COVID-19: Emerging strong on the other side of the pandemic

A checklist of preparatory considerations

Publication March 2020


We have made much COVID-19 business shutdown/interruption information available, and we hope we have been of help during these unprecedented times. We are deeply committed to assisting you and our country emerge strong and vibrant when life returns to normal.

When normalcy returns, American businesses must be ready to jump into action. In this alert, we highlight some of the issues businesses will confront in the interim and when life returns to normal. In succeeding pieces, we will focus even more upon future opportunities. The future is bright.

Please contact us if you need assistance. We stand ready to serve.

General overarching business issues for all industries

Does your business have business interruption insurance?

  • Potential issue(s): Contract obligations; investigate your insurer's present position, sometimes available publicly.
  • General advice: Review your insurance contracts and ascertain your company's obligations, including a duty to collect and preserve information and mitigate your company's damages; make sure you are giving the required timely notice of intent to proceed under the business interruption clause; make sure you are documenting efforts and saving requisite items of proof, including damages information.

Does your business have force majeure clauses in contracts?

  • Potential issue(s): Contract obligations; applicable law and circumstances of the state(s) in which you operate.
  • General advice: Review your significant contracts; study the force majeure clause and what it explicitly covers, could arguably cover and exclusions from coverage; review applicable law; analyze the situation based on the jurisdictions in which you operate, including but not limited to federal, state and local government requirements and/or position statements based on the situation; make sure you are giving the required timely notice of intent to proceed under the force majeure clause; ascertain what your company's obligations are, including to collect information and mitigate your company's damages; make sure you are documenting efforts and saving requisite items of proof including damages information.

Has your business been capturing necessary information? What should you be doing now and when business workplace operations resume to ensure that you have the necessary business records?

  • Potential issue(s): Employees working at home may be have or be inclined to maintain or copy business materials to their personal devices.
  • General advice: Assemble a team of IT, HR, business unit, and legal professionals; examine how your business has been operating remotely during these times; consider legal obligations and business needs for capturing the information that may exist on employees' personal devices; ascertain how best to capture and retain the necessary and/or desired information and implement procedures for handling; make sure you clearly communicate with employees to capture the necessary information; consider not only current but departed employees; remind employees that adverse parties may seek access to personal devices; use only company email and other permitted avenues for conversations that relate to the business.

Is your confidential business information protected?

  • Potential issue(s): Remote working, especially on such an expansive level, may have exposed confidential information, including trade secrets and intellectual property.
  • General advice: Do a risk assessment of potential exposure; examine, for example, whether mechanisms existed to prevent copying or downloading of confidential company information; take appropriate steps to protect such information, including reminding employees and independent contractors of the law and contractual obligations regarding confidential information and the misuse of such.

Do your employees have tangible information in hard copy form (e.g. notes, letters, etc.) that may need to be preserved?

  • Potential issue(s): Preservation and capturing as company's business records.
  • General advice: Work with HR and applicable business units/supervisors to communicate with employees about what to retain and how to provide the information to the company for its business records; assign responsibilities, as applicable, for capturing such information; don't forget obligations as they exists with respect to departed and departing employees.

Issues and advice regarding resuming business operations, even on a rolling basis

When your business resumes, it may be on a rolling basis in any location or it may be limited to resuming in certain locations earlier than others. If such is the case, which employees return? What considerations should you use (e.g. positions, tenure, risk groups, sick leave, child care needs, etc.)?

  • Potential issue(s): Contract obligations, including but not limited to collective bargaining agreements; applicable mandates of the government in which you operate (some governments may still require or suggest that at-risk groups shelter in place); equal opportunity considerations; ERISA considerations; discrimination charges and HIPPA issues.
  • General advice: Start planning now for a rolling return to work; study applicable contracts for obligations, including any collective bargaining agreements; work with HR and legal to ascertain what criteria should be used for a rolling return, including doing a risk assessment of any criteria that may create issues with applicable laws, such as the federal, state, and local equal employment/anti-discrimination laws, leave act laws (e.g. the federal Family and Medical Leave Act), occupational safety and health laws, sick leave laws, child care laws, etc. (returning workers based on a health-risk assessment may have anti-discrimination law implications); ascertain what changes (if any) may be advisable in returning employees (see below); plan now for communication with your employees, customers/clients, vendors, and any other critical business partner; don't forget obligations such as reasonable accommodation obligations under applicable disability and leave laws (e.g. it may still be necessary to reasonably accommodate a worker by allowing that worker to stay at home or to make changes as to how that worker does work based on the health risks that are still present).

When your business resumes, are there workplace changes that you will be required to or should consider?

