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The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and instinct. 

What were the major impacts from the evolving business situation, legislation, and healthcare changes? From telecommuting to PPP loans to force majeure clauses, what recommendations did we make to our clients as the first 8-10 months of the Coronavirus pandemic progressed? Listen to this episode as Nasir & Matt share their perspective from the 2020 Coronavirus pandemic.

Full Podcast Transcript

NASIR: Hey, how is it going? This is Nasir Pasha.

MATT: This is Matt Staub.

NASIR: Today we’re talking about everyone’s favorite subject in the workplace. That is COVID-19. I don’t know if anyone else is tired of talking about it, but we thought we’d share our legal experience and hopefully switch things up just a little bit for everyone here.

MATT: Right, and obviously, it’s been the major topic of 2020 just in general. For particularly in the employment sense too, for anyone that was going to an office every day, I would think, what, at least 90% of those people have been working from home at least in some capacity. Some still might be. From the employer side, there’s been a lot of challenges they’ve had to navigate since – what would that be, since March, essentially? We’re going to get into some of those today. What’s transpired over that time and some personal – not personal, some anecdotes from some of our clients on how they’ve navigated those seas.

NASIR: Yeah, we want to share our experience. When this first started out and I remember – it must’ve been February or early March when I remember I could not get on a phone call or a meeting where the first 10 minutes, 15 minutes was just occupied by COVID. The thing is, in retrospect, it’s almost kind of funny. Everyone would be making jokes. Okay, what does is this coronavirus? Then they would talk about the Corona beer. They would talk about elbow bumping. They would talk about, oh, let’s not shake hands and this and that. It was truly a joke. I mean, it was something that, oh, but I heard this. I heard that.

It didn’t take long. That was probably for a few days or maybe a week where – then not short after that all of a sudden it became a reality. Now people are going and staying home. Now you have the – you have these government orders nationwide, state, local, county that now are saying you cannot go to work. You have to stay home because this thing is spreading. Again, I don’t need to tell anyone because everyone has experienced it. It was a very interesting time in particular for us as lawyers, as business lawyers because now we’re receiving a flood of questions, and that’s really what we’re here to talk about today.

MATT: Yeah, there was a point when everybody seemed to not know a lot of things. Like you said, we had our clients reaching out to us. We were diligently working to research on our own then as best as we could. Again, not even all the answers were there, and there still are a lot of unknowns. At certain times, we had to make assumptions and what we think was going to happen and, obviously, convey that to the client. It was a pretty wild time looking back. We just wanted to speak on some of the key things that popped up over that time and where we were at then and where we’re at now.

NASIR: Matt, I’m curious what you think about this because during that time – and it’s not that it’s over, but from our perspective, we’ve dealt with all the major issues. I did get some kind of personal, professional satisfaction from that period of time because we were literally practicing some level of frontier law. I have friends in the medical industry, and they talked about how they were treating coronavirus at that time. It was frontier medicine, the concept of being that you’re away from everything. You have very little information. You have to start doing these things that are based upon instinct, based upon your experience and the knowledge that you had. All of sudden, you’re being put forth new facts.

In a way, I felt the same way. Not only were we dealing with new facts but also new law, in the sense law was being passed. Law, what I mean by not only from the Congress but also government state orders and these regulations that were evolving very rapidly, and there was some – I don’t know, some personal, professional satisfaction from it. I don’t want to highlight too much of the silver lining, but it definitely was there.

MATT: Oh, for sure, I mean, we do have quite a bit of healthcare law that we do and clients that are in the field and for them to make those accomplishments. Even on the other – on the genetic side, on the AI side, yeah, there’s definitely a lot of take some pride with how our clients have worked through this and elevated everything as a whole.

NASIR: Right, and everyone’s seen a lot of – a lot of business have pivoted either out of necessity or through opportunity, but let’s start with the beginning. The first thing is – I think we ought to deal with very quickly is for one day to another you have an entire workforce working from home. Telecommuting is, fortunately, from a legal perspective nothing new, but for a lot of businesses, it was completely new. Even where businesses weren’t designed to be done remotely or work done remotely, they had to adjust, and we dealt with that.

