is of the essence, and provisions limiting damages or setting liquidated damages.
  • Consider the law of the jurisdiction governing the contract to determine how that jurisdiction may interpret the relevant contractual provisions given the facts of the case.
  • Understand the mechanics for invoking force majeure, such as the timing and manner in which notice of the force majeure event must be provided to the counterparty.
  • Determine whether invoking force majeure results in a temporary suspension or permanent cancellation of obligations under the contract.
  • Remain cognizant of post-invocation obligations, including duties to mitigate damages and/or requirements to attempt to perform despite the force majeure event.
  • Consider whether a non-contractual commercial solution is available that may help avoid litigation.
  • Consider the effect of invoking force majeure on obligations under other contracts, such as bank loans or asset purchase agreements.
  • Consider whether any common law doctrines, such as impracticability/impossibility and frustration of purpose, are available instead of or in addition to force majeure.
  • Preserve relevant evidence, such as documentation of performance history prior to the force majeure event and all communications with the opposing party.
  • Avoid creating harmful evidence, such as unnecessary non-privileged communications regarding the contract and/or performance obligations.
Business Continuity Planning
Boards and senior management of an organization should have a documented plan that takes into consideration the spectrum of risks posed to their organization by a crisis, such as COVID-19. It's not too late to implement good planning for immediate needs and for the future. In developing a plan, organizations should take the following steps.
  • Evaluate the company’s internal controls and risk management to ensure that not only are plans in place to mitigate a crisis, but that management has taken steps to ensure that the plans are current and responses have been simulated (within reason) in preparation for a crisis.
  • Identify a “Business Continuity Team.” In many cases, senior leadership of an organization will make up this team. However, in times of a quickly evolving crisis, organizations should also identify (1) a direct channel to the board of directors, as well as a cross-section of constituents within an organization, and (2) outside advisors to keep communication channels clear regarding evolving risks, initiating the Business Continuity Plan to address those risks, controlling external messaging, and measuring the effectiveness of the Plan. The Business Continuity Team should take the lead on internal and external communications, including identifying a spokesperson who will speak on behalf of the company.
  • Craft a high-level Business Continuity Plan that:
    • can be summarized in a page or less;
    • includes the primary Business Continuity Team contacts; and
    • outlines action items in the event of a crisis that develops quickly.
  • Craft a comprehensive Business Continuity Plan to include:
    • robust planning regarding key aspects of the business, such as:
      • departmental planning;
      • critical systems;
      • stakeholder impact;
      • fulfillment;
      • finance; 
      • legal; and
      • supply chain and customer impact.
    • These key aspects should be owned by the respective departments, which should report to the Business Continuity Team as long as the crisis is deemed to exist.
    • The Business Continuity Plan should further include contingency planning that identifies when third parties need to be notified of critical decisions made by the company.
  • Pay close attention to company messaging and work with outside legal counsel to craft the messaging.
    • Public Companies, which have the duty to inform, should plan for press releases and regular and periodic filings with the SEC, including action items by the company to address risks and the impact to shareholders.
    • Private Companies, while not necessarily in plain view of the public markets, may confront the same needs to properly communicate company decisions to its stakeholders, particularly for companies that have a substantial impact in specialized markets, smaller communities, or those that provide critical products and services to the public.
  • Educate key stakeholders in your organization on your Business Continuity Plan.
  • Collect lessons learned across your entire organization now, assess them, and determine how they can best contribute to your company rebounding from the current crisis and preparing for the next one.
  • Determine how your organization is best positioned to avoid risks throughout the rest of the year.
Cybersecurity and Privacy

The COVID-19 crisis is expanding cybersecurity and data privacy risks for organizations in two important ways: 

  1. Cyber criminals are taking advantage of this crisis to launch phishing campaigns intended to lure email users into clicking on malicious links that appear to be legitimate information from public health officials and other news sources. These targeted, topical campaigns can pose a high risk of hackers gaining unauthorized access to user credentials, sensitive company information, protected personal data or financial information; embedding harmful ransomware; and carrying out a business email compromise attack.  
  2. As organizations shift staff to remote work as part of their overall COVID-19 response, there is a heightened risk that employees may handle information outside of secure channels, increasing the risk of unauthorized disclosures of information that must be protected under various privacy laws, and that cyber actors may gain access to the organization’s data or systems. 

With that in mind, some of the specific steps organizations may wish to take include the following:

