KOI WEBINARS | EP. 2 | 5.7.20
business rebuild: legal considerations for the new normal
There's no denying it - when the time comes to reopen for business, things will certainly be different. Join us as we chat with Tawfik Goma, founder of Goma Law, about topics including:
Business Disruption Clauses and Force Majeure
Legal Guidance for Reopening (Employment, Insurance, Liability)
Balancing Privacy and Safety Measures
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COMPLETE TRANSCRIPT:
Jonathan:
We do have a lot of ground to cover today. So we'll we'll jump right in. So you've got John here from quite creative space. This is our second webinar in our, in our series that we're dealing are launching regarding Kobe and everybody kind of working remotely and what the business landscape is looking like these days, what it's looked like, what it's going to look like. It's it's interesting. Every day seems the same like we were just talking about, but sometimes it seems entirely different cause we don't know what the next day or week is going to bring for, for ourselves personally as well as for our businesses. So today we've got tophi Goma from Goma law here. Top peak is a it's actually a member of, of coin. He's been a huge help with lots of, lots of discussions with us.
Jonathan:
Always has a fresh perspective to bring, obviously plays the legal perspective pretty well. And so today he's going to be talking with us about quote unquote business rebuild. So legal considerations for the for the new normal. So what we're going to be dealing with as businesses moving forward. I think having a legal perspective is, is crucial right now. A lot of people have a lot of questions and I think taking a legal approach is, is a healthy one and I think traffic's going to really shed some light on some really interesting topics today that that I think are nagging and all of us as business owners. So tough week. If you wouldn't mind telling us a little about Goma law and and then maybe jumping right in. I know you've got some great slides and some great info, so take it away, man.
Tawfik Goma:
Alright, thanks John. Yeah. I've I have a one office firm. I started a coy last June. My practice is you know, I do a little bit of everything related to business law from outside general counsel. You know, my core practice areas are really technology transactions and IP. But I, I do everything from startup formation to, you know commercial transaction work and advisory work. You know, I know these guys at koi for some time and you know I'm happy to do this and as I was mentioning to them you know, I think this would be great to be like more of a conversation. This is uncharted territory for everybody and everybody's business is going to approach this a little bit differently and the challenges that you're going to have and, and the ways that you're going to have to address them are going to be pretty unique to your business.
Tawfik Goma:
And so hearing back from, from the group, from the group what you're experiencing things like that, we will, I think make this a lot more productive for everybody. I will, you know, touch on a lot of different topics. It's going to be really primarily just kind of scratch the surface on some of these things and get people thinking about it. And, and hopefully it'll be productive for you guys. So I'll jump right in. Because I'm a, an attorney, this is the standard disclaimer, right? This isn't legal advice. The goal here is to give you some general info considerations for your business. And like I said, the facts and circumstances, you know, hear more than maybe anything else are really going to dictate you know, the, the type of advice that you need to follow and, and the plan that you need to implement for your business.
Tawfik Goma:
You know, what they're talking about now is basically a plan that's tailored for every single business sector and obligations for every single business. And so you're gonna really have to examine that and come up with innovative ways to deal with it. And it's really an opportunity. As well as, you know, it's a big downturn obviously. And, and it's a bit depressing in some respects of course, but you know, there's going to be companies that make it through this and those companies are going to be on either ones that pivot and come up with innovative solutions, not just for, you know, how to continue their business, but also how to deal with the legal impact that's coming and the requirements that are going to be imposed by local municipalities in the state to get you up and running. So that's the disclaimer.
Tawfik Goma:
Having said that, we'll, we'll try and dig in as, as a deeper level as we can and, and go through some examples. So some of the topics today, business disruption clauses and contracts and what's commonly referred to as force me or clauses and contracts which I imagine that a lot of you have dealt with. We were just talking before jumping on that, that, you know, the first thing that everybody did was look through their contracts and see what, what the clause actually says. So we'll talk through some typical language that's there and things to look out for and also things to consider going forward as you renew contracts and enter new ones. So legal considerations for reopening our business, both the employee safety requirements side, you know, just what we know so far. Liability and insurance considerations, things to think about.
Tawfik Goma:
And best practices and resources for, for workplace safety. So you know, I'll point you to some things that I've found useful and helpful that are business specific. And maybe you know, give you some high level guidance on, you know, these are the things that you need to implement and start thinking about. And then finally this might, you know be more on the tech side is balancing the privacy and safety measures and, and what's going on right now with you know, privacy and contract tracing measures that are being rolled out from private sector, public sector implementations and what it means for your business and the things that are coming down. Pike.
Tawfik Goma:
All right, so I'm jumping right into business disruption. So con, you know, I want to start with, cause I've actually had a number of clients and potential clients and friends you know, say, Hey, how do we get out of this contract without, you know, just, just because they feel like they, they want to get out of the contract. Because of the downturn in economy effectively. And I, you know, I always want to start with and emphasize that the contractual terms are granted often, right? There's fallback provisions and kind of impossibility and practicability frustration of purpose that I'm going to talk through right now. But if the contract is clear on, on what it is that you can do and can't do those terms are gonna govern. So always start with the contract. Always start with a review of the contract.
Tawfik Goma:
Having said that, there's some based defenses that you should also consider assuming the contract is silent on some of these topics. So basic defenses are impossibility. You know, this is the legal definition, right? [inaudible] An unexpected occurrence whose risk was not allocated by agreement or custom and whose occurrence made performance impossible. So an example would be a change in the law, which you know, renders performance of the contract illegal. You know, a really good example of that would be you know, if you were involved in some kind of conference situation or Mmm, you know, some kind of performance where you were going to have a big gathering and the law says you can't have a gathering of more than, you know, 10 people. And so now that's changed the circumstance and, and you holding that performance is now illegal.