MATT: Right, I mean, just even from a logistical standpoint, I mean, obviously, every business is different but just your company property that’s in the office. It’s like do you know you’re going to need a – obviously, at this point, we’re all pretty familiar with Zoom or something comparable to that. I think Zoom took the – spearheaded the whole thing. You had to essentially find a way as a business to transfer everything that you had in the office setting in all these individual employees’ homes. There was a huge learning curve, but I think a lot of businesses were able to get through that fairly seamlessly. That was hurdle number one for a lot of these businesses. They just had to just figure out how are we even supposed to communicate with one another? How are we supposed to communicate with our clients? There’s a lot of logistical issues that arose. I mean, that was probably the big thing through March and then through part of April as well, I’d say.

NASIR: Yeah, and I think, luckily, from our perspective, that was pretty easy to deal with. We’ve dealt with telecommuting. We have telecommuting policies. These basic questions like who pays for what? What if we want to basically spy on our employees of what they’re doing at their house with their computer and these kinds of things? How sick pay works, or ADA accommodations work when you’re working from home, all these things are – that’s not frontier law. That’s been established very easy. We’ve done previous podcast and articles about telecommuting that we’ll link to this site. That’s pretty straightforward.

MATT: It’s probably a little bit different for where you’re at versus where I am at. I think in California, particularly San Diego, it’s pretty common to have employees working from home. Not necessarily permanently but at least on Fridays, one day a week or something to that effect. Not a big deal if they do. Texas, it might be a little bit different, but that might be my biased opinion on – or biased observation.

NASIR: No, you’re absolutely correct. I think, one thing with our clientele, I mean, we did have a couple clients in the hospitality industry and so forth. For the most part, our clients had office settings, and for the most part, everyone had the ability. It may not have been preferable, but they had the ability to work from home. We’ll tell you, look, we operate – a significant amount of our business is in Texas and California, and talk about polar opposites. I joke around in my – with our Texas clients is that, look, all you need to know is California law for employment law, and so long as you comply with them, you’re going to probably comply with every state in the country because they’re so on that one end. Clients have seen a reported measurable 30 to 40% drop in productivity when people work from home. Of course, there’s different philosophies of that, but I would say that our clients in Texas probably took that a little bit more seriously in the sense they were working much faster to work towards bringing those employees back to the office. Most of our clients in California, I think most of them are still working from home even today.

MATT: Yeah, I was thinking about that. I mean, obviously, you have the ones that there’s people that have to be physically present or the business can’t operate. Like you said, a restaurant, for example, obviously, you can’t have people working from home in that capacity or any type of when you have supervision over other people, like any sort of a center or something like that. Yeah, for the most part, the businesses that don’t fit those requirements, yeah, they’ve pretty much stayed working from home. I don’t know the exact numbers, but at this point, they’ve been able to operate. There was the added challenge of this, unlike your typical work from home scenario. A lot of schools and daycares were temporarily shut down or some are still permanently not in play, so you have kids running around. That definitely changes things. Everyone was in the – I had this conversation with a lot of different people, attorneys, clients, everyone. Everyone was in the same boat and, for the most part, was pretty understanding.

NASIR: Right, and I think that was a common issue here in Texas especially where you have employers wanting to bring workers back to work, and you have stay-at-home orders being lifted. Even if they wanted to come back to work, they still need to arrange childcare, and the schools are not open. The childcare facilities are not open. What do you do? For the most part, we like to work with clients that are – that have similar values as us, and a lot of them did make accommodations as they were necessary. There’s also some realities of some employers that aren’t able to do that.

I don’t know if you remember this, Matt. I’m reflecting as if this was a long time ago. I mean, we’re talking about six, nine months ago, but I remember where everyone was trying to figure out whether they were an essential employee or not or business. They were trying to figure out, okay, how can we justify bringing employees back when we have the stay-at-home order? If you guys recall, most states and counties refer to the Department of Homeland Security’s list of essential workers, and it would be almost comedic in the sense you could pretty much figure out a way to become an essential worker if you wanted to. I know lawyers were essential workers for the most part. Arguably, I remember going on forums, and people would debate the subtleties of that.