  • Evaluate cybersecurity and remote work policies to determine whether any revisions are necessary.
  • Provide employees company-issued laptops and devices for remote work, when possible.
  • Provide employees with a refresher training on:
    • the company’s policies for remote work;
    • data privacy, including transferring data securely and encrypting data on all portable storage devices (USB drives, external hard drive);
    • secure data destruction (shred paper documents or return paper documents to the office when they return from remote work); and 
    • the procedure for notifying the company of a suspected data or network compromise.
  • Ensure your organization’s officers and leadership team are fully trained. These are often the people most heavily targeted in spear-phishing campaigns, and busy executives are also at risk of making errors – of clicking on a malicious link or attachment, or not recognizing a suspicious email address – because they are trying to juggle so many competing demands. This is particularly true when they are handling core business functions from a smartphone.
  • Notify employees that they should be on high alert for increased phishing attacks. 
    • Employees should verify the email address of the sender, especially in emails relating to authorization of expenses, funds transfers, any payment of money, financial account information, payroll information, and other sensitive data.
    • If not already in place, consider implementing an external warning banner that identifies emails sent from an external sender. This warning banner is a particularly useful reminder to verify the sender’s email address when employees view and respond to work email in the condensed format on their mobile devices.
  • Advise employees to remove any smart speaker devices from their remote or home office that “listen” to conversations for activation commands. Lawyers should be particularly attune to the risk of unintentionally waiving attorney-client privilege. 
  • Provide employees with a secure internet connection (hot spots) to avoid the use of unsecured Wi-Fi networks, or ensure employees’ home networks are secure.
  • Ensure that all remote employees have access to IT support to ensure company policies are followed.
  • Implement procedures to avoid the loss of data due to transfers outside the network. Caution employees against sending data, especially sensitive data, to their personal email account or personal cloud storage in order to transfer data onto their laptops. 
  • Recommend that employees do not leave devices in cars to mitigate the risk of theft and possible breach of personal data.
  • Limit the amount of personal information and personal health information sent via email. Provide HR and employees with a secure means of transmitting sensitive information.
Distribution and Supply Considerations
  • Consider evaluating alternative supply sources, if applicable. Even if shipments have not yet been delayed, anticipate that delays could occur, particularly food, drug and medical device products and agricultural commodities.
  • Expect that retail partners will continue to ask questions regarding treatment of products for COVID-19. 
    • Reliance on CDC guidelines (e.g., how long COVID-19 remains on an inanimate object) can be helpful, but testing of products could become required by stakeholders.
    • It would be prudent to evaluate incoming raw ingredients, components, and finished product testing procedures to ensure they are adequate to protect against COVID-19, and consider engaging third-party testing firms to provide further assurance of product safety.
  • E-commerce platforms must remain vigilant for anti-consumer practices like price-gouging. Active monitoring of comparable pricing would be well-advised (e.g., internal controls to alert personnel to sanitizer products that are five-to-ten times more expensive as fellow brands).

 

Employee Benefits
  • Any group health plan coverage offered to your employees must provide cost-free COVID-19 testing and diagnosis services, including the cost of any testing kit. Cost-free means no deductible, no co-payment and no co-insurance. In addition, the plan cannot impose prior authorization or other managed care requirements before the services are provided.
  • Remember plan sponsor limitations on the receipt and use of protected health information (PHI) from an employer-sponsored group health plan, which is a “covered entity” under the Health Insurance Portability and Accountability Act (HIPAA). Generally, unless there is an exception under HIPAA, or an employee authorization for the release of information, protected health information cannot be shared. If information about an employee’s COVID-19 status does not come from the group health plan, HIPAA will not apply, but there may be implications under state privacy laws. If an employer receives information about the COVID-19 status of an employee’s family member, the Genetic Information Nondiscrimination Act (GINA) may apply.
  • Effective April 2, 2020, the Families First Coronavirus Response Act (the “Act”) requires private employers with less than 500 employees (or a non-private entity with one or more employees) to provide paid family and sick leave, with daily and aggregated limits per employee. You are permitted to take a credit against your payroll taxes for paid leave required by the Act as well as costs incurred to provide health care coverage to employees who receive this paid leave. More guidance is needed as to the logistics of claiming the tax credit and coordinating the Act’s paid leave requirements with other paid time off you already provide to your employees or must provide under state or local sick pay laws.
  • For employees who cannot work (including telework), a reduction in hours or termination of employment resulting in a loss of health care coverage triggers Consolidated Omnibus Budget Reconciliation Act (COBRA) rights (for those employers subject to federal COBRA or state mini-COBRA laws). COBRA notices should be timely distributed. For large employers subject to the employer-shared responsibility requirements of the Affordable Care Act (ACA), any impacted employee in an ACA stability period, must be offered employee-only affordable (i.e., employer subsidized) COBRA coverage or the employer risks the imposition of Internal Revenue Service (IRS) penalties. An employer should make certain COBRA notices are timely distributed and that costs charged for employee-only coverage is affordable, if required by the ACA.
  • Make certain terminated employees with coverage under any insured program with a conversion option, such as LTD and life insurance, are timely provided with conversion notices.
  • A number of issues may arise under employer-sponsored 401(k) plans, including: loan repayments and defaults; and requests for hardship withdrawals. A participant reduction in a 401(k) plan of 20 percent or more due to employer action may constitute a partial plan termination (depending on facts and circumstances) requiring full vesting of all affected employees, including previously non-vested terminated employees who have not had a break in service.
  • Absent legislative relief, the current low interest rates and falling values of plan assets will create a “perfect storm” for defined benefit plan funding levels and required contributions. As with 401(k) plans, a participant reduction of 20 percent or more due to employer action may constitute a partial termination, requiring full vesting.
  • If you contribute to a multiemployer pension plan, a reduction in force could trigger a partial withdrawal liability assessment by the fund, if your “contribution base units” have also reduced during the past two years.
Financial Restructuring
  • Review your credit facility to refresh your understanding of financial covenant requirements that may be at issue or subject to potential default in light of resulting business interruption and challenges. If there are any that present a concern, be prepared to discuss them with your lender in an effort to reach an understanding as to a waiver of the covenant requirement, a modification of the covenant benchmark or a forbearance agreement to clarify that an exercise of remedies will not be pursued.
  • Consider potential customer financial challenges and the possibility of delayed or reduced invoice payments or no payments for an extended period of time. Working with counsel, explore potential rights under the customer agreement and/or the Uniform Commercial Code to alter current payment terms and, possibly, seek adequate assurance of future performance in accordance with the UCC.
  • Review critical product supply agreements to determine remedies available if the supplier’s performance is hindered or delayed in light of conditions resulting from COVID-19 (such as the inability to receive product). Remedies (such as seeking an alternative supplier, or “covering” for increased price of the alternative goods sourced or that are available in such a situation as provided under the UCC and potentially under the supply contract and contractual remedies) should be considered and planned for.
  • Revisit cash flow projections and business plans to determine the potential need to modify current spending plans. Most importantly, communicate any such issues with your lender, as appropriate and keep a clear line of communication open going forward.
  • Be vigilant in terms of a potential increased risk of fraud in light of potential business strains and customer and supplier financial challenges.
  • Be mindful of how lenders in your specific industry may be responding to the situation and changing marketplace and be prepared to address misconceptions.
  • For those in the health care industry (particularly long-term care facilities), be sensitive and mindful of increased risk of financial challenges in light of requirements issued by regulatory agencies and the ability to address these from current liquidity. If current liquidity is not sufficient, be proactive in your outreach to resources to address this shortfall in an effort to avoid potential future litigation.
  • Many business contracts (loans, leases, purchase orders, etc.) will be renegotiated and modified as a result of the impact of these unprecedented events on parties’ ability or willingness to perform their existing obligations. If you are planning to restructure debt facilities or other business arrangements, you need to be mindful of the fact that modifications of certain types of binding agreements can have significant tax implications (such as cancellation-of-indebtedness income in the case of a loan). In addition, transactions that have already been consummated cannot necessarily be “undone” (rescinded) without adverse tax consequences.

