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March 18, 2020

COVID-19 (“Coronavirus”) LEGAL UPDATE: FAQs FOR BUSINESSES

This briefing is not intended to and does not constitute legal or medical advice. Questions concerning how the law applies to your specific factual circumstance should be directed to one of our attorneys at the firm.

What is COVID-19?

COVID-19 is a respiratory virus that causes illness ranging from mild to severe and, in some cases, can be fatal. Symptoms typically include fever, cough, and shortness of breath. Some people infected with the virus have reported experiencing other non-respiratory symptoms. Other people have experienced no symptoms. According to the CDC, of COVID-19 symptoms may appear in as few as 2 days or as long as 14 days after exposure.

How can COVID-19 impact our business?

COVID-19 has wide ranging implications for business, ranging from economic to labor- and employment-related issues. Best practices for conducting business until the COVID-10 situation is firmly under control is to remain current on information provided by reliable sources, such as www.osha.gov, OHSA’s Guidance on Preparing Workplaces for COVID-19, www.cdc.gov, www.coronavirus.gov, and the CDC’s Interim Guidance for Businesses and Employers.

How Can we prepare our business to handle COVID-19?

According to OSHA’s Guidance on Preparing Workplaces for COVID-19, for most employers protecting workers means emphasizing basic infection prevention. Basic infection prevention entails, among other strategies:

  • Emphasizing proper hand washing and, where hand washing is not available, the use of sanitizers;
  • Encouraging workers to stay home if they are sick;
  • Educating employees on proper ways to cough and sneeze;
  • Ensuring tissues and trash receptacles are available; and (among other things)
  • Exploring more flexible work sites and schedule, so the company can better effect social distancing strategies.

Businesses should also develop policies and procedures for prompt identification of visibly sick people and take appropriate action. Anyone exhibiting symptoms of acute respiratory illness, such as coughing, sneezing, runny nose, wheezing and/or shortness of breath should be separated and sent home. Special circumstances may apply to individuals with pre-existing disabilities, so please consult our firm prior to taking action for these individuals.

When possible, businesses should consider developing and implementing policies that encourage and foster an employee’s ability to work from home to effect social distancing, and so they can recover from sickness or care for sick family members without risking exposure to the greater workforce.

Must we pay employees who are not working?

Under federal, Missouri, and Kansas law, the answer – generally – is that employers are not required to pay non-exempt employees for work they do not perform and are not required to pay exempt employees for full-week absences in which they perform no work (with variations for state and local laws). However, on March 18th and 19th of this year, President Trump signed into law the Federal Emergency Paid Sick Leave Act in Response to Coronavirus (COVID-19) and the Families First Coronavirus Response Act of 2020. These Acts, along with laws passed by a number of states to address the economic harm of COVID-19, will have an impact on the payment obligations of both large and small businesses to pay for COVID-19 related leave, with some limitations. For example, emergency paid sick leave may now allow employees to take paid sick leave if the employee is subject to federal, state, or local quarantine or isolation orders related to COVID-19. The Acts will take effect April 2, 2020.

The Acts’ expansion to the Family Medical Leave Act (FMLA) and paid sick leave regulations do provide for a certain number of unpaid days off and caps on the total amount payable to an employee. If you have questions on these rules, please contact our firm.

In addition, there are fact specific exceptions, and an employment contract may have rules for compensation that supersede federal and state law. It is important to review individual employee contracts for clarity.

We will continue to post further updates on these changes and employer’s obligations to pay during sick leave.

Must we allow employees to use sick time or vacation time if on leave with COVID-19?

As a general rule, there are no statutory limits or restrictions on how an employer treats vacation and other leave time, but please see the answer to the FAQ above with respect to changes made by the Acts. But there are fact specific exceptions. In addition, an employment contract or workplace policies may have rules concerning leave that supersede federal and state law. It is important to review individual employee contracts and workplace policies for clarity.

May we send home employees who appear sick?

Yes. Sending home an employee who appears to have a communicable illness does not violate the law.

If we send home an employee, will be we at risk for discrimination claims?

The laws governing discrimination claims do not prevent a business from following the guidelines and suggestions made by the CDC and sending home employees who exhibit symptoms. What’s important to focus on is treating employees similarly, and regardless of age, race, national origin, religion, disability, veteran status, gender, or other protected category. For further questions, please see the following guidance on coronavirus issued by the EEOC.

Are we required to allow employees to telework?

Maybe. For employers covered by the Americans with Disabilities Act, the EEOC has stated that employees with disabilities that put them at high risk for complications from COVID-19 may request telework as a reasonable accommodation to reduce their chances of infection. However, an employer should not ask employees who do not have symptoms to disclose whether they have a medical condition that the CDC says could make them especially vulnerable to complications.

Can our employees make workers’ compensation claims?

Probably not. Unless your employee is a health care worker or first responder, the determination will be a case-by-case determination. Moreover, a compensable illness or disease must arise out of the course of employment and must be caused by conditions peculiar to the work.

Are there special rules for unionized business?

Yes. For additional information on these rules, contact Larry Pittman at 816-210-9680.

Should our business be reviewing force majeure clauses in commercial contracts?

Yes. Force majeure is a fact- and contract-driven analysis, but epidemics are a common item included in these provisions. By way of background, a force majeure clause is a common clause found in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the parties’ control prevents one or both parties from fulfilling their obligations. In practice, most force majeure clauses do not excuse a party’s non-performance entirely but rather “suspends” a party’s performance for the duration of the event. If in question, the safest course may be to negotiate contract amendments versus invoking a force majeure clause, otherwise parties should be reviewing their agreements to see what options are available during COVID-19.

If our business is engaged in a private placement, should we suspend the offering?

It depends. The Securities and Exchange Commission (“SEC”) has not prohibited securities transactions during the COVID-19 event. It has, however, issued both a press release and exemptive order that can be helpful to companies engaged in private offerings.  The SEC has reminded companies of their disclosure obligations under the federal securities laws and that if a company becomes aware of a COVID-19 related risk that would be material to investors, the company should avail themselves of the safe harbor in 21E of the Exchange Act when making forward-looking statements or information available to prospective investors related to the outbreak. Timely disclosure of events impacting industries affected by COVID-19 will also be important for satisfying disclosure obligations for companies.

What should we do for director, shareholder, and manager meetings?

Our firm has resources to help host and manage corporate meetings.

How can we communicate with Conroy Baran?

Conroy Baran remains committed in these trying times to assisting our business clients with their day-to-day corporate needs, as well as their mergers, acquisitions, sales, reorganizations, succession planning, corporate and securities needs, and can accommodate safe client contact through video conferencing and screen sharing, as well as the usual talk, text, and email. 

Kyle Conroy: 816-388-9686

Robert Baran: 816-616-5009

Larry Pittman: 816-210-9680

Christopher Stewart: 816-522-1582

Andrew Potter: 719-359-2701

Bob Reynolds: 417-496-2467

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