The natural consequence of that is what is it? At the end of the day, if you want to work, if you wanted to come into the office, you probably could justify doing so. Making your employees come to the work, for ones that don’t want to come work, regardless of the essentiality of it, there was going to be some pushback and some dispute. It would be hard to bring an employee back that, frankly, didn’t feel safe to come back to work, and of course, we dealt with those questions as well.

MATT: Right, I was going to say, I mean, we had those situations, and we had those conversations with our clients. Exactly what you said, you can find a – for the most part, you can find a way to classify yourself as essential, but you’re going to have those employees that still were uncomfortable or unwilling to come back. It’s a case-by-case basis. Obviously, we can’t give a hard, fast answer on what you can do. It is all based on the circumstances. I think those for the most part have been resolved. I would think some sort of resolution one way or another. Those were definitely I don’t want to say tough conversations, but it’s a tough decision for those employers to make on how to handle that and what to do. They have to be careful to not make any snap adverse decisions that are going to come back to haunt them.

NASIR: Right, obviously, I mean, I don’t need to state the seriousness of COIVD-19, but one thing that kept coming up is everyone had a different level of risk management to this. Putting aside any political beliefs – I don’t think this is a political issue, but there’s definitely differences of opinion on the severity of the risk. The problem with that conversation was the employers perspective of their risk assessment versus the employee, it doesn’t matter what they are. You have to go to the lowest common denominator. One thing that we even discussed in our office, for the most part, as far as we knew, everyone in the office are not high risk according to the CDC, but we don’t know whether a certain individual in the office may have an underlying condition that does not need to be disclosed to their employer, that they may actually be high risk, number one, or we don’t know if they have loved ones at home that can’t be separated that are high risk that if they were to contract COVID that they would be exposing their loved ones. Now all of a sudden this conversation about testing, masks, and all this has to be balanced out, and here you have a lot of, just to be frank, conflicting messages coming from CDC, coming from local government, and the law not really matching up perfectly with how the situation goes.

Our approach was just a very practical approach. For those that have worked with us know this about us that we’re not just about the letter of the law. We definitely go beyond that to think about the spirit of it in the sense that, even if it’s legal to do something, the question is how do you – what should you be doing, and what do you do to mitigate risk? We started projecting certain messages. For example, mask wearing, there’s differences of risks people have. We presented to most of our clients, look, your policy should be – not everyone has adopted this. Everyone has different perspectives on this, and I’m not even talking about the law here. It’s just a suggestion. If someone else is wearing a mask and you’re in close proximity to them, regardless of what the local order is, regardless of what the CDC says or doesn’t say, our advice is always to tell your employees, look, if someone else is wearing a mask, you wear a mask too. The idea being that the purpose – from what we understand, the purpose of wearing a mask is to protect the other person, and if you want to create an environment that is cooperative, that promotes a close company and culture of that manner, this is a very simple thing to do for your employees to create a safe environment.

MATT: I was going to talk about the evolution of how everything’s happened with COVID, and that was my next talking point.

NASIR: No, just repeat it, please, yeah.

MATT: My next talking point was just we – so just to recap, obviously, it started, hit the US. There was initially a lot of work from home and all that, and then eventually you had companies trickling back into the office. That’s when the mask orders and requirements like that came into play, and that was another thing that employers had to navigate was – like you said, if someone else is wearing a mask, you should probably wear it. Again, it’s not for your benefit. It’s for their benefit and their well-being, their safety or even mental health.

That was the next – obviously, there are orders that were put down by different states and counties within the states, but that was the next step. It’s like, well, what should my – should my employees be wearing masks when they’re in the office? What are the requirements? How far apart do they need to be? What kind of things do I need to have in the office? There was a lot of considerations. There were CDC guidelines. We’re able to work off of that, but it’s still a difficult thing for employers to handle.