General Contracting

Existing contracts should be reviewed to determine how the COVID-19 pandemic may affect the obligations and performance of each contract party.

  • Consider whether the COVID-19 pandemic constitutes a force majeure event and whether to declare an event of force majeure.
    • Review the contractual requirements for declaration of force majeure, and be aware that contractual force majeure provisions are often narrowly construed under applicable state law. A review of relevant state case law may be necessary.
    • Consider the contractual implications of a declaration of force majeure. Are other contract provisions triggered, such as the right of the other party to terminate or an obligation of the declaring party to mitigate damages?
    • Be aware of the potential consequences of an improper declaration of force majeure. Could it be considered a repudiation of the contract that might give the other party a cause of action for breach?
  • If the COVID-19 pandemic does not qualify as a force majeure event, determine whether any other contractual or common law defenses to performance may apply.
    • Consider whether the COVID-19 pandemic constitutes a “material adverse change” or would have a “material adverse effect” under the contract provisions.
    • Consider whether defenses such as “frustration of purpose” or “impossibility” may be applicable. Again, these common-law doctrines are narrowly applied, and a review of relevant state case law may be necessary.
  • Review performance-related contract requirements to determine whether they may be implicated.
    • Consider whether contractual dates for performance can be met. If performance is likely to be affected by the COVID-19 pandemic, be aware of requirements for giving notice of potential delays. 
    • Be aware of the consequences of a default or termination precipitated by the COVID-19 pandemic, including remedy and dispute resolution provisions.

New or pending contracts should be drafted or revised to include protections from consequences of the COVID-19 pandemic.

  • Force majeure provisions should include as force majeure events epidemics, pandemics and “public health events of international concern (PHEIC)” as well as supply chain delays.
  • Although force majeure provisions may already designate change of law or regulation as force majeure events, governmental actions or orders (such as imposition of quarantines or travel bans) should also be included.
  • The party more likely to be affected by the COVID-19 pandemic should consider inclusion of other protections, such as extension of performance periods due to delays beyond the party’s reasonable control.
Labor and Employment
  • For businesses reopening, conduct necessary employee health and safety planning to comply with federal and state safety and health standards and to help mitigate risks. Review available information and guidance with the goal of creating a reasonable plan that can and will be followed.
  • For businesses reopening, review and update employment policies to ensure they are consistent with current public health recommendations and inform employees of changes prior to reopening.
  • Determine a strategy for responding to employees who resist returning to the workplace to ensure compliance with federal and state anti-discrimination laws, leave laws such as the Families First Coronavirus Response Act, and state and local COVID-19 orders.
  • Consider all applicable federal, state and local laws governing when and how employers can inquire about employee medical conditions or disabilities, including the ADA and FMLA.
  • Consider all applicable federal and state wage and hour laws to determine which employees are entitled to payment during non-working hours.
  • For unionized workforces, review the CBA terms regarding management rights during emergencies, and consult and/or bargain with union representatives to implement new disease prevention plan protocols.
Litigation

Active/Pending Litigation

  • Prepare a list of deadlines over the next three-to-six months for active litigation that may be impacted due to travel restrictions or limitations. Consider requesting modifications to those deadlines and/or scheduling orders as early as possible. Be proactive regarding the potential need for continuances for hearings and/or trials.
  • Consider any needs to preserve testimony and evidence and proactively move to do so. Ensure that litigation holds are maintained and that no electronically stored information or other evidence is lost.
  • Consider potential delays in responding to discovery requests if IT systems and/or witness availability are impacted.
  • Consider telephone/video conferences as opposed to in-person appearances in court or at mediation. Follow updates and guidance from federal and state courts, administrative agencies, and other agencies regarding changes for in-person court appearances, court-ordered mediation, administrative hearings, appointments with incarcerated clients, etc. Consider the need to conduct remote depositions through secure mobile videoconferencing platforms offered by court reporters.
  • Maintain ongoing communication between counsel and clients, including remaining apprised of the relevant COVID-19 response plans of each. Prepare for the possible unavailability of witnesses, support staff, court staff, opposing counsel and e-discovery vendors as well as the resulting delays and impacts to active litigation and upcoming deadlines.

