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Coronavirus prompts difficult legal questions
Law firms form task forces to deal with employment, acquisitions and other areas of concern.
Michigan joined a slew of states last week to have confirmed cases of COVID-19, commonly known as coronavirus.
As a result, employers and employees have more questions than answers, which has prompted attorneys to continually provide legal advice to their clients and confront them with what could be the harsh reality of the impact the virus can have.
Miller Canfield and Varnum LLP have individually created task forces both to address the concerns of their clients and stay in constant communication with practice group leaders at different office locations about COVID-19, which was recently classified as a pandemic by the World Health Organization.
Although Miller Canfield has had cross-disciplinary industry teams before, Leigh Schultz, principal for Miller Canfield, said the firm has never created a task force. However, the group was formed because of the influx of client calls about the steps they need to take in an event there is an outbreak in Michigan.
The law firm’s task force consists of 20 team members who cover an array of legal matters such as cross-border mergers and acquisitions, employment, immigration, real estate, and hospitality and supply chain disruptions, among other issues.
Schultz said employers are thinking about time-off policies, travel restrictions, health and safety concerns.
“Most of my clients right now are just asking if they should be issuing some sort of mass communication to employees about the coronavirus? Is it premature or is it time? If so, what should they talk about?” she said. “Primarily, we have been counseling clients that if they have a workforce that travels, they should be taking steps with employees who travel to decide if they are going to restrict travel or cease all travel right now. If they have any large planned events, where employees come together, they can choose to cancel that for now. They also need to be disinfecting their workstations frequently.
“We are also advising clients to make sure there isn’t any discrimination or harassment going on in their work environment. Not necessarily from even the employers, but from co-workers. Theoretically, there are folks out there who would assume that someone of a specific national origin or heritage, perhaps they are Chinese, they assume they have the coronavirus or have a higher exposure to the coronavirus, which obviously being Chinese American has nothing to do with that. So, just to make sure that there is no discrimination or treatment of people differently.”
Although Scott Hill, executive partner and corporate attorney at Varnum, also said they have created cross-disciplinary teams in the past to address some issues, most recently during the recession that occurred a little over a decade ago, they have never created a task force that addressed the issue of a possible outbreak of a pandemic virus in the state.
Varnum’s task force consists of seven attorneys who specialize in immigration, finance, labor and employment, litigation and corporate matters. From an economic standpoint, Hill said an outbreak would have a great impact on the economy, especially in the manufacturing industry where there is a limited inventory of parts on hand and owners are dependent on workers in other countries that are affected by the virus.
Hill also said business transactions could be affected if an outbreak were to occur. He said although there isn’t a situation, yet, where the transaction flow from companies is slowing down, he foresees a scenario where if there is an outbreak, business transactions would be negatively affected.
“From a merger and acquisition side of things, where people would like to buy and sell companies, I can see a situation where more questions are asked by buyers,” he said. “So, if I am looking to buy a business, I would be more interested in the inventory and the supply network that that seller has. I would be interested now where their parts come from, whether there has been any disruption in their supply chain, because I wouldn’t want to buy something that would immediately subject me to major risks.”
Pay and medical leave challenges will be front and center for employers if their employees contract the virus.
Dr. Christina Fahlsing, infectious disease specialist with Spectrum Health Medical Group, said the illness can be very mild and may not produce any symptoms for those who are young and healthy, but in the elderly or for those with other health conditions it can cause severe pneumonia and respiratory failure.
“The most important thing for businesses is to find ways to make their employees feel safe about staying home when they have symptoms, instead of spreading their illness around,” she said. “If (employers) can have their employees work from home, then that is the best thing you can do for your employees, to keep them out of the office. If you can, then you need to enforce strict policies on people who come to work with any kind of symptoms. You, as their employer, or co-workers