Tawfik Goma:
Mmm. So that's a classic example of that. Now, what the remedies are and who's responsible for what and what bookings were done. That's all gonna fall back again to the contract and mitigation principles. Other circumstances that the trigger this, you know, unfortunately death or disability destruction of property that that could actually, and I've had you know, I've talked to people that have been in the situation, so importers of produce for example who've had their products, you know, hold up somewhere because supply chains that are disrupted you know, so perishable goods the property is destroyed. So obviously you can't perform under the contract or impossibility due to the activity, other parts of the contract. So that would be the other side, not permitting you to move forward with completion of the contract. Right? So if you have a landlord who's saying, no, you can't have access to the building even though maybe it's lawfully you know, you can have access to the building, this is moving forward. You know, maybe today is not the situation, but in a couple of months that might be the case, right? It's going to be difficult, obviously, for you to perform under the contract that you have with them. If, if that's the position to take them.
Tawfik Goma:
Other ones are impracticability frustration or purpose. So that's if the performance is impractical by an event, who's non occurrence with an assumption of the, of the contract. So I'm just going to give you an example. Like if you were hired to do a school photography session, right? And you're going to do portraits of, you know, the graduating class at school
Tawfik Goma:
And the idea was you were going to show up to the school and take pictures of every, everybody there in one room, right? They're gonna come in, you're gonna take a picture. The next one comes in well now schools are closed, right? And you can't have those gatherings. But you still have a contract to do a photography session. Is it impossible for you to do it? It's not right. You could like go to everybody's house and take individual pictures, right. On demand and, and still fulfill the contract. Is it practical? No, it's completely ridiculous. Right? it's not something that either side contemplated when they answered it in the contract. And a lot of those contracts are going to be silent as to, you know, the place that you were supposed to perform. Right. It was just kind of an assumed industry thing that, yeah, okay, I'll, I'll sign photographer to take some pictures. It just assumes that, yeah, we're going to do it on school premises for example. So that's it. You know, an example, classic example of something like that. But you could see it maybe transpire in other lines of business.
Tawfik Goma:
And I, I talk really fast. John's so if there's something that you want to jump in, just yeah. Stop it.
Jonathan:
Yeah, no, this is, this is great. And, and anybody that has a question, feel free to pipe up. We're a small group today, so if anyone wants to just unmute themselves and ask a question or drop it in the chat, if you'd rather do that and then we can, we can bring it up with tophi. That's fine. But no, I, I know there's a lot of, there's a lot of content here, so I want to make sure that we get through it. And then we also have some time afterwards as well to kind of, once we, once we kind of digest it and distilled it to, to talk about it, cause I think continuously adding examples to these while you are speaking quickly, it does shed a lot of light on this. So you kind of have the technical with a real world layer on top. So I think you're, I think you're rocking. You're doing just fine. Take it away.
Tawfik Goma:
Alright. So you know, other quick ones bankruptcy statute of limitations, which is, you know, that that means the term that you could bring a case you know, for, for breach of contract. And a lot of times that's, that's actually stipulated in the contract, which would be a contractual limitation that says when and what your remedies are. So again, everything kind of falls back top level to the contract, right? Because you see impracticability and possibility are all based on unforeseen circumstances, right? So in order to trigger these defenses, there needs to be something unforeseen. But if the contract actually foresees this and you can actually start seeing this going forward, right? When you're doing renewals on new contracts, you're going to have people and attorneys are going to be drafting things for what happens in a second wave, right? And what happens if we end up shutting down again in the fall or the winter, right? Every contract should be revisited on that. And so then it starts becoming less unforeseeable, right? It starts becoming more of something that the parties actually negotiated over and included in the term. And so these
Jonathan:
Quick question there, and it's, I think we were speaking from kind of a personal place with, with our business where you've got this you know, coronavirus hits, you have this big, just everything gets shaken up, right? And now we've got these plans to slowly reopened. But in a perfect world, it would never happen again. This would never happen again. However, I think we all know that there could be kind of a second, second arc here where it really could have. But again is there any place in a contract or any, any opportunity in a lease where you could bring up to your landlord and say, Hey, I know that we don't have you know, our, our commitment is for another four years or something, but can we kind of revisit the language in this prior to the the expiration of the lease itself?
Tawfik Goma:
You mean by way of, right. Do you have a right to amend the contract or do you mean, I mean, of course you, you, you're always able to renegotiate, right? You could always go back to you or you know, another side of the contract and say, look, you know, neither of us thought this was going to happen. We want to establish a, obviously a partnership here. You know, and, and I think, I think most businesses want to do the right thing, right? They value as, as another partner. And if it's not you, then who else are they going to? Right? Cause you could declare bankruptcy and they're not going to be able to fulfill the spot. Right? and so businesses want to meet halfway and negotiate, right? And, and make things work for both sides. So yes, you could always negotiate whether you have the right to right or the leverage to is a different question, right?
Tawfik Goma:
Sure. and that really depends on the terms of your contract. So if your contract says that you can revisit this or amend it based on certain conditions, a lot of contracts do say that or say some things about, you know expectations or you know, intent or revisiting it annually, right. Those, those kinds of loose provisions, right. Like least reasonable measures, things like that, then you could look up, look for that and use that as a hook for a discussion. But without that, it's more about, you know, good faith negotiation with, with who's on the other side.
Tawfik Goma:
Yeah. Yeah. And so the last one that I have here, and I, you know, I put it last because I think it's at the forefront of everyone's mind and, and people talk a lot about it, but I just want to frame it around what else. You know, there are you know, what other defenses there are. And so force me, yours is basically the contract clause that calls out for like these unforeseen circumstances, right? Acts of God, acts of nature. And that's a typical typical language that's used in these clauses. You know, here are some of the elements, right? When you're looking for it, fine. You don't find the clause in your contract if it exists. And a lot of contracts have, you know, a boiler plate CLOs that, you know, many times nobody ever really thought they'd have to rely on.
Tawfik Goma:
But here we are, right? There's going to be a triggering event definition, right? It's going to say acts of God or it's going to have a delineated list of things, right? It could say hurricanes, floods you know, ideally it would have said pandemics, right? But most of them didn't. They say acts of God, acts of nature. The ones that you know, I've seen, Mmm. There's going to be some notice requirement, right? Where you're going to be, you know, if you want to enforce it, you're going to have to give the other side notice that you're triggering this clause. Mmm. There's going to be some non-performance period. Typically, not always, but a lot of the clauses will say, look, give me, you know, if this is triggered, I'm giving you notice. I know I have maybe two months to be able to, you know, perform.