Potential Litigation

  • Consider litigation implications related to existing contracts, such as notice, anticipatory breach, force majeure, frustration, etc.
  • Proactively reach out to parties regarding existing contracts to address possible disruptions to contract performance.
  • Consider entering into tolling agreements in the event that the commencement of litigation needs to be delayed.

 

Real Estate

Construction/Development

  • Be aware of construction shutdown orders and reopening notices in your jurisdiction.
  • Be aware of potential threats to the availability of materials resulting from manufacturing shutdowns or slowdowns and supply chain disruption.
  • Where construction has been disrupted, consider seeking modifications in performance or delivery times.
  • If seeking (or opposing) an excusable delay, check force majeure clauses. 
    • Determine if the pandemic is an event that falls under the clause. Some clauses broadly excuse performance for “events beyond the control” of the parties. Other clauses are not as broad, and the party seeking an excusable delay may have to rely on specific examples (e.g., unavailability of materials and governmental actions).
    • Ascertain if the party seeking relief is required to mitigate effects and/or is responsible to give the other parties (owner and/or lender) notice of the event or intention to claim force majeure.
  • Seek alternative sources for materials. Some construction contracts permit the contractor to substitute materials if the specs call for materials not available because of the pandemic.

Multi-Tenanted Properties

  • Determine whether you want building management and tenants to exclude any category of people or to require employees to work remotely.
  • Check for alignment with current CDC advice to assure that intended policy does not have a discriminatory effect.
  • Ascertain whether a lease permits issuance of rules/regulations requiring tenants to comply with new policy. 
  • Check notice provisions and assure that policy does not discriminate against any class of tenant.
  • Ascertain if denying access to tenants or their guests may give rise to rent abatement claims.

General Real Estate Sector

  • Anticipate an increasing number of lease and loan defaults caused by deteriorating economic conditions.
  • Check covenants to ascertain whether severe economic downturn excuses or delays payments or performance.
  • Force majeure clauses do not usually excuse performance based on economic conditions, but other theories, such as impossibility of performance or commercial frustration may apply.
  • Consider the likelihood of delays or cancellations of transactions if employees are required to work remotely and do not have access to full resources needed for carrying out transactions.
  • Common sense and reasonable business solutions help mitigate loss and solve most problems related to the pandemic. Being proactive, clearheaded and reasonable under the circumstances will be appreciated and remembered.
Risk Assessment and Management/Negligence Litigation
  • Perform due diligence before distributing products not only by maintaining good manufacturing practices but also by incorporating the public health guidance from the FDA, CDC, CPSC, FTC and local health authorities into operations.
  • Assess the potential for increased risk associated with products in the current environment and review and update associated documents, such as warranties and instructions for use where needed.
  • Assess potential for increased risk associated with business operations in the current environment and the need to demonstrate compliance with general tort principles, such as the exercise of reasonable care toward others. 
Tax
  • Be sure you understand all tax filing and payment deadlines, some (but not all) of which have been extended in light of the current COVID-19 situation. While the deadline for federal income tax returns and federal income tax payments (including estimated tax payments) otherwise due on April 15 have been extended to July 15, the same is not true for all taxes (including some payroll taxes and state and local income taxes, as well as federal income taxes of taxpayers that do not have an April 15 due date). To the extent there is any doubt about automatic extensions, plan to file for extensions under regular procedures, electronically if possible.
  • With the decline in global market valuations, you may have opportunities to transfer assets in taxable transactions with a much lower tax bill. Now would be a good time to review whether any such transfers make sense.
Trusts and Estates
  • During your time at home, this is an opportunity to review your personal estate planning. Do your personal documents (Durable Powers of Attorney, Advance Medical Directive, Will, and Revocable Trust) reflect your current wishes and name the people you want to handle your financial and medical affairs and manage your estate after death? Do the beneficiary designations of your retirement accounts and life insurance policies coordinate with your other planning?
  • Are you the beneficiary or settlor of an irrevocable trust? Does the trust contain provisions that you believe should be modified, whether because of changes in tax laws or changes in personal circumstances? Many states now permit irrevocable trusts to be modified, and now may be the time to find out whether trust modification is appropriate.
  • Your portfolio or the value of your business may have taken a beating. But if you believe the future holds promise and that the value of your investments or your business will recover, whether in a year or in five years, now is the time to focus on planning. There are many planning tools that can help mitigate taxes in the future. Given today’s very low interest rates and stock market volatility, now would be a great time to take advantage of many of these tools.
Force Majeure
  • Consider why force majeure may need to be invoked, i.e., what specifically is causing an impact on the party’s ability to perform under the contract.
  • Examine whether the event identified above is specifically enumerated in the force majeure provision or whether it would fall under any relevant “catch-all” language.
  • Examine other provisions in the contract that could be relevant to a force majeure analysis, such as dispute resolution procedures, choice of law/jurisdiction/venue, termination, statements that time is of the essence, and provisions limiting damages or setting liquidated damages.
  • Consider the law of the jurisdiction governing the contract to determine how that jurisdiction may interpret the relevant contractual provisions given the facts of the case.
  • Understand the mechanics for invoking force majeure, such as the timing and manner in which notice of the force majeure event must be provided to the counterparty.
  • Determine whether invoking force majeure results in a temporary suspension or permanent cancellation of obligations under the contract.
  • Remain cognizant of post-invocation obligations, including duties to mitigate damages and/or requirements to attempt to perform despite the force majeure event.
  • Consider whether a non-contractual commercial solution is available that may help avoid litigation.
  • Consider the effect of invoking force majeure on obligations under other contracts, such as bank loans or asset purchase agreements.
  • Consider whether any common law doctrines, such as impracticability/impossibility and frustration of purpose, are available instead of or in addition to force majeure.
  • Preserve relevant evidence, such as documentation of performance history prior to the force majeure event and all communications with the opposing party.
  • Avoid creating harmful evidence, such as unnecessary non-privileged communications regarding the contract and/or performance obligations.
Industry-Specific Considerations
Insurance and Reinsurance