  • Potential issue(s): Whether to implement changes, such as taking employees' temperatures, requiring social distancing of six feet where applicable, limiting group interactions to a small number, forbidding or limiting travel based on critical business needs, etc.; allowing third parties (including customers/clients) access to your workplace; providing any kind of personal protective equipment and/or supplies; changing/increasing other health and safety measures, such as cleaning and maintaining a more pristine work environment; etc..
  • General advice: Start planning now for any return to work; involve HR, legal, and medical professionals in determining how best to return your employees to work and what changes to implement in the workplace, based on applicable considerations, including applicable laws such as the federal, state, and local equal employment/anti-discrimination laws, occupational safety and health laws, etc., best-known medical information, business needs, etc.; recognize legal and practical limitations relating to employee testing and medical information; document your plans and considerations being sensitive to preserving legal privileges; follow best practices and legal guidance on any issues, such as testing and equal employment opportunity.

When your business resumes, will there be overtime needs? Staffing problems?

  • Potential issue(s): Compliance with federal, state, and local wage and hour laws; employee overload.
  • General advice: Start considering how you will staff matters now and work to ensure compliance with applicable wage and hour laws; consider employee overload and how to mitigate the burdens of ramping up; recognize that some employees may not return to work (e.g. having quit for other employment; unable or unwilling to return for health, family, or other reasons; etc.) and have a game plan for staffing needs r emind employees of the availability of "help mechanisms" within the business, including the Ombudsperson.

When your business resumes, will there be morale and other considerations that it may be advisable to address?

  • Potential issue(s): Employee overload, morale, fears, etc.
  • General advice: Although some of these issues may not involve legal obligations, employers know that employee expectations have become a huge issue, particularly with social media, worker groups, etc.; consider what should be done to address morale and other identified concerns; assign responsibility for these types of issues; consider use of an Ombudsperson or other help mechanisms; recognize, as some commentators have suggested, that employees may even have PTSD, particularly in the medical and first responder fields.

What do you do if someone who returns to work subsequently has COVID-19 symptoms or has been exposed in the external environment to someone with COVID-19 symptoms or the virus?

  • Potential issue(s): Risks of exposing others; employee fears; potential for discrimination and/or retaliation.
  • General advice: Recognize these issues will likely be present; use the resources you are currently using to develop a plan for handling situations when they arise; involve HR, legal, business heads, medical personnel, and outside legal and medical counsel as appropriate.

When your business resumes, will there be concerns of claims if employees, vendors, and/or customers/clients become exposed to COVID-19 from your business operations?

  • Potential issue(s): Your employees, vendors, and/or customers/clients may be carriers, even if asymptomatic, and it is wise to consider potential liability implications; examine whether any potential claims will be covered by applicable insurance policies.
  • General advice: Start considering this issue now, and involve HR, legal, medical, and risk assessment/insurance professionals as necessary to determine how best to resume operations in light of these considerations; study information from the governments in the applicable jurisdiction(s) where work will resume; capitalize on what has worked well in this shutdown period; consult with your insurance broker now to determine potential coverage for claims.

Are there special discrimination and/or retaliation considerations that should be made?

  • Potential issue(s): Discrimination and retaliation based on considerations like age, actual and perceived disabilities, nation origin, etc.
  • General advice: Anticipate more issues (there will be potential strong and opposing feelings within your workforce) and make sure your HR and legal departments are prepared for and attuned to emerging issues; consider "reminder" trainings and communications for supervisors and the general workforce; watch for impact not just on employees, but others (independent contractors, customers/clients, vendors, etc.).

Should you have concerns about increased potential of violence in the workplace?

  • Potential issue(s): Increased risks from reactions of employees, customers/clients, and others.
  • General Advice: Anticipate more issues; make sure your HR and legal departments are prepared for and attuned to emerging issues; review the business's procedures and response plan for handling potential issues; consider whether such procedures and response plans need to be fortified/revised; visit with security personnel.

What else should you consider?

  • Potential issue(s): Company-specific and/or industry-specific issues and concerns.
  • General advice: Use your existing resources to identify areas; gather information from your key managerial players and seek their input on issues and concerns.

Applying lessons learned to future business considerations

Do you need to develop or revise contingency and response plans for future business interruptions, whether caused by medical/pandemic situations?

  • Potential issue(s): Increased liability and other exposure for such matters, as they may arguably now be "foreseeable."
  • General advice: Assemble key players and gather information; identify lessons learned; ascertain what plans need to be developed and/or revised.

Do you have adequate insurance coverage going forward?