Tawfik Goma:
So now I have kind of this pause effect to be able to perform. This is going to be some mitigation requirements potentially. Right? It's a, you know, what it is that you have to continue to do. So many of the clauses will say, you know, you have to at least continue to perform the things that you can perform. Wow. This is going on. Right? So if you're a service provider and you know, part of your work can still go on while you work from home or something. Oh, well, you know, businesses are shut down or everything else that's going on, you can still maybe partially complete the contract. And so that might be part of your force, meaner clause. There's going to be a contractual remedy. Right. and there's, there's also, you know, potentially the availability for termination for the other side, right?
Tawfik Goma:
So if the other side says, okay, it's been too long good clause could say, you know, if it's been two or three months, then you know, I have the right to just terminate the contract. Okay. And so those are the typical elements of applause. I didn't really want to dig into a legalistic claws. I do have one on the back end of the slide, just as an example of something. You know, that I've used you know, that people can reference if they want, but I didn't think for the purposes of this discussion it would be why is to get through the the legal pros of it.
Tawfik Goma:
Mmm. So if you're doing the review right, you're going to want to go through that analysis. You're going to want to identify the type of events that trigger the, the cost. And a lot of them say, like I said, act of God or they'll say active nature. But a lot of them say active job. Right? And so then the question becomes what's an act of God? Is, is Colvin an act of God? What about downstream effects of code in 19 are those also, you know, part of the app got definition. Okay. And so if you go back to like the economic crisis in 2008, you just an economic downturn in general, it's not an act of God, right? So, you know, the whole market collapsing, that's not an act of God in a vacuum, right? In 2008. Things like natural disasters, hurricanes, earthquakes, tornadoes are classic, you know acts of God, right?
Tawfik Goma:
Or acts of nature. Good. 19 is it, you know, there hasn't, there's going to be decisions on this. They are, they're comic. You know, New York courts are, are pretty much closed for the most part, for any new commercial cases. So it might be a little bit, a little bit of a while. I think I've only found one New Jersey case where someone was trying to close on a property and the funding didn't go through. And they kind of blamed it on Cove at 19 and they were able to actually get out of, of that contract. But there's going to be a lot of cases on this and they're each going to be suited to the scenario, right? Of whether this was foreseen or, or, or not. And at what point in the chain is the disruption, is it just, you know, obviously if it's something like related to someone getting sick as a result of coven 19, you're a lot closer to the quote unquote act of God, then you know, some downstream effect of the government acting, shutting down offices, which in turn caused some other effect, which in turn caused you not to be able to form the contract.
Tawfik Goma:
And so that's the gray, right? That becomes the, okay, is this still fall under this, this force forced me or clause? Interestingly, I've seen foreign governments in trying to actually have been issuing enforcement York certificates to their businesses. What that means is they're basically saying, look, as a, as a government, we're saying that what's happening here is, you know, should trigger any force New York clause in anybody's contract. So they can take that certificate and then go to their counter party and presumably argue that, you know, this is evidence of course me or now I don't know what binding effect that has, but I know that I've seen that you know, being reported.
Tawfik Goma:
Mmm. And then, you know, moving along through the, the checkbox, right? You're going to determine the remedies or period of non-performance that you're permitted. And then you have to consider if performance has truly become impossible or if there's something in between that you could do, right. Something that you can mitigate to the performance. So moving to, you know, kind of wary of time, cause I want to get to the business side of things as well. Mmm. You know, think about alternative language, right? That's, that's suited to your business as you renegotiate contracts, right? Definitely think about, you know, including something like epidemics and pandemics. Know the difference, right? A pandemic is something that, you know, it's, if you have the language pandemic, you're probably relying on somebody like the who declaring that there'd be an international pandemic. Know what that trigger is.
Tawfik Goma:
Cause that would probably get argued too. So do you want it to be stricter? Do you want it to be narrower going forward? Is it something that that you know, will affect you as the service provider? Or is it going to be something that is gonna affect the other side? Right? And it depends on whose side is it gonna affect that, that you're gonna want to craft this language, right? You know, you have to predict that this type of disruption might happen again. And if it does, who do you, which side do you want to be more protected? In that event? Right? And you should craft your language based on that. Now stasis. So don't use the same language on every contract, whether you're the vendor or the service provider. Think about the differences and who's going to be impacted. Mmm. Have a clear notice requirement. You know, outlined a period of delay or fall back performance requirements. So so that, you know, what you're out is if somebody, you know, exercises this you know, how long they have, it's not indefinite, right? That you can fall out of this and say, okay, it's been two months. I need to terminate and find another vendor who can who can supply me the products or who can perform the service that we agreed to.
Tawfik Goma:
And then finally, future agreements. You might actually want to consider a covert 19 clause and not even call it force New York. The reason for that is, you know, the, the, the enforceability of those causes of forced me or clauses is, is kind of predicated on unforeseen circumstances. And I would argue that another shutdown in the winter is not really unforeseen anymore. Right. It is a very plausible scenario. So don't even use that language. Just have a covert 19 clause that says, you know, in the event of another shutdown, here's what we agreed to. Here's, here's how we're going to proceed.
Tawfik Goma:
So that that's forced. And you're, and that's business disruption clauses. I know I flew through that. I wanted to get to the business side and what's been going on and, and planning. But maybe if there's questions on that, Mmm. We could take them kind of on the back end. They'll probably stick around a little bit longer. I'm in the zoom call. Mmm. So moving to kind of business planning and you know, I pulled some slides out of call most recent nations. Right. because that's, that's the only place that you get yeah news directly. Right. but what you'll see is that it's not so much of a plan as as just like a really loose framework. Right. and it hasn't changed much. So every day goes by, you know, it's May 7th, now, this is from May 4th.