COVID-19 is currently affecting the insurance and reinsurance industry at a rapid pace. We are continually advising insurance and reinsurance companies, MGAs and MGUs, insurance producers and other insurance industry intermediaries on how to most effectively handle their businesses and policies during this pandemic. Examples of our current work include:

  • Analyze insurance coverage claims and nationally coordinate responses involving all types of policy lines, including business interruption, product liability and general liability.
  • Review and provide regulatory advice on licensing requirements and potential disruptions related to COVID-19.
  • Draft and develop preparedness response plans to address the operational and financial risks posed by COVID-19.
  • Review and interpret insurance contracts, specifically issues involving force majeure clauses and the like.
  • Update and advise insurers on legislation around the country involving business interruption insurance as applied to the COVID-19 pandemic.
Health Care

The COVID-19 crisis has had a significant impact on the health care industry with inundated health care providers on the front lines fighting the virus and working to save lives. In an effort to provide relief and assistance, there have been changes to federal, state and local regulations, along with the establishment of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). Keeping up with the latest rules and staying compliant compound the challenges health care operators and businesses face. Below are steps to help health care providers ensure they maintain regulatory requirements during the COVID-19 pandemic and assist with general business operations.

  • Evaluate any newly enacted state laws, such as in New Jersey and Illinois, that grant health care professionals and facilities immunity from civil and/or criminal liability for potential malpractice claims relating to treatment for COVID-19 patients.
  • Assess the ways in which the CARES Act provides financial and regulatory relief and immunity to health care facilities, workers, and other providers; device manufacturers; and individuals during the COVID-19 public health emergency.
  • Be aware of the temporary enforcement easing of certain regulations issued under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) that allow covered health care providers subject to the HIPAA Privacy, Security, and Breach Notification Rules to communicate with patients and provide telehealth services through remote communication technologies that may not fully comply with the requirements of the HIPAA Rules. [Alert References: 4/3/20; 3/19/20]
  • Review the expanded Medicare telehealth coverage given the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, an $8.3 billion dollar spending bill that lifted Medicare restrictions on telehealth coverage, as well as certain states lifting telehealth regulations. Providers need to regularly monitor federal, state and commercial payor changes to ensure they continue to provide the broadest availability of telemedicine options that are compliant. [Alert References: 3/18/20; 3/19/20; 3/23/20]
  • Be aware of state executive orders that suspend certain health care services due to the COVID-19 pandemic and when the suspensions are lifted. For example, all elective surgeries performed on adults have been suspended in New Jersey since March 27, 2020.
  • For Programs of All-Inclusive Care for the Elderly (PACE) organizations, evaluate Centers for Medicare & Medicaid Services (CMS) guidance regarding accepted policies and standard procedures for infection control that provides flexibility in regards to the standard organizational requirements. The CMS also eased regulations that will allow PACE organizations to use telehealth to provide patient assessments that would typically be conducted in-person.
  • Evaluate requirements to qualify for the CMS’s expansion of its accelerated and advance payment program (AAPP), which aims to lessen the financial hardships Medicare providers are facing as they respond to the COVID-19 pandemic.
  • Review the Center for Disease Control and Prevention’s guidance for outpatient and ambulatory care that includes a variety of suggested goals and strategies, such as delaying elective ambulatory provider visits; using telemedicine when possible; training personnel to conduct telephone interactions with patients, both for screening and responding to patient questions; and eliminating no-show patient charges.
  • Assess taking advantage of loan programs that provide hospitals with some financial assistance. For example, a new $450 million loan program in Pennsylvania provides short-term financial relief to hospitals to help ensure they can maintain personnel, personal protective equipment, and other supplies.
  • Be sensitive and mindful of an increased risk of financial challenges in light of rapidly changing requirements issued by regulatory agencies and the ability to address these from current liquidity. If current liquidity is not sufficient, be proactive in outreach to resources to address this shortfall in an effort to avoid potential future litigation.
Environmental

The COVID-19 pandemic — and the sweeping health, safety, travel and social distancing precautions and restrictions being imposed by governments and private entities across the nation to limit the spread of COVID-19 — are having far-reaching impacts in the world of environmental compliance and cleanups. Facilities are facing unprecedented challenges on multiple fronts, including in their efforts:

  • to carry out monitoring, sampling and testing, lab analysis, training, reporting and certification activities required by federal and state environmental statutes, regulations, and permits;
  • to comply with milestones and deadlines established in orders, consent decrees and other enforcement instruments; and
  • to meet existing requirements for limiting and managing facility air emissions, wastewater discharges, hazardous waste treatment and the like.

Parties and agencies conducting environmental cleanups and emergency response actions at sites across the country, whether as part of the federal Superfund program, RCRA corrective actions, TSCA PCB cleanups, or other federal programs — or in connection with state-supervised site remediation programs — are likewise experiencing significant disruptions arising from the COVID-19 pandemic and from federal, state, tribal, and/or local orders and advisories put into effect to address it.