NASIR: Yeah, it’s funny. The EEOC and CDC and these federal agencies, they were a little slow to react. For example, testing, okay, one of the major components of bringing people back to work was the availability of testing and those kinds of things. A question that came up early, very early was, okay, I want to bring my workforce back. Can I require them to test? This is an example of frontier law. Our firm took the position very early the answer is yes. You can require and mandate COVID testing. Similar to drug testing but even beyond that, this is more than just figuring out whether this person is intoxicated, and they’re in an unsafe work environment. This is the effect of them bringing in a disease that’s going to affect other people.

All the other arguments that would – when it comes to freedom and when it comes to the privacy of your employees, these kinds of things were basically trumped by the safety of fellow employees. That was our position. We probably took that position probably early March, and that was at a time when testing wasn’t readily available. It wasn’t until April, two months later that the EEOC actually took the position that that was okay. The problem was, even though that was our advice, it was very difficult, and we had to give this caveat. This is our opinion. There’s no guideline that the Equal Employment Opportunity Commission, the EEOC, has released that would justify or even the CDC that would justify as black and white whether mandatory testing is permissible, but that’s our position.

Of course, for two months, some clients that were risk adverse, they’re like, well, if we can’t mandate testing, then I don’t think we’re going to bring any employees back to work. It’s just too risky. That’s the results of slow in acting. Putting aside whether they’re to blame or not, it’s the point that this is a very volatile situation, and like I said, frontier law, there wasn’t guidelines. There wasn’t regulation to deal with this issue.

MATT: That got me thinking about the – I don’t want to say the reverse of that because it really isn’t but a situation where you have – I guess, on the other end of the spectrum, you have an employer. You’re talking about employers who mandating testing. What about the employers that didn’t want to do any sort of testing at all? We had that as well.

NASIR: We had that too, yeah.

MATT: Which obviously is more risky. At least in California, there’s been a new law that’s been put into effect. I’ll just real quick – I mean, it’s just – there’s specific notice and reporting rules for when there’s a – when you have an – employees have had exposure to either somebody with COVID or somebody that has symptoms of it or even somebody who thinks they were exposed to it, something like that. Now in California there’s a mandatory one business day you’re required to provide that notice to all of your employees. It’s a written notice. It’s for anyone who was in the same premises during this “infectious period.” I think you’re going to see more of that pop up.

NASIR: I totally forgot about that. I remember we used to get those questions. It’s like, okay, I had an employee called in sick. I’m pretty sure they have COVID. They were in the office two days ago. Who can I tell? Of course, if this – to highlight the issue, if someone came – if the same issue came in but it wasn’t coronavirus, it was, oh, I just – one of my employees just told me he has – he or she has cancer. Who can I tell? That’s not even a question, right?

MATT: Yeah, that’s easy.

NASIR: That’s easy, right? You don’t tell anyone. There’s no need to tell anyone, but when you’re talking about a communicable disease, then it’s like, okay, now it’s a different question. Can I name the person? Can I just say, hey, there might’ve been a possible case? The law is not as straightforward as you think.

Again, this is another area where slowly the EEOC and other state regulatory bodies started to give some guidance on how to do this. By the way, the answer to that, the general rule is that you can inform. You limit the amount of information as much as possible to the extent that those that have been exposed know that they’ve been exposed. It becomes goofy. When you’re in a small office, then you see someone that’s not there. It becomes obvious who that person is, but the principles still apply.

MATT: Yeah, I mean, it was the same thing with sports. A player on this team has tested positive. It’s like, well, it’s probably the one who’s not playing, I would suspect.

NASIR: Yeah, exactly.

MATT: I mean, it’s the best you can do. You’re still following the regulations at that point. We had that happen.