Tawfik Goma:
The, you know, the meat hasn't really been put on the bones. So at present New York pause, you know, technically ends May 15th, you know, the idea is we're going to transition to what's called a phase, that regional reopening plan. So it was going to go region by region and do determinations and then industry by industry and do determinations. And those two things are gonna work together. You know, the expectation right now is that downstate New York is going to be slower to open. At least that's my expectation. I'm interpreting, you know what, what I'm seeing in these press conferences again, also my interpretation is that is likely to have two to three plus weeks between phases one and two. Right? they're talking about, okay, let's turn phase one on then monitor the effects and then kind of turn it back and see what the impacts are.
Tawfik Goma:
And then it's not really knowing what, well, how long until phase three. Right. that, that's not really clear. And then the other big thing is that it's, it's evident that the state's relying on businesses to come up with their own plans. So there everybody's pushing things down because nobody really knows. Nobody has a playbook for this. Right. And so at the federal level, pushing it out to the state level, the state level is pushing, is going to be pushing this down to the municipal level, right? The regional level. And they're going to be pushing it down to the businesses to come up with their own plan. Right. Whether it's, you know an aggregation of the same type of business. They, you know, consortium get together, but they're almost, from what I understand, they're expecting businesses to come up with their own plans, submit them for approval, you know, here's my plan for reopening, here's how I'm going to keep things safe and then be able to reopen.
Jonathan:
Hmm.
Tawfik Goma:
That's my expectation. It's not really clear how that's going to work. Mmm. Are you going to have an application process for business or are they going to seek comment and then put out guidelines for business sector and what happens if you fall in between two different ones? That's all still kind of remains to be. I see.
Jonathan:
That's all right. That's not a small entertaining either. Pick any vertical or industry, even just, you know, restaurants, you know, Westchester County, let's go hyper-local. I mean, if you're going business by business and not, not by business type as an example, I mean just the paperwork and the process alone there could could take a long time.
Tawfik Goma:
That's interesting. I think there's going to be, there's going to have to be some, you know, aggregation and grouping of businesses. But you know, I think what's important for everybody here is to monitor what's happening locally, right? Because these are the decisions that are going to impact your business directly. And so to the extent that you can have a voice in that conversation, right? Provide feedback, you know, give concrete examples of how it's going to impact your business or the businesses that are like your business, right? Because they might group you with, with a type a different type of business that you're not in. So if you think about, you know, a gym, right? Maybe you're, you're a single personal fitness instructor, right? And you only have groups of three or four. Well, like, I don't see that. I wouldn't even see Jim's on here.
Tawfik Goma:
Right. And so if they just categorize everybody in personal fitness in one group, well do you want to be in the same category as like New York sports club? Mmm. With respect to the guidelines that you have to follow or do you want to be in, in something different? And so you really have to be proactive now, right? And, and leverage this community, right? Leverage your local community and say, look, we got to get together even with your competitors and say, we got to get together and figure out what the plan is going to be, what the benchmark is going to be for us to reopen and have a voice, you know, locally to basically set that standard.
Tawfik Goma:
This is just showing kind of like the metrics that they're looking for. And if you look at mid Hudson, you know, we're still missing the, the rate of new hospitalizations were, were too high. And so it's not clear when this is going to fall back and whether he's really going to stick to this. Right. they say that they're not going to start, you know, releasing the valve unless all these things are green. I'm not sure how practical that is and I'm not sure when, you know, that's going to happen. But that's the current state as of as of May 4th that he showed.
Tawfik Goma:
So again, yeah, just to go, you know, they're, they're looking at businesses to do certain things and they're just kinda, this is not a plan as much as it's a loose framework. They're saying, look, you're going to have to figure out what your, your, your people's situation is, what your place is situation is and what your process, the situation is. Right. But they don't actually tell you nobody has any plan yet for what that means to you and your business. And so what do we do with that? Is the question. So here's some high level things to think about. And again, this is going to be super specific to everybody's business, right? Spacing and configuration. Mmm. What are your, what's your policy for shared spaces and facilities, right? Your conference rooms, your shared kitchenettes, what are you going to do about those?
Tawfik Goma:
You know, how are you going to limit access? W what's your sanitation, sanitation going to be? Mmm. Dividers orientation of seats, right? If you're an office setting, you know, not having people facing each other directly, maybe you have them facing in other areas, right? Electronic payments prepayments, right? Not handling cash, not reducing the number of person to person transactions to the extent that you can. And I'm going to go through a lot of this and I would that, you know, it's, it's almost, you know, for, for the purpose of getting open, it's important to have a plan, right? None. No plan is going to be perfect. But recognize that you need something, have a plan to be able to submit it and say, look, these are the things that, these are the measures that we're taking to comply with safety so that we can get open. Don't, I would say don't stress and, and you know work towards a perfect plan that's gonna eliminate infection rate. I don't think that's practical. I don't think it's even possible. It's more about putting together a plan that says, look, we're taking measures, these are industry measures that are best practices for my type of business, and these are the things that we're doing so that we can keep people safe.
Tawfik Goma:
Other things to think about. Remote work, right? People are going to be working from home. You know, what's what cyber security measures you're putting in place. How are they accessing your network? Are they on a shared network? Can you give them a firewall to use or a VPN? That's, that's another thing to think about. PPE. this one. So at present, everybody who's in an essential business, right? That includes supermarkets and other restaurants even that are currently open. The business owners have to provide PPE by law. And so it's not clear what's going to happen when we transition to the less essential type businesses. Our business owners gonna still have to provide PPE to their employees. It's something to think about, right? Think about what your procurement plan is going to be because it's very difficult to procure PPE. And it's probably more likely and more practical for, for you to do it with, you know, a group of people and a group of businesses maybe through this network or maybe through, you know a network that, that you're affiliated with, of like businesses. So start thinking about that and kind of planning, go ahead. In case they say, so employers have to provide PBE to all their employees. Well, if you can't procure PPE then, and that's a gating issue to you opening, what, what's, what's the plan?
Tawfik Goma:
Mmm. Sanitation schedule, right? How often are you cleaning facilities? Mmm. Supplies, procurement. Mmm. So that would be like hand sanitizers and wipes and whatever else you're going to have situated throughout to, to maintain a kind of a clean work environment. Okay. A lot of businesses are doing staging rotation plans, right? So if you have 10 employees or if you have a hundred employees, you split them up in groups so that they're not interacting with each other and you have some of them report maybe on week one, you know, this is what the essential businesses have been doing, you know, in the energy space or you know, food processing. So you have some of them report maybe and you know, we won another group report. We too, and they don't interact right. If you can manage that, of course, depending on your business.