In an effort to navigate these complex issues, federal and state environmental agencies are issuing temporary guidance documents and orders applicable to a wide range of environmental compliance activities and cleanups. The interim policies and directives set forth in these documents reinforce agency expectations that regulated entities will continue to operate their facilities and manage their cleanups responsibly and safely, while simultaneously recognizing the need for measures to safeguard the health of the public, of facility and government personnel, and of contractors, and the importance of the agencies focusing their resources on situations presenting the most imminent threats to public health or the environment.

Key documents issued by federal and state agencies include the following:

  • EPA’s temporary policy memorandum issued on March 26, 2020 modifying its enforcement discretion in light of the COVID-19 pandemic, in which the agency expressed its intention to refrain from enforcement of routine environmental compliance requirements where the pandemic has created an inability for a regulated entity to comply with the law, and the affected entity takes mitigating actions specified in the policy.
  • EPA’s interim guidance issued on April 10, 2020 on site cleanups and emergency response actions during the COVID-19 pandemic, in which the agency identified various factors and considerations to be evaluated to determine whether field work at a site may be subject to slowdown or shutdown in order to protect the health and safety of communities, agency personnel and site workers.
  • New Jersey Governor Murphy’s executive order issued on April 8, 2020, in which all non-essential construction activity in the state was directed to cease, but which allows projects to continue that involve abatement of hazards, emergency repairs, and certain other forms of site remediation, so long as enumerated worksite protective measures are adopted at the site.
Higher Education

The COVID-19 pandemic has forced colleges and universities to temporarily close much of their campuses and move instruction to a remote learning environment. While managing these unprecedented systemic changes, higher education institutions must also monitor a barrage of ever-changing state and federal rules, orders, and guidance while further evaluating how the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provides them and their students with economic assistance.

Practical legal considerations during this period include, but are not limited to:

  • Preparing for class action cases filed against educational institutions alleging breach of contract and unjust enrichment (and the public relations concerns associated with those allegations) in connection with tuition, room and board, and other related fee reimbursement claims. 
  • Assessing the Higher Education Emergency Relief Fund (HEERF) created by the CARES Act, both the “first 50%” for students and the “second 50%” that has broader potential application, and analyzing the permissible uses, limitations, restrictions, and/or process-related gaps related to this funding, including dealing with non-Title IV-eligible students, maintaining as much of your workforce as is “reasonably practicable,” managing grant funds, and deciding if and how to pay work-study students. Moreover, as recent weeks have seen, institutions with larger endowments must consider the optical pros and cons of using these funds.
  • Tracking changes in state regulations regarding the use of telehealth and how these changes have relaxed or waiver licensure restrictions regarding the practice of medicine across state lines.
  • If your institution is using campus resources, facilities and pertinent technology to assist with manufacturing and distributing personal protective equipment (PPE), evaluating updated regulatory guidance, which includes eased regulatory burdens during the pandemic.
  • Addressing, in a fair but realistic manner, ADA and Section 504 issues while in a remote learning environment.
  • Contending with a web of federal and state guidance and regulations with respect to furloughs, layoffs, and return-to-work issues for both at-will, contract, and union employees.
  • Ensuring that all online courses meet the minimum federal approval requirements issued by the Department of Education, as well as comply with applicable state law.
  • Identifying all sources of financial risk and potential relief available to your institution (covenants, letters of credit, etc.) and acting sooner rather than later.
  • Planning if/how to reopen for the 2020-2021 Academic Year.
Food, Beverage and Agribusiness

The COVID-19 pandemic has placed a strain on the supply chains of many food, beverage and agribusiness companies given panic buying, shelter-in-place orders altering or halting operations for non-essential businesses, and plants temporarily closing or reducing output due to employee cases of COVID-19. Lenders, vendors, restaurants, retailers and suppliers have all been impacted by these supply chain pain points or disruptions. Companies are grappling with new rules and challenges that have forced them to adjust or halt operations. Below are some practical legal considerations for stakeholders during these challenging times.

  • Determine if the business is exempt from its respective state’s executive order. As many stakeholders already know, certain critical infrastructure sectors are exempt for most stay-at-home orders, including:
    • Supply
    • Processing, packaging and production
    • Agricultural and food product storage
    • Agricultural and food product transportation
    • Agricultural and food processing product distribution
    • Agricultural and food supporting facilities
    • Regulatory, oversight and industry organizations
  • Further information regarding critical infrastructure sectors is available from the U.S. Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) page, here.
  • For businesses permitted to continue operations, such as grocery stores, review state mandates about adopting specific protections for workers and customers, including, in some instances, providing face coverings and other personal protective equipment to workers. Some state mandates also require retail stores to install a physical barrier, such as a shield guard, between customers and cashiers/baggers wherever feasible. For example, New Jersey, Pennsylvania, New York and Maryland have tightened related restrictions and procedures for employers.
  • For farmers, ranchers and consumers, analyze how the U.S. Department of Agriculture’s Coronavirus Food Assistance Program provides assistance in response to the COVID-19 national emergency. The USDA is deploying $19 billion in critical support to qualifying farmers and ranchers to maintain the integrity of the United States’ food supply chain, and is partnering with regional and local distributors to purchase $3 billion in fresh produce, dairy and meat. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy and meat products to food banks, community and faith-based organizations, and other non-profits serving Americans in need.
  • Be aware of requirements under the Perishable Agricultural Commodities Act (PACA) when there are distributions in supply chains. PACA protects businesses dealing in fresh and frozen fruits and vegetables by establishing and enforcing a code of fair business practices and by helping companies resolve business disputes. It assures that suppliers of produce are paid by imposing a statutory trust on all produce-related assets, such as produce itself or other products held by agricultural merchants, dealers and brokers. A trust is created and must be maintained with respect to the proceeds of the sale subject to PACA to secure that full payment is made to producers and wholesalers of agricultural products. [Click here for our PACA Counseling overview.]
Insurance and Reinsurance