NASIR: Yeah, in fact, we had it happen multiple times now, I think. Now it’s business as usual, and everyone knows what to do. Almost everyone’s experienced it now. Then one thing I wanted to remember to talk about was this aspect of testing to the access to care. Very early on, there was two sets of legislation, and by now, pretty much everyone has heard of these. The first one is the Family First Act. I think it’s FFRCA, right? Is it FFRCA or…

MATT: Family First Coronavirus Act – yeah, I think so.

NASIR: Yeah, Family First Coronavirus Act, and then the second one was the CARES Act. Both these bodies of legislation were actually pretty incredibly dense. It touched on so many different aspects of – like Matt said, we’re having healthcare. It affected how healthcare operations work. It affected how sick leaves work. It affected how insurance reimburses tests and these kinds of things. That was again another area of frontier law to me. It’s like here you have a whole body of law that is not only being passed in a very short period of time but also being put in effect in a short period of time.

Keep in mind, when the Affordable Care Act came into play, which is another big thing, or any kind of tax cuts, or you had the, what is it, AB5 in California regarding the independent contractor law, the ABC test, all these big huge legislations that came in, there was a large period of time before when it was being decided to be passed and when it – and then when it did it get passed and then when it was put into effect. Within a one or two month period, these two bodies of legislation are all of a sudden put into effect, and we as lawyer had to decipher statutes that are frankly not – they’re not very well written. Any lawyer will tell you we threw – it’s not put together very well, and apply that to these questions. I don’t know. I get excited about it. Let’s be honest. It was a little bit of a stressful time for us because it was not easy. I mean, I think this is what really separated good or great attorneys from just the okay ones. Here you’re going back to the basics and figuring these things out as they go.

MATT: Oh, if you recall, too, it was a constant monitoring process. Like you said, the new law gets put out. We read it, interpret it best we can. Then there’d constantly just be updates with a frequently asked questions and other commentary. It’s like, well, what about all these – it’s like any sort of law. It’s like all these different scenarios and hypotheticals and just getting more details on that and trying to make the best decision you can based on the information available. Again, you mentioned how quickly it was all rolled out. You would expect it to be a little bit sloppy just with the amount of time. Like you said, we took the law. We interpret it, convey that to the client, and have them implement it. Like you said, it’s what separates the good attorneys that are on top of things versus the ones that aren’t.

NASIR: Right, I think the worst drafted part or just the most difficult part of the CARES Act was this whole PPP loan, and any business owner that’s listening right now knows what I’m talking about. It was such a difficult time for business owners to navigate that. There was so much bad information going out there. I mean, I remember talking to – getting on many calls with clients and their banks. These bankers didn’t even – weren’t even saying the right information. The problem is too is that you would see what would be in writing, and then the Treasury Department would release an FAQ and keep clarifying. It wasn’t very well drafted, the CARES Act, and so they had to keep refining and clarifying. I think, as lawyers, when we look at it, we were able to derive where we think the FAQs were going. I think, for the most part, we were on top of things, but when we would tell this to bankers and clients they didn’t believe us. It was like where does it say that or whatever? Then days later the FAQ would come out and clarify it.

A good example would – we had clients that were convinced that even though they were – they didn’t meet the affiliation rules and the SBA, meaning they were – how do I put this? They weren’t considered a small business on their SBA rules, and even though the CARES Act didn’t necessarily specify exactly how these definitions are going to be applied, it became clear to us that SBA has been around for a long time. What they define as small businesses or not and how the affiliation rules apply, that those that didn’t qualify under the SBA would not qualify for this PPP loan. That was not clear. Bankers were pushing people to fill out these applications. The thing is, these banks, they didn’t have any culpability. In fact, the CARES Act pretty much gave them a blank check to be able to give out these loans without any liability. Those that were liable and we’ve seen it are the ones that are actually signing these affidavits attesting that – all these things that the CARES Act requires.

Of course, those are coming to a head. You have literally millions of PPP loans that were actually given out that are now being investigated for either fraud. That’s the first thing to fall, but the second thing to fall that people don’t realize is that – I’m talking about outright fraud where people made up a business and somehow got a loan and falsified information. That’s one aspect. Then there’s another aspect that people who got loans that didn’t qualify and should’ve known that they didn’t qualify and now are going to – are not going to be eligible for forgiveness and going to be investigate and even come with some penalties.