Tawfik Goma:
Mmm. A lot of businesses are also requiring antibody testing temperature and health checks. And you know, the employment commission said you can do health checks and you can do antibody testing. It's effectively like the same as providing and requiring a drug test, right. As long as it's offsite and you're maintaining, you know privacy you can require that. Now, just because you can require it, and we'll get to this in a little bit with privacy issues. You don't want to alienate your workforce and you don't want to alienate your partners for customers either. And so it has to be kind of an organic, well, let me hear your perspective. This is why I'm doing it. And communication is really key. So you have to explain to people why it is that you're doing or you're requiring antibody tests, right?
Tawfik Goma:
And they have them, you know, at, at the urgent care facilities. Now you make an appointment and you can go do one. It's questionable how, you know, valid those tests are, and whether they, you know, they can actually tell that you won't get reinfected. But it's something, again, it's one of those things, this is more about what's your plan and what boxes are you taking. And so it would be able to say, look, we did anybody testing. And ideally you have some, you know, 60, 70% of people who work in your space. I have the antibodies. Well, that would be great. Mmm. Yeah. That means that you have people that, you know, have possible immunity to this. So that's something to think about.
Jonathan:
So I think real quick. So we're coming up on about 20 minutes left in the hour. Actually, we're just a little fast, but I know there's a lot of stuff to get there. So I just wanted to pause here if anybody has any questions. Again, feel free to to unmute and you don't say them out loud or drop them in the chat. Again, there's a lot of content and this is a, this is a heavy topic. So feel free to pipe up speak out or type in the chat whenever you have a question.
Tawfik Goma:
All right, let's grab a question right away then.
Jonathan:
Alright, sounds good.
Tawfik Goma:
I actually did a zoom did a cocktail hour with a whole bunch of HR people last night about 14 different times. And the topic came up about you know, can we test, can we screen question that really comes up is what are your alternatives? If the person tests positive and it may not come and the re the results may be three days later. So what can you do?
Tawfik Goma:
You mean what are your, what's your plan for? Theoretically, you know, we ask our employees to go get, you know, go get a test. Just using a hypothetical like what WestMed maybe they're offering it, maybe they're not sort of a facility. We don't get the results, you know, for a couple of days. And privacy concerns may be that, you know, they go directly to the employee. Yup. How do we know whether or not they tested positive number one and number two, if they test positive, what can we do? Yeah. So that's good questions, right? Two things about that, right? One is you have the risk of, okay, you're sending somebody for a test or what's your plan for in between the test and you getting the results. That's one process that you need to deal with because let's say someone exhibiting symptoms or something and you say, go get the test. Well you should have a plan that says if someone is exhibiting symptoms, they stay at home until you get the results. Right. Pretty much that was the, that was the accepted, that was the accepted answer. Right. Across that, you know, you need to, you need to basically show us. And yes, I'm talking with my hands, but I didn't activate, you know, where the ops side. Alright, there we go. We'll go that way.
Tawfik Goma:
But show us the, you know, positive test result or the negative test result, right? Yeah, the right to ask that question. It from the guidance that I've seen so far and well, the government's kind of inclined right now to side on, you know and we'll get to this a little bit later about privacy measures, right? You can ask and you can require that your employees report that they're sick. You can require that of your employees. Now, how do you know that they're compliant? Right? What if they what if they just don't tell you? That's a different question. And that becomes more about what incentives have you put in place to you know allow them and make them feel like they can come forward, right? Because if you say, for example, if you test positive, then you stay home and you're, you're not, you don't get paid for that period of time. That's a different environment, right? Employees are going to be more reluctant to tell you about positive test cases. And so that's more about workplace interaction and kind of planning as how do you going to deal with your employees to be able to get those results from that. But you can dictate that. They have to tell you about, about the results.
Tawfik Goma:
Okay. Interesting.
Speaker 2:
It's a, it's a, it opens up let's face facts. It's on it's untested waters. I don't know what I mean. You're looking at, you know, anyone from, you know, the, you know, prescreening employees for diabetes because of my health and court, my health care costs are gonna go up because of the loss ratios right across the board. It's, I don't know what's going to go forward on this. And it is, it is interesting because you, you know, you can get an employee that says, I'm not taking the train from New York up to your office anymore. I'm going to work remotely,
Tawfik Goma:
Period. Right? Yeah. Or you could have employees, and this is what I mentioned here, a reasonable accommodation, right? You can have an employee with, with an underlying conditions. And how are you going to treat those people, right? You're going to have to accommodate people with underlying conditions. The same way that you treat, you know, maybe ADA people, right? People with disabilities because you can't obligate somebody to get on a subway that, you know, as an underlying condition. Can you and that's something that every employer is going to have to wrestle with. How am I treating, you know, my employees and how am I addressing things that they present to me, right? Where they say, look, I'm uncomfortable. Here are my health issues. How are you accommodating that? And so that's another layer of planning that kind of needs to come in for, for employees that you know, have underlying conditions.
Tawfik Goma:
So yeah, I, it's like you said, it's uncharted waters and I think there's a lot of intermixed issues. Privacy is a big one. But you know, I think the best advice is you have to have some organic kind of team oriented feedback mechanism where you have buy in from your employees and their, you know, they're comfortable with the plan. So, you know, rolling out a plan might mean here's a plan, it's subject to your comments and then we'll do the final one. After we collect everybody's comments. That way everybody at least feels that they have a voice. And, and maybe you, you take on board things that you didn't consider before. Hmm.
Jonathan:
All right. Just again, in the interest of time, I just want to keep things moving. We have about 10 minutes, so I know there's more content. Again, if maybe at this point if people have questions, drop them in the chat. We'll try and get through the content and then we'll see if we can come back around and knock out some questions winter as soon as we possibly can.
