In addition to the costs to human health, life, and the global economy, the COVID-19 pandemic raises a host of legal concerns impacting employment law, corporate compliance and contract law, litigation and beyond. Herzfeld + Rubin has formed a task force to ensure that our clients are in the best position – and have the best representation – to face all of these challenges and more.
Employment Law
- As businesses reopen, employers will find themselves walking through a liability landmine, where the slightest misstep could result in litigation. For instance, employees who contract COVID-19 may sue their employer for intentionally failing to provide a safe workplace – and such lawsuits may not be dismissed outright based on the exclusivity of workers’ compensation benefits. Whether employers can be shielded from such liability by obtaining signed COVID-19 related waivers from all employees will be an issue for courts to decide.
- While the Centers for Disease Control and Prevention has recommended that employers conduct daily health checks of all employees, the Americans with Disabilities Act (“ADA”) restricts the kind of inquiries an employer can make into an employee’s medical status. Consequently, pointed inquiries into the health and/or visible symptomology of employees may run afoul of the ADA. Health inquiries may also violate the Health Insurance Portability and Accountability Act (“HIPAA”), which shields certain health information and specifies the circumstances under which such information may be disclosed.
- Employers are also going to be faced with requests to work from home by employees claiming heightened susceptibility to, and/or a heightened fear of, contracting COVID-19 at the workplace, both of which may constitute a request for a reasonable accommodation under the ADA. Denying the request may violate the ADA and other state and local laws, while granting the request may result in liability should the employee sustain an injury while working remotely. All employment related decisions must be considered against the backdrop of both long-existing laws governing the workplace as well as the new employment laws passed in response to the pandemic.
Please contact Maureen Doerner Fogel or Sharyn Rootenberg with any related inquiries.
Premises Liability
- COVID-19 presents unique challenges to property owners and others potentially liable for premises liability claims. Owners and managers of commercial and residential properties must consider how to avoid and address claims based upon exposure to COVID-19 on their properties, including taking reasonable precautions and following guidelines from health and safety organizations. Even out-of-possession landlords may face lawsuits related to the operation of tenants’ businesses.
- Property owners must consider restrictions and protections they can impose to enforce social distancing, limit potential health risks, and protect themselves. In addition to the dangers of COVID-19, property owners may be obligated to enter a tenant’s space to address other issues, such as making repairs, while a stay-at-home order is in place. Additionally, property owners must understand their responsibilities with respect to common areas and outdoor areas of their properties.
- Residential property owners should be prepared to address warranty of habitability and other claims related to the incidence of COVID-19 on their property, including understanding the extent to which liability waivers may – or may not – be enforced and the potential for class action lawsuits.
- Property owners must also be ready to address claims based upon the actions of others intentionally or negligently exposing people to COVID-19 on their property, while balancing individuals’ privacy rights.
Please contact Natalie M. Lefkowitz with any related inquiries.
Insurance Law
- Insurance law is implicated in every business and industry in which insurance products and coverage are offered – liability, business interruption, Directors & Officers (D&O), and other commercial policies are all implicated in the face of COVID-19. Insureds must assess the extent of coverage under their policies and ensure they meet policy and notice requirements when facing the prospect of making claims. Carriers must assess the extent to which policy limitations may protect them and whether insureds have met requirements for individual policies and claims, including notice requirements. Carriers must also ensure they meet their own obligations in the event they anticipate disclaiming coverage.
- Commercial general liability policies may provide defense and coverage if a business is sued by one or more plaintiffs alleging they contracted COVID-19 on the premises, though insureds must review their policies for relevant disclaimers and assess their coverage position now, before a case is filed.
- Employers must understand the extent to which workers’ compensation affords them protections if an employee contracts COVID-19 in the scope and course of their employment.
- Businesses must assess the need for D&O coverage to protect against claims that their directors, officers, and other executives and employees breached duties to the company or violated securities laws in the context of COVID-19 exposure.
Please contact Miriam Skolnik or Alyssa J. Pantzer with any related inquiries.
Contract Law
- All businesses should try to reduce or mitigate risks generated by the COVID-19 pandemic, and should evaluate their business obligations under existing contracts. Whether a business will bear the costs of default due to outbreaks depends on multiple factors, including the law governing the contractual relationships and specific contractual language. Key considerations: (i) Review your contracts. Commercial law in the US excuses nonperformance based on force majeure only if the contract expressly anticipates the event that prevents such party’s performance. When such clauses include only general or broader terms, there is a chance that the provision will be interpreted narrowly and performance will not be excused. (ii) Identify any notice requirements. Failure to send notice at all or within the amount of time prescribed in the contract may be a waiver of its force majeure. (iii) Identify alternative avenues to perform your obligations or mitigate any damages. A party generally has a duty to do what is commercially reasonable to help limit any losses suffered by the other party in a contract. The party who suffered damages also has a corresponding obligation to mitigate its own damages.
Please contact Lydia Ferrarese with any related inquiries.
Corporate Governance
- COVID-19 has generated novel complex issues for corporations, and their Boards of Directors. Generally, the Board has a duty to oversee the business and affairs of the corporation. This includes overseeing management, and whether it is properly implementing required actions. Particularly during a crisis, such as the current COVID-19 pandemic, it is vital for the Board to remain up to date and well-informed on legislation, policies and guidelines to ensure it is properly monitoring the risks faced by the company, and it is adequately performing its duties. As a preliminary requirement, the Board must receive regular and frequent updates from management, and from the company’s consultants, including counsel. The Board should also consider implementing policies to ensure it is regularly updated on procedures and legislative updates. Similarly, the Board should address shareholders’ and investors’ concerns to reduce the risk of corporate disputes.
Please contact Lydia Ferrarese with any related inquiries.
Litigation
- The current COVID-19 pandemic will likely generate an “outbreak” of litigation covering a wide range of issues. There are already emerging insurance coverage and contractual disputes directly related to the pandemic, and we would expect to see an increase in these areas and others when courts resume more normal operations. Contractual disputes are inevitable, particularly where the public health concerns and government regulations responding to the pandemic have interrupted supply chains at every level, and for virtually all products and services. The disruption to the economy may also yield a secondary explosion of litigation related to commercial landlord tenant disputes and foreclosures, securities, and other class actions, and regulatory actions, similar to what we experienced after the 2008 economic collapse. Companies should evaluate and address foreseeable disputes, in order to minimize the risk that such disputes will generate litigation. Similarly, an analysis of available claims or defenses is key to renegotiate the company’s obligations or settle existing disputes.
Please contact Lydia Ferrarese with any related inquiries.