MATT: Yeah, that whole process was the wild, wild West looking back on it. Yeah, like you said, you saw at the beginning – and news stories were pretty on top of it. You’d have the second category you mentioned, the companies that didn’t qualify but nonetheless moved forward and got the actual funding. You saw some of those give those back right away.

NASIR: A lot of the public companies, yeah.

MATT: Yeah, I mean, which in the end, I assume those ones are probably going to be fine for the most part just because they took the right action right away. I’m not going to say with certainty. Yeah, you have the ones – there’s been a lot that’s popped up, I mean, even now that are just straight up fraudulent. Do you remember? I saw the figure recently of what total amount has already been investigated and been fraudulent. It was pretty significant. I don’t know if you recall what it was.

NASIR: No, I don’t. I mean, I know it was a lot. I mean, there was a – I think over $130 billion that were funded, $130 billion. We’re waiting to see how much of that is actually going to be forgiven and paid back. I think we’re well beyond the PPP loans. I don’t know if everyone – anyone wants to go over the criteria. I think everyone’s talking about forgiveness now, right?

I should mention, since it’s topical, the Treasury Department did release a – was it the Treasury Department or the SBA? Basically, loans under $50 million or I’m sorry, $50,000, which are I think an incredible majority of the loans, those will be either not automatically forgiven but that process will be very streamlined, whereas if it’s above $50,000 then you still have to go through the process. That may or may not change. I mean, I think there’s been a big push legislatively to make that even easier. Of course, we all know what’s going on. We’re recording this before the election, and so we’ll see if – how that turns out, but we do expect some changes. Also, remember, Matt, a lot of our calls was also, hey, I’m trying to get a PPP loan, and I can’t get one, right? That was a lot of conversations.

MATT: Yeah, I mean, it was – that’s why I said it was the wild, wild West out there and putting in every contact you have that could possibly help you out with it. Everyone we spoke with I think finally got funding.

NASIR: Eventually, yeah. Remember there was a time that people were worried it was going to run out, and the fund did run out. They had to expand the amount of money. No one knew that was going to happen, and so people were like, oh, man, I couldn’t find a bank. I went through Bank of America or Chase. I’m not disparaging them, but some of the big banks were more difficult than others, and it seems like the result is clear. The community banks not only did really well.

By the way, the banks make money on these loans. I don’t know if anyone realizes that. They did really well in making money, but they also did an incredible service because they were able to process these. The problem is is that, if you were not a customer of that community or if you didn’t get early enough, then it was much more difficult to go through. Once the Congress expanded it, I think the PPP loan program ended with some money left still. We’re talking about tens of billions of dollars still left, I believe.

MATT: If you’re still looking, it might be the time to move forward with it.

NASIR: No, the deadline passed, Matt. Don’t tell people to do that.

MATT: Oh, yeah, that’s right, sorry. That’s okay. Forgot about that part.

NASIR: Yeah, that I thought was – that I think I was more stressed about because I was annoyed with – I was just annoyed with people giving bad information, and it was just so obvious. The thing is everyone was selling themselves as they know what they were talking about. Everyone presumes. Everyone’s their own Google lawyer. It’s like, look, not to be rude, but shut up because you don’t know what you’re talking about. Let me just tell you what it is. There was a lot of that.

We try to be – we’re polite. I don’t speak that way normally, but that’s what I was feeling. That’s what I was feeling in my head. It was like, look, just listen to what I’m saying. It was a tough time.

MATT: Yeah, this is one of the initial things. Maybe not the first week but I think definitely within the first month I had a lot of discussions about the force majeure clause.

NASIR: Right, I had to learn how to spell majeure.

MATT: Majeure, I shouldn’t say it’s always at the back of contracts, but I’d say a good percentage of the time it’s one of those throw in general miscellaneous provisions, which is crazy looking back.

NASIR: That no one thinks about, yeah. Go ahead.