Tawfik Goma:
Yeah. So in the interest of time, I, you know, these slides I'm happy to share with everybody. Again, they're like just guideposts on, on things that you can and can't do. I do want to kind of jump through a couple of other things. So if you don't mind, John, I'm going to skip some of these, some of these slides. Sure. so I do want to talk about a little bit about privacy. It's, it's an issue. It's a hot issue and it's also kind of like near and dear to my practice. So it's something that I, I think that everybody should kind of be aware of. And the big thing I think with respect to customers or employees or whoever is be clear and be transparent and always seek opt-ins for information that you're going to gather. Right?
Tawfik Goma:
So don't alienate your employees, don't alienate your customers by mandating things about collecting data, information that they're not comfortable with. And another big thing that I think a lot of people don't fully conceptualized is legal privacy obligations are much different than perceived privacy rights. And so you talked to folks on the street, they feel like they have a certain level of privacy to their data and things and the use of their data and they're very surprised to hear about how their data is being used legally. Right. because of either opt-ins that they've signed into or maybe their data's been anonymized in a certain way, people are not comfortable with it because they have a perception of what privacy is. That's so that's different than what the legal obligations are for people who are collecting you know, personal information. And so you know, be aware of that.
Tawfik Goma:
Be mindful of that. Just because you can do it doesn't mean that you shouldn't be transparent about how you're doing it to your customers and employees. So that's something to you know, that I want a ham, I want it to hammer home guidance so far. You know, you could do a temperature check offsite antibody or equivalent test. You know, you could ask your employees to do that. You can ask them to report diagnosis, symptoms or exposure. That's the guidance so far. Again, that doesn't mean that you want to alienate your employees by just mandating this stuff, right? You need to have an open conversation with them to get by. Mmm. Things also to consider, you know, she's never disclosed personally identifiable information in alerting other employees, right. If an employee reports that they're sick, you don't have to report who was sick.
Tawfik Goma:
You don't, you shouldn't even report, you know, what shift they're working in or what time they were working in. You should probably just alert the people that might've been exposed to them without telling them who it was. And don't retain data beyond what's necessary, right? Don't hold lots of the data indefinitely. You going to want to probably anonymize it and keep it for storage in case you know, agencies or municipalities come and ask you for information. And I was going to talk a little bit about that. I'm going to skip this for now. You know, I was going to talk a little bit about some of the privacy measures and contract tracing measures that are out there, right? In the private sector, what other countries are doing. But I want to focus in, right on what new York's talking about, right?
Tawfik Goma:
New York's talking about having governor Cuomo is, you know, handed the reigns to former mayor Bloomberg and they're going to run with it and they're going to equip what they call an army of contact tracers. So from, from what I understand and what governor Cuomo has said, they're going to hire a 6,400 to 17,000 people to basically find out who's been sick and then trace and do interviews with those people and call them and say, Hey, you know, who were you in contact with and where were you? And things like that. Mmm. That's going to come back to your business, right? If you're open for business and people are getting sick and then it's contact traced, even, you know, indirectly, right? Because people who get sick, they probably have been to 10, 15 different places. And so the contact tracers, I presume, are going to be coming back to your business and then asking questions and how are you going to deal with that?
Tawfik Goma:
Right? so you need to have a plan, a response plan for how are you going to talk to these people? One and you know, actually more importantly, identify fraudsters. There's going to be a lot of people who are PR pretending to be contact tracers, right? Trying to solicit information from you and from your business. So be very careful about what type of information you share. Don't voluntarily give, give information unless you're, you know, basically required to, right? So you shouldn't be disclosing information about your employees or results or things like that on a voluntary basis. And I suspect that all these contact racers are going to work on this kind of consent basis where they're going to ask you questions and you should start thinking about what do I, are you, are you mandating that I respond to this or you asking me to volunteer this information, right?
Tawfik Goma:
Balance that with being cooperative so that they don't shuts you down, right? Effectively. And so you need to have some kind of plan that you're going to report some information to them about, these are the things that I'm doing. Maybe here's a log of the last 14 and 21 days of visitors that I've had, right? If you're going to keep that kind of log and you're going to send that kind of information, then then be sure that your customers know that you're doing that. But as far as, you know, people getting sick, things like that, you really need to be about what kind of information you're going to share when you're getting these these calls. Or maybe these letters, I don't actually know what the process is going to be, but it's something that you should, you should be planning for and how it kind of response strategy to
Jonathan:
So tough. We have a couple of questions here and again, I know time it, it seems like we're not going to get through all of this stuff, although we're, we're kind of coming towards the end here. But just two quick questions for you. I mean, these both seem seem pretty relevant to a circumstance. So in terms of employers and what they should be mindful of, if they're recipients of either of the, the IDL or the, or the PPP loans if they're recipients that they have those funds is there any, any correlation or link between those funds and maybe the way that they're used or what they're applied towards that would that would line up with this? So, if that's, you know, are they, are they spending some of that money maybe on 'em I don't know if testing, testing equipment and heat heat sensor thermometers, any of that stuff. Is there any correlation that you've seen between the, the funds coming through from that and kind of progression or a plan?
Tawfik Goma:
That's a good question. And it's being, you know, that's actually a really hot topic right now about how restrictive the PVP is for forgiveness. Well I'll talk about PBP for forgiveness, right? You can forgive the PVP if you use 75% of it towards payroll costs, the other 25% is really limited to what you can use it for. And it has to be things like utilities and rent payments that for obligations that existed before this happened. Right? So the PPP as it was kind of set out, didn't contemplate for you taking on new expenses to deal with. You know this, from what I understand so far now from what I also understand is that this is a hot topic and they're talking about it right now about, okay, if we do have a phase four program, we need to address, right, what these restrictions are on forgiveness.
Tawfik Goma:
And so I expect, although you never know with Congress, I expect that they're going to revisit this question and say, look, maybe we can make it a little bit more permissive. Now going forward here, you're, you know, here's more guidance and the SBA has been putting out guidance like weekly and the rules change all the time. So as of today, I would say, I don't, I'm not aware of of being able to use that for forgiveness. That's not to say that it's not going to change next week and I actually kind of expect it to change in the next three or four weeks.