  • Potential issue(s): Having sufficient business interruption protections; insurance contracts that may exclude the particular issue (e.g. exclusion of shutdowns resulting from infectious diseases).
  • General advice: Get your risk assessment department and/or outside consultants to examine your insurance coverage, spot issues, and identify deficiencies; ascertain whether coverage is available and affordable in the market and purchase as appropriate; if not available, consider appropriate reserves.

How should business operations change and what improvements are warranted from the lessons learned in this shutdown period?

  • Potential issue(s): Optimizing what you have learned (pros and cons) from this time period and making appropriate changes, not just for legal reasons, but also to become more competitive.
  • General advice: Form a task force to study what can be learned from your experiences; ask business units to identify what went well and what didn't; study efficiencies that occurred (e.g. was there greater productivity from remote work); invite suggestions as to how to improve not just business operations but also your business product; determine what warrants further consideration and/or implementation; d efine areas for cost containment; be prepared for those employees who would like to continue to work from home.

Litigation considerations; prioritization

Is your business complying with litigation holds, court document preservation orders, and statutes of limitations?

  • Potential issue(s): Litigation holds, court document preservation orders, and applicable statute of limitations laws contain obligations, where compliance may be at risk.
  • General advice: Make sure your inside and outside legal counsel, applicable business unit(s), and IT personnel are examining litigation holds and document preservation orders, and taking necessary steps to ensure compliance, including capturing all documents that may have been generated/stored on personal devices while employees were working at home; t rack all statutes of limitations on claims that your business may wish to bring.

Although much litigation has been placed on hold by court order and/or agreement, will your business's priorities concerning litigation be different when business resumes?

  • Potential issue(s): Litigation consumes significant human, economic, and other resources; identifying the company's top priorities on a short-term and longer term basis as your company resumes business.
  • General advice: Examine your litigation, threatened litigation, and potential planned litigation now; make a list of business priorities (as appropriate, ,include the CEO, CFO, GC, HR, business unit heads, and risk assessment advisors in developing the list); ask outside counsel to give you a list of options for proceeding (including settlement considerations, extending the pretrial and trial schedule, etc.); consider both the economic and human capital costs of litigation; issue appropriate guidelines as to how to proceed once business resumes.

Do you anticipate your business will be sued as a result of actions taken during the shutdown?

  • Potential issue(s): Litigation concerns from alleged violations of law, breach of contract, negligence, shareholder, and other claims.
  • General advice: Examine the potential of future litigation; under the direction of the GC to maintain privilege, assemble a team including representatives from the risk department, business units, the Office of the General Counsel, and HR; identify potential serious litigation and begin a game plan for handling such; a gain, remind employees of the obligation to preserve materials in accordance with the company's business retention policy.

Document retention information for the financial industry

Have your employees/representatives been communicating with clients using their own personal devices?

  • Potential issue(s): Rule 17 CFR §240.17a-3, 17a-4 record-keeping requirements; compliance with privacy rules regarding customer information and records; cybersecurity, including Reg S-P, 17 CFR §248.30, NAIC Model Insurance Data Security Law, NYDFS Cybersecurity Regulation, and similar state and federal regulations.
  • General advice: In addition to the ideas above, work with your IT Department to capture all communications and review any cybersecurity concerns; engage outside counsel and/or vendors if necessary; don't forget obligations as they exist with respect to departed and departing employees.

Did your business remain compliant with SEC requirements during the shutdown?

  • Potential issue(s): SEC compliance; to the extent certain SEC requirements have been modified or excused during the outbreak, identifying when those requirements go back into effect.
  • General advice: Monitor the SEC website for updates on compliance; confer with outside regulatory counsel, if necessary

Are you prepared to comply with Reg BI by the June 30, 2020 deadline?

  • Potential issue(s): Currently, the compliance deadline for Reg BI remains June 30, 2020, although the SEC is reportedly considering a delay; examining whether your preparations have remained on track.
  • General advice: Review the status of your preparedness now, and if your preparations are behind schedule, engage a team, including outside counsel, for assistance; monitor the SEC's news releases for any possible extensions; keep abreast of state statutes that may prohibit ongoing work of a non-essential nature; make sure the order trail for financial institutions has been properly maintained. 

Has any specific contractual obligation been excused or delayed due to the outbreak?

  • Potential issue(s): Breach of contract and other issues; notice issues; potential litigation.
  • General advice: In addition to the above general information regarding business interruption and force majeure clauses, review your contractual obligations (e.g. lease agreements, vendor agreements) to determine whether performance has been impaired, rendered impossible or impracticable, or excused, and/or whether force majeure clauses have been triggered; comply with any contractual notice requirements; confer with outside counsel, if necessary.

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