MATT: Right, in a nutshell, what it is, what the clause is, it’s basically, if the for force majeure event is triggered, it can render performance – it could delay performance or excuse performance entirely. It depends on obviously the actual terms of the provision, but basically, what people were calling and asking about what was, well, we have this pandemic that’s going on. Am I able to get out of this contract? Like any good lawyer, the answer was always it depends. Like I said, there’s – it depends on a few things. One being was the actual pandemic – was that considered a forced majeure event? Surprisingly, you didn’t see that spelled out in the actual provision itself for a lot of these clauses. It just wasn’t something that was never even contemplated.

That doesn’t mean it’s not going to apply, but it wasn’t specifically named. A lot of times in these provisions you’ll see just a list of different – like fire, or embargo, or strike, or something like that. It wasn’t a listed triggering event just because, again, it wasn’t something that was really ever thought about. Conversely, now, I’ve seen it pop up a bunch and even written it in myself to some contracts, so I think you’ll see that moving forward.

NASIR: Yeah, I mean, it seems like every contract that – when you exchange basic contracts that you don’t expect any kind of revisions to, it’s like every attorney, ourselves included now, we have to double check the force majeure clause. It’s a lesson learned for a lot of us, but I keep hearing stories both firsthand and secondhand of – and this goes to business interruption insurance too is people that have specifically put in pandemics, disease, and these kinds of things or government orders that actually protect them in those events, whether it’s in a force majeure clause or one of the other topics we wanted to talk about, which is business interruption insurance. Tons of people have some kind of general liability insurance that may have a business interruption aspect to it. Those policies are typically triggered and designed like if you have – here in Houston, we had Hurricane Harvey. Business interruption insurance claims went through the roof where you had extreme floods. No one can go to work. The business was shut down. Because your business was interrupted, you gained some kind of benefit from that.

A lot of these policies did not cover pandemics, epidemics, disease, and in fact, many of them had specific exclusions of such. Then I keep hearing a lot of people, again, both firsthand and secondhand that specifically paid a little extra, negotiated their policy to include that, and actually were able to recover a sizable amount of money. I mean, if you’re able to trigger business interruption insurance at that right time, it could be a huge lifesaver. Think about it. We’ve all seen it. We’ve all seen the restaurants. Some have closed. Some have stayed open. Some have closed but then came back, these kinds of things, and some of the aspect of those that did come back may have to do with their insurance coverage. That alone could’ve saved their business.

It’s not to say that this is not a contested issue. Insurance policies are like any other contract. They’re made up of words that require interpretation, and so some attorneys have taken upon themselves to make some clever arguments. Some are good. Some are bad. It really depends on – I’ve spoken to a couple law firms that, specific attorneys, they’ve been – for the past six months, all they’ve been doing is reading policies. They’ve read it over and over again, and each one is, believe it or not, completely different sometimes from the other. You see big companies like In-N-Out, the Houston Rockets that are suing their insurance carrier for coverage. Some of them may win. Some of them may lose.

MATT: Yeah, and unfortunately, it’s one of those things too we’re not going to have answers on for a while just because, in general, these sort of lawsuits take time. The courts have been completely backed up with – just because you had the – they were shut down for a while or only – well, at least in California, only emergency items were being heard, and now everything’s still virtual for the most part. It’s a whole mess. I mean, I’m thankful that we do primarily transactional law because we don’t have to deal with all those – the issues and making virtual appearances and all that. Just going back to what you were saying, if it’s – yeah, I mean, it could be I think the business interruption insurance more so. I mean, that could be a lifesaver to keeping a business afloat.

NASIR: Right, and I remember we discussed – there’s this company called – what is it called, something Machina or something? They do legal analytics and research and things like that. Back in May of this year, end of May or so, they went through just federal cases because that’s – it’s more of a central database. They found over 300 federal lawsuits just at that time in two months that were related to COVID, and many of them were business interruption insurance claims. By the way, there’s probably another dozens of employment issues as well. Those are going to come up. A lot of them were also those force majeure, breach of contact kind of things.

Keep in mind, I mean, went here’s a dispute that occurs, it’s not often that it goes straight to a lawsuit. Typically, there’s a period of dispute trying to resolve. Here, after two months, people are filing. Why are they filing? Look, I mean, they’re in a desperate situation. If they don’t get coverage, some of them, or if they’re not able to get out of this contract, some of them, their business is done, and we saw that. We saw plenty of businesses unfortunately go under, employees being laid off, and that’s something that we didn’t talk about too. I mean, some of the unfortunate part of our profession is we had to deal with quite a bit of layoffs, a number of them, I mean, massive layoffs.

MATT: Furloughs.

NASIR: Dealing with the WARN Act, furloughs, all that stuff, even changing hours, going to part-time, all these changes. As you guys know, your employment – employees are some of the biggest liability both from an expense perspective but even from a legal perspective, and in a terminating event, anytime you terminate somebody, that is also the highest risk point of your relationship with your employee, obviously, right? It has not been easy times, for sure. Just to be frank, I mean, there’s going to be employees that think that you’re maybe using COVID as an excuse to terminate them for some other reason, so it’s not like just because COVID that you get a blank check. You still have to cover your bases.

MATT: I mean, I guess on the flipside of that, it might – there’s been scenarios where it helps too. Obviously, again, it’s all fact specific. We’re not going to get into any of those details, but you’re right; those are some – I mean, as a – if you’re the head of the business, it’s got to be pretty – it’s not a fun time for people that – to lay people off in the middle of a – especially at the beginning of a pandemic. I mean, anyone that saw the unemployment numbers across the country, it was a quite a bit of that.

NASIR: By the way, I think this is our most depressing episode.

MATT: Maybe, I’m trying to think what else.

NASIR: Nah, I can think of a couple.

MATT: I’d have to go back. I’ll start listening Episode 1 tomorrow and see.

NASIR: Right, I mean, I am curious of – I know everyone’s going through COVID fatigue, but we thought at least we’d share a little bit of our perspective. I think it is a little unique in a sense of how much we get to see and, frankly, just to – we’re very thankful, frankly. I mean, our firm has been able to sustain itself through these times, and I think that’s mostly because we’ve had the opportunity to provide these kinds of answers to our clients. I know our clients have been going through great difficulty as well, even with – as much of an answer we can provide, we can’t get – our firm can’t be alone in getting rid of this virus, for sure.

I am interested to see what people think as well. I’d love to hear from all of you what your experiences were during this time, especially anything that we may have missed. We definitely didn’t cover everything. Of course, we’re active on social media, so please reach out and comment to us. We’ll be free to answer your questions. If you want to leave us a very positive review on iTunes and all the other podcast platforms, that would be very appreciative. Obviously, that is one way that we can get more listeners, and we really appreciate that.

MATT: Definitely.

NASIR: I was going to say to – like last time, to thank our sponsor. I wasn’t sure if that was appropriate or not.

MATT: Did they come back after the “Behind the Buy” series, hopefully?

NASIR: Let’s put it this way. They’re very supportive, so maybe we should thank our sponsor. I mean, they’ve been the…

MATT: Yeah, you know what? I’ll have to check to see even if they paid for this ad, but we’ll just thank them again anyway.

NASIR: We’ll send them a bill.

MATT: Yeah, Pasha Law PC, business, corporate law firm practicing out of California, Texas, New York, and Illinois, so check them out.

NASIR: That is our episode. Honestly, I feel a little emotionally exhausted, so I think this is a good time to end it.

MATT: I mean, we crammed, what is that, seven months, eight months, seven, eight months into less than an hour? Yeah, makes sense.

NASIR: Very good, thanks for joining us everyone.

MATT: Yeah, keep it sound. Keep it smart.

Thank you for listening to our podcast. Click here to catch up on our other Legally Sound | Smart Business episodes to get more behind the scenes information. If you enjoyed your listen, please do not forget to subscribe and to leave your positive reviews.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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