Jonathan:
Yeah, I'm sure that makes sense. So here, here's another one, and this one's, this one's interesting. So if you have a, if you have children and some of us in here do I know that so let's say daycare is closed, you know, during this for for obvious reasons. You're a full employee, maybe you're a single parent and you can't bring your kid to daycare. So that's one example. The other one though, kind of extrapolating from that is let's say that day that daycare does open, but the employee of that company, the single parent still doesn't really feel comfortable. They're kind of like, okay, this this was maybe a premature opening of this, of the Staker. I just, I don't feel comfortable bringing my child to this daycare. Is there anything that you've seen from employers or from a legal perspective that might protect that individual in that case? Or is that kind of falling into that gray area a little bit too much
Tawfik Goma:
You're talking about? So I'm not comfortable bringing my, my child to daycare and so therefore I can't report to work.
Jonathan:
Exactly. Yeah. If, if they find or if they try to find some sort of course of action where it's reduced hours or I don't know, more vacation days. Any, anything like that. Is there any legal ground for them to, to kind of stand on and in that kind of a case?
Tawfik Goma:
Not that I'm aware of. Right. it's, it's a really tough, that's a really tough situation. I thought to say that, you know I think employers are at least large, you know, companies are, are trying to accommodate those issues. But I don't, I don't know of a way that you can you know use that. There's nothing that I know of, you know that's been congressionally passed it to kind of protect people first thing home where their kids again, it's not to say that's not something that they, they aren't going to revisit, you know, there, there are a lot of gap issues that haven't been visited. You know, one of the big things is, is health insurance coverage. Right. For example, people that have been let go and, and you know, they, they put out PPP loans and, and stimulus packages, but what about healthcare? And so they're addressing this kind of seriously, right. As they deal with it cause they had no plan. And so, you know, every new bill comes with maybe new protections and so that might be something that comes down the pike, but there's nothing that I know of now.
Jonathan:
Got it. Got it, got it. Okay, great. And so it is it is three o'clock now. It's three Oh one, but so I think if you have another 10 or 15 minutes, if that's possible for you and your schedule, it'd be great to at least just finish, finish up with the slides and then if there are any other questions at that point, we can put a hard stop on, let's say it like a quarter after, if that's okay for you. I know you've got got things to do, but to get that work.
Tawfik Goma:
No, that's fine. I, I think, you know, I just wanted to point out some resources as well. So these are just some lengths to you know, resources that I think are useful for people to keep an eye on, right? There's New York state guidelines on reopening that. They're updating that presumably on a regular basis. Westchester County right now, there's not a lot on there, but I expect that, you know, as things move towards reopening, that's the place they're going to be posting things. There's the OSHA guidelines on preparing worklet workplace. That's a really good resource, right? And if you're trying to figure out what the industry practice is and say, look, I'm complying with, you know, industry norms these are the places that you should look too, right? You should say, look, this is what the OSHA guidelines say and this is what I'm doing.
Tawfik Goma:
It's part of my plan. There's also this American industry, industrial hygiene association, they have this website back to work safely, that org. They basically have these guides for industry sector on recommendations. So if it's construction, general office space, workout facilities, restaurants, so they have different guides that are, you know, tailored to the type of industry. It's a good resource. Again, it's one of those things, look for these resources. And actually look outside, outside of the state, look at other States, look at how other businesses have been conducting themselves that are similar to your business in other States, what guidelines they put in. Look at other countries, right? Look at places like Germany or Sweden has been opened this entire time for the most part. You know, what did they put in place, if anything that you can borrow from and, and try and implement that and apply it.
Tawfik Goma:
And I know it's a lot, but these are, you know, hopefully things that I've pulled some of that industry best practices for you. So that you have, you know, places that you can go to and say, okay, this is something that, you know, I could start with and blueprint my client off of the Bloomberg site. You know, I imagine if they're going to be posting some things about their contact tracing on there. I also posted to McKinsey economic impact guide. The reason I post that, it's a really interesting document. But it's, it's also interesting because you know, governor Cuomos has said that they've hired McKinsey to do consulting work for them. Right. and you see a lot of the like benchmarks on how to reopen this document is like a guide to leaders. It's saying like, these are the things that you should do to reopen your economies and here are the other impacts. You know, it's a, it's a, it's a kind of in depth document, but you can see where they're basically getting their information from. And so if you're trying to predict how, you know, government's going to act it's, that's a really difficult thing to do, but maybe you can look at who they're getting advice from and what that advice looks looks like. And McKinsey is, is advising New York state. So that's a place that you want to take a look at.
Tawfik Goma:
Yeah. I'll leave it there and I'll just take questions. I think, you know, I, I know I just droned on and, and talked super fast for an hour. And I probably you know, should just leave the rest of the time for questions all hang out in 10 minutes or so and just take questions or other people's experiences.
Jonathan:
Yeah, no, for sure. And that's, yeah, I think that content was, was important. It definitely wasn't a droning on. And also I actually have a question lined up right now. So so obviously with the New York pause, the, the executive order to to keep nonessential businesses closed. I guess this is this is both general and very specific to, to lease, but in terms of the effect that that might have on the rent that a business owes to a to a landlord. So if that lease, let's say, has a force in your closet. It does. Yes. So if it's in there how does that affect the rent? And I know we went through the that slide pretty quickly to get to kind of the the business.
Speaker 4:
However, the landlord still says that they says that the late is that the rent cannot be differ.
Tawfik Goma:
Why
Speaker 4:
A big thing that the business as, as the suspend operations do too near a boss.
Tawfik Goma:
Right? Hey, I think as I, yeah, as I mentioned earlier, I, it's, it's really gonna come down to what that clause says. And so, you know, I can't really say, and I know that's like a lawyer's answer, but you can't, you can't say what it is that, that, that your remedies are with actually looking at the clause, right. And saying, okay, and actually looking specifically at that, okay, what is, what is, you know, those, the acts of God does what language, you know, what's the trigger language? What's the mitigation? You know, what are the things in that, in that clause and how does it apply to your obligations, right. To pay rent. And so that's, it's something that needs to be looked at, you know, and, and hopefully, I know I rushed through it, but you know, the guidance of like, look at your claws and look at the elements in that clause, right. Is, is the language go to trigger this, right? Is it say, you know, does it cover kind of pandemics or economic shutdown?
