“Spitballing” Enterprise Risk – Part II – Emerging from the Pandemic

It’s hard to believe, but exactly one year ago, we published Part I on Pandemic Enterprise Risk.  12 months later and the pandemic is still not over. But green shoots are everywhere as we ramp up vaccinations, federal relief money is pouring into the economy, and we finally see the light at the end of this very long tunnel.  There will not be a switch we flip that will end the current crisis.  Instead, it will be a LED light on a dimmer, where we slowly increase the brightness. In this light, what should legal and risk management practitioners be working on now?

 As last time, we have another laundry list of issues to consider, which include some lessons learned and how things may change as a result of Covid-19.

  •  Re-Entering the Office

Most offices are still shuttered for business as our new, remote work lives continue, with endless “zoom” meetings and hours of screen time.  However, it is not too soon to get ready for “reopening”.  First things first, we will likely be wearing masks and maintaining physical distancing for several more months.  Whatever policies you put in place in April of 2020, it’s time to review them and figure out what changes should be made, how it gets communicated and rolled out. Have you checked your ventilation systems?  OSHA is now awake in a new administration and there are recommendations on workplace safety to review issued on January 29th. In addition, you need to continue to check state and local guidance as they continue to change day by day.  You can expect easing to continue even as we are in a “fourth” wave of cases. What if people don’t want to come back yet? Some states are allowing employee choice, and there is always the issue of reasonable accommodation under the ADA.

  • Remote Work

It seems inevitable that remote work is here to stay.  If your work entity was not remote before, you will need to check your policies to see how they apply to remote work.  Who will be allowed to work remotely?  Everybody? Some? Some of the time?  

It seems likely that requests for reasonable accommodation are more likely to be allowed.  Be consistent and centralize decisions.  Then develop a remote work policy on things like:  productivity; confidentiality; attendance; safety; dress code; and how discrimination policies apply. 

There is also the multistate dilemma.  Many folks have moved, but your entity may not know where – you could now be subject to new tax, workers compensation, insurance, wage and hour laws, leave laws, etc. in states you know nothing about. You may need to require employees to identify where they are, where they plan to relocate to maintain some control.  Alternatively, requiring some limited in-person presence may manage the extent of this issue.

As an HR matter, remote work may open some opportunities as you can now more easily recruit on a national basis, more cynically looking to lower wage locales.

  • Vaccines

This big debate is whether you can/or should require vaccinations?  On the one hand, the EEOC issued guidance at the end of last year that suggested you can.  Flu shot policies are instructive in this respect.  On the other hand, because the vaccines only have an “emergency use” designation, there is legal uncertainty and litigation has begun.  There are exemptions from such requirements (e.g., for religious beliefs, health issues). Can you incent employees to get vaccinated (bonuses, prizes, awards)?  Or are you better off providing education and allowing time off to get vaccinated. 

  • Commercial Issues

What is the status of any of your contracts that may have been suspended?  As commerce resumes, do you begin to lift any force majeure conditions you have declared or which have been issued against you by business partners? 

  • Litigation

Courts are reopening.  Make sure you check any notifications and protocols in place for resuming in-person appearances.  Also, many have learned that discovery and arbitration/mediation can be very effectively conducted remotely, creating great efficiencies.

  • Regulation

Federal, state and local requirements and guidance are as inconsistent as last year.  Continue to stay up on changes, especially any new advice from the CDC.  Several agencies and enforcement entities issued temporary advice and guidance which is also beginning to change. 

  • Government Largesse

Keep an eye on the new American Relief Act.  The amount of money and breadth of dispersion is unprecedented.  There are many advisors that keep up on this to see what may be available (a more liberal PPP, more tax credits, etc.). 

Other issues that may arise include the need for the amount of physical space going forward for businesses.  Many entities are looking to exit long term leases and reduce their footprint.  This is a generational issue, but more traditional entities may resist these changes. The same applies to traditional business travel.  

When we finally reach the “end”, the 10Q will be back with Part III.  If you haven’t already, revise your contracts to take pandemics into account, and carefully examine your insurance policies and discuss enhanced coverage with your brokers as needed.  There is substantial litigation on-going and efforts to change state law on the issue of business interruption. At the federal level, claims for business interruption have uniformly been unsuccessful.  At the state court level, the story is more mixed and unfinished.

Stay tuned!

Jonathan M. Broder (LAW ’83) is a retired Vice President of Corporate Development and General Counsel for Conrail. He managed Conrail’s legal and corporate affairs, as well as its real estate and business development departments. Jon is currently a Temple 10-Q Editor and an Adjunct Professor at the Temple University Beasley School of Law.

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