COVID-19 is currently affecting the insurance and reinsurance industry at a rapid pace. We are continually advising insurance and reinsurance companies, MGAs and MGUs, insurance producers and other insurance industry intermediaries on how to most effectively handle their businesses and policies during this pandemic. Examples of our current work include:

  • Analyze insurance coverage claims and nationally coordinate responses involving all types of policy lines, including business interruption, product liability and general liability.
  • Review and provide regulatory advice on licensing requirements and potential disruptions related to COVID-19.
  • Draft and develop preparedness response plans to address the operational and financial risks posed by COVID-19.
  • Review and interpret insurance contracts, specifically issues involving force majeure clauses and the like.
  • Update and advise insurers on legislation around the country involving business interruption insurance as applied to the COVID-19 pandemic.
Health Care

The COVID-19 crisis has had a significant impact on the health care industry with inundated health care providers on the front lines fighting the virus and working to save lives. In an effort to provide relief and assistance, there have been changes to federal, state and local regulations, along with the establishment of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). Keeping up with the latest rules and staying compliant compound the challenges health care operators and businesses face. Below are steps to help health care providers ensure they maintain regulatory requirements during the COVID-19 pandemic and assist with general business operations.

  • Evaluate any newly enacted state laws, such as in New Jersey and Illinois, that grant health care professionals and facilities immunity from civil and/or criminal liability for potential malpractice claims relating to treatment for COVID-19 patients.
  • Assess the ways in which the CARES Act provides financial and regulatory relief and immunity to health care facilities, workers, and other providers; device manufacturers; and individuals during the COVID-19 public health emergency.
  • Be aware of the temporary enforcement easing of certain regulations issued under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) that allow covered health care providers subject to the HIPAA Privacy, Security, and Breach Notification Rules to communicate with patients and provide telehealth services through remote communication technologies that may not fully comply with the requirements of the HIPAA Rules. [Alert References: 4/3/20; 3/19/20]
  • Review the expanded Medicare telehealth coverage given the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, an $8.3 billion dollar spending bill that lifted Medicare restrictions on telehealth coverage, as well as certain states lifting telehealth regulations. Providers need to regularly monitor federal, state and commercial payor changes to ensure they continue to provide the broadest availability of telemedicine options that are compliant. [Alert References: 3/18/20; 3/19/20; 3/23/20]
  • Be aware of state executive orders that suspend certain health care services due to the COVID-19 pandemic and when the suspensions are lifted. For example, all elective surgeries performed on adults have been suspended in New Jersey since March 27, 2020.
  • For Programs of All-Inclusive Care for the Elderly (PACE) organizations, evaluate Centers for Medicare & Medicaid Services (CMS) guidance regarding accepted policies and standard procedures for infection control that provides flexibility in regards to the standard organizational requirements. The CMS also eased regulations that will allow PACE organizations to use telehealth to provide patient assessments that would typically be conducted in-person.
  • Evaluate requirements to qualify for the CMS’s expansion of its accelerated and advance payment program (AAPP), which aims to lessen the financial hardships Medicare providers are facing as they respond to the COVID-19 pandemic.
  • Review the Center for Disease Control and Prevention’s guidance for outpatient and ambulatory care that includes a variety of suggested goals and strategies, such as delaying elective ambulatory provider visits; using telemedicine when possible; training personnel to conduct telephone interactions with patients, both for screening and responding to patient questions; and eliminating no-show patient charges.
  • Assess taking advantage of loan programs that provide hospitals with some financial assistance. For example, a new $450 million loan program in Pennsylvania provides short-term financial relief to hospitals to help ensure they can maintain personnel, personal protective equipment, and other supplies.
  • Be sensitive and mindful of an increased risk of financial challenges in light of rapidly changing requirements issued by regulatory agencies and the ability to address these from current liquidity. If current liquidity is not sufficient, be proactive in outreach to resources to address this shortfall in an effort to avoid potential future litigation.
Environmental

The COVID-19 pandemic — and the sweeping health, safety, travel and social distancing precautions and restrictions being imposed by governments and private entities across the nation to limit the spread of COVID-19 — are having far-reaching impacts in the world of environmental compliance and cleanups. Facilities are facing unprecedented challenges on multiple fronts, including in their efforts:

  • to carry out monitoring, sampling and testing, lab analysis, training, reporting and certification activities required by federal and state environmental statutes, regulations, and permits;
  • to comply with milestones and deadlines established in orders, consent decrees and other enforcement instruments; and
  • to meet existing requirements for limiting and managing facility air emissions, wastewater discharges, hazardous waste treatment and the like.

Parties and agencies conducting environmental cleanups and emergency response actions at sites across the country, whether as part of the federal Superfund program, RCRA corrective actions, TSCA PCB cleanups, or other federal programs — or in connection with state-supervised site remediation programs — are likewise experiencing significant disruptions arising from the COVID-19 pandemic and from federal, state, tribal, and/or local orders and advisories put into effect to address it.

In an effort to navigate these complex issues, federal and state environmental agencies are issuing temporary guidance documents and orders applicable to a wide range of environmental compliance activities and cleanups. The interim policies and directives set forth in these documents reinforce agency expectations that regulated entities will continue to operate their facilities and manage their cleanups responsibly and safely, while simultaneously recognizing the need for measures to safeguard the health of the public, of facility and government personnel, and of contractors, and the importance of the agencies focusing their resources on situations presenting the most imminent threats to public health or the environment.