Speaker 5:
Any obligation which is delayed or not performed it to go, it's done say pandemic, but it's governmental walls, regulations, restrictions, governmental action.
Tawfik Goma:
Yeah. So again, I, because I have to fall back to my disclaimer, I can't really advise you specifically on your, on your contract. And again, I know that's a lawyer's answer. But you know, the way to approach it is does the trigger hit what are the mitigate, you know, w what are the remedies that it allows once this clause is triggered you know, what are the mitigating elements and you know, what other contractual remedies that you, you have under that clause. So that requires an analysis of the clause. And I don't think this is the, unfortunately the kind of forum or type of question that I can answer without getting myself in a lot of trouble.
Jonathan:
<Speaker 4> quick question is, you said that the building itself is open, but the business isn't able to conduct
Speaker 4:
Operations. Are there,
Jonathan:
Are there other businesses in the building that are in the same boat as you, that maybe you could talk to?
Speaker 4:
That's a good question. I mean, there's a, there's a, there's legal legal services from there. I haven't talked to anybody. They're there. It's a, generally, it's a medical building. Most of the medical practices, there's a, there's an architecture practice. I don't know if that, that's probably a fact that one is probably affected.
Speaker 4:
Yeah. Yeah.
Jonathan:
I think that, I mean, if, if I were in a building with other, with other businesses that were going through the same thing, I think my first stop would be to just, just talk to people, you know, talk to people around you that are in the same boat. And in that case they'd have the same landlord. So you'd be, you know, you'd really be kind of singing the same tune for sure. I'm definitely not a lawyer, so that would just be my first stop. But but yeah, that's, it's a really good question. I mean, the rents in a paws act and essential versus not essential is, is a big thing and it's affecting just about every non essential business and essential business. So that's a great question.
Speaker 7:
Talk to me. What about for public businesses? So you talked about a little bit of some guidelines for businesses trying to screen employees coming back in with like temperature tests and those kinds of things. But if you're a public space or you know, you're a restaurant and you serve the public, do you have any of those same kind of rights to do any form of screening before you have public guests entering into a public space? Or is it just an assumed risk when people enter any kind of public space
Tawfik Goma:
You're talking about for your customers or patrons?
Speaker 7:
Correct. Yeah. So let's say it's a restaurant or something like that. Do you, do you have any reasonable, and then I guess, how does that affect your, the, the burden of like reasonable things that you can do? Because if, you know, it's different if you have, you know
Jonathan:
More open flow of people in and out of your business versus I know I have 20 employees and I can keep a closer eye on them. How does that affect your strategy on, you know, opening?
Tawfik Goma:
Yeah, no, that's, I mean, that's a really hot question. You don't have the same rights over patrons, right, that you do over your employees. So everything you, you look at it more, you know, Ricky probably familiar with like data privacy issues. It's almost the same thing. Where, you know, someone's going on your website and doing something on your site what rights do you have today? It's really based on consent and opt-ins, right? And so if you're going to be a restaurant owner, you, you know, I think currently, you know, then the question becomes, you certainly don't have rights to like once they're in your facility to say, Oh, you know, now that you've walked in, I'm going to test you. You have to submit yourself to this test. You almost have to do it at the door. Right? And you're going to have to say, you know, you consent to this, you agree that being part of this space is going to, you know, these are our, these are our measures, right?
Tawfik Goma:
And this is our plan and you're going to have to get an opt in type of consent. The question becomes, can you like, deny service, right? Can you say, yeah, well, if you don't submit yourself to a temperature temperature, check that door, I'm not going to let you in. And I think every inclination so far at least is, yeah, you could, you could say no, this is what we do. You actually look at, you know, people requiring DPE equipment or masks, right? At restaurants and fast food chains, right? They're requiring that of their customers or airlines saying, look, if you're going to board our plane, you're going to have to wear a mask, right? It's a similar type of concept. You're basically, you're not obligating them to do it. It's a consent based system, right? You can use my service, but you have to do this. And you can deny service based on that restriction. Where that line is drawn ultimately is not clear. Right? So there are some really farfetched ideas out there about like literally doing rapid tests at the door for coven or antibodies before letting people in. Now I don't know where that line is going to be because it's going to have be kind of a statutory thing that dictates that.
Jonathan:
Yeah. Interesting stuff. And then we've got one more and then I think we're gonna try and cap it here, but this one, this one's actually interesting. So I think we've, we've all seen places that have put up you know, plexiglass partitions and things like that. So from a and I guess this would be a question for you, but in terms of, Oh, like, Hmm. Fire safety. Okay, that's interesting. So installing these dividers as an example, the example that's brought up here is I'm the school director and one of the problems is they can't actually install dividers on each desk because it's considered a fire hazard. Now, I don't know if that'd be a legal question or if that would come down to a, to some sort of city or zoning department or something like that. But I don't know if you could shed any light on something at that level or not.
Tawfik Goma:
Hi. So I don't I don't have an answer to that. I, I, I can kind of see how that would be an issue, certainly. Right. yeah, that's going to be, you know, what's the fire code, right? What's the local fire code and and how is the local fire code adjusted relative to this, right? Because there's probably going to be conflicting requirements, you know, whether it's schools or other spaces about, you know, all right, you're gonna put partitions in, but like what's your egress route? And yeah, that's, I don't have an answer to that. That's, it's gotta be something that's going to have to get hashed out.
Jonathan:
Yeah. For sure. All right, well, thanks toughie for sticking around for an extra 15 minutes here. We covered a lot of ground, a lot of great information. Everyone, great questions. And we will send her an email in the next couple of days with these links. They all sounded extremely helpful as well as the slide deck. And yeah, thanks for coming. Toughie. Thanks again a bunch for all the information. It's extremely useful to, to us. And I'm sure everybody else that's on this call right now, I'm not sure.
Tawfik Goma:
Yes. My pleasure. Thanks. Thanks for hosting guys.
Jonathan:
Yup. Everyone take care. Stay safe. Stay healthy.