How businesses can begin to respond to the fallout of the novel coronavirus

NOTE: This blog includes discussions and explorations of legal issues. The content is intended for educational purposes only, and is not intended to be legal advice. You should always consult with a licensed attorney before taking any action that could affect or impair your legal rights.

In just a few weeks’ time, it has already become cliché to note that the novel coronavirus is, and will continue, to fundamentally alter how the world works. Understanding the impact that this pandemic can have on your business or organization is important to ensure that you are both protected from liability and that you avoid making unnecessary expenditures out of fear or “just in case.”

Just as maintaining your health during a pandemic requires you to be vigilant of the things you physically touch and interact with, minimizing legal liability also requires considering your “touch points.” You need to be thinking about your relationships with your customers and clients, your employees and independent contractors, and your suppliers and vendors. While there are certainly other (and more specific) concerns that will need to be addressed, on a general level, the most immediate concerns under present circumstances can likely be broken up into two buckets: safety and promises. 

The first bucket, which has to do with “safety concerns” that arise, and deals with some of the more obvious concerns about controlling the transmission of the coronavirus. That includes concerns about obligations you might have to protect employees,[1]See 29 U.S. Code § 654 (stating that employers have an obligation to provide employees with “a place of employment which [is] free from recognized hazards that are causing or are likely to cause death or serious physical harm”). as well as anyone else that comes onto your property. Speaking with an attorney can help you to determine whether your commercial general liability (“CGL”) insurance covers if anyone contracts COVID-19 as a result of your (or your entity’s) negligence. Determining best practices for your specific operation should be individually tailored, but the Centers for Disease Control and Prevention (“CDC”) has dedicated a part of its website to addressing questions and concerns pertaining to COVID‑19, and that would be a good place to start.

The second bucket, “promise concerns” has to do with obligations you might have that relate to agreements you have with other parties. When it comes to contracts, simply because something might be outside of your control, does not necessarily excuse you from fulfilling the contract. One phrase you might begin to hear more of, is “force majeure.” Force majeure is French for “superior force,” but in the legal context, a force‑majeure event is one “that can be neither anticipated nor controlled.”[2]Force majeure, Black’s Law Dictionary (10th ed. 2014). What constitutes a force-majeure event will be defined by a force‑majeure clause, which effectively determines which party to a contract bears the burden (i.e., loses out) when the contract “becomes impossible or impracticable” to fulfill.[3]Force‑majeure clause, Black’s Law Dictionary (10th ed. 2014).

There are other buckets of concerns that will need to be addressed (e.g., WARN laws that can have an impact on your obligations to employees), but they are outside the scope of this post. For now, while your life — both in the professional and personal sense — might be in turmoil, know that you do not have to go through it all alone. Berger Law is here to assist you in identifying liabilities you might have, and to help you to have a greater sense of certainty about your specific circumstances, during this whirlwind. 

Stay safe, stay healthy, be patient, be kind, and remember, we are all in this together.

Best,

Justin

References

1 See 29 U.S. Code § 654 (stating that employers have an obligation to provide employees with “a place of employment which [is] free from recognized hazards that are causing or are likely to cause death or serious physical harm”).
2 Force majeure, Black’s Law Dictionary (10th ed. 2014).
3 Force‑majeure clause, Black’s Law Dictionary (10th ed. 2014).