Key documents issued by federal and state agencies include the following:

  • EPA’s temporary policy memorandum issued on March 26, 2020 modifying its enforcement discretion in light of the COVID-19 pandemic, in which the agency expressed its intention to refrain from enforcement of routine environmental compliance requirements where the pandemic has created an inability for a regulated entity to comply with the law, and the affected entity takes mitigating actions specified in the policy.
  • EPA’s interim guidance issued on April 10, 2020 on site cleanups and emergency response actions during the COVID-19 pandemic, in which the agency identified various factors and considerations to be evaluated to determine whether field work at a site may be subject to slowdown or shutdown in order to protect the health and safety of communities, agency personnel and site workers.
  • New Jersey Governor Murphy’s executive order issued on April 8, 2020, in which all non-essential construction activity in the state was directed to cease, but which allows projects to continue that involve abatement of hazards, emergency repairs, and certain other forms of site remediation, so long as enumerated worksite protective measures are adopted at the site.
Higher Education

The COVID-19 pandemic has forced colleges and universities to temporarily close much of their campuses and move instruction to a remote learning environment. While managing these unprecedented systemic changes, higher education institutions must also monitor a barrage of ever-changing state and federal rules, orders, and guidance while further evaluating how the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provides them and their students with economic assistance.

Practical legal considerations during this period include, but are not limited to:

  • Preparing for class action cases filed against educational institutions alleging breach of contract and unjust enrichment (and the public relations concerns associated with those allegations) in connection with tuition, room and board, and other related fee reimbursement claims. 
  • Assessing the Higher Education Emergency Relief Fund (HEERF) created by the CARES Act, both the “first 50%” for students and the “second 50%” that has broader potential application, and analyzing the permissible uses, limitations, restrictions, and/or process-related gaps related to this funding, including dealing with non-Title IV-eligible students, maintaining as much of your workforce as is “reasonably practicable,” managing grant funds, and deciding if and how to pay work-study students. Moreover, as recent weeks have seen, institutions with larger endowments must consider the optical pros and cons of using these funds.
  • Tracking changes in state regulations regarding the use of telehealth and how these changes have relaxed or waiver licensure restrictions regarding the practice of medicine across state lines.
  • If your institution is using campus resources, facilities and pertinent technology to assist with manufacturing and distributing personal protective equipment (PPE), evaluating updated regulatory guidance, which includes eased regulatory burdens during the pandemic.
  • Addressing, in a fair but realistic manner, ADA and Section 504 issues while in a remote learning environment.
  • Contending with a web of federal and state guidance and regulations with respect to furloughs, layoffs, and return-to-work issues for both at-will, contract, and union employees.
  • Ensuring that all online courses meet the minimum federal approval requirements issued by the Department of Education, as well as comply with applicable state law.
  • Identifying all sources of financial risk and potential relief available to your institution (covenants, letters of credit, etc.) and acting sooner rather than later.
  • Planning if/how to reopen for the 2020-2021 Academic Year.
Food, Beverage and Agribusiness

The COVID-19 pandemic has placed a strain on the supply chains of many food, beverage and agribusiness companies given panic buying, shelter-in-place orders altering or halting operations for non-essential businesses, and plants temporarily closing or reducing output due to employee cases of COVID-19. Lenders, vendors, restaurants, retailers and suppliers have all been impacted by these supply chain pain points or disruptions. Companies are grappling with new rules and challenges that have forced them to adjust or halt operations. Below are some practical legal considerations for stakeholders during these challenging times.

  • Determine if the business is exempt from its respective state’s executive order. As many stakeholders already know, certain critical infrastructure sectors are exempt for most stay-at-home orders, including:
    • Supply
    • Processing, packaging and production
    • Agricultural and food product storage
    • Agricultural and food product transportation
    • Agricultural and food processing product distribution
    • Agricultural and food supporting facilities
    • Regulatory, oversight and industry organizations
  • Further information regarding critical infrastructure sectors is available from the U.S. Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) page, here.
  • For businesses permitted to continue operations, such as grocery stores, review state mandates about adopting specific protections for workers and customers, including, in some instances, providing face coverings and other personal protective equipment to workers. Some state mandates also require retail stores to install a physical barrier, such as a shield guard, between customers and cashiers/baggers wherever feasible. For example, New Jersey, Pennsylvania, New York and Maryland have tightened related restrictions and procedures for employers.
  • For farmers, ranchers and consumers, analyze how the U.S. Department of Agriculture’s Coronavirus Food Assistance Program provides assistance in response to the COVID-19 national emergency. The USDA is deploying $19 billion in critical support to qualifying farmers and ranchers to maintain the integrity of the United States’ food supply chain, and is partnering with regional and local distributors to purchase $3 billion in fresh produce, dairy and meat. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy and meat products to food banks, community and faith-based organizations, and other non-profits serving Americans in need.
  • Be aware of requirements under the Perishable Agricultural Commodities Act (PACA) when there are distributions in supply chains. PACA protects businesses dealing in fresh and frozen fruits and vegetables by establishing and enforcing a code of fair business practices and by helping companies resolve business disputes. It assures that suppliers of produce are paid by imposing a statutory trust on all produce-related assets, such as produce itself or other products held by agricultural merchants, dealers and brokers. A trust is created and must be maintained with respect to the proceeds of the sale subject to PACA to secure that full payment is made to producers and wholesalers of agricultural products. [Click here for our PACA Counseling overview.]
Other Resources
State/City Government Resources
State/City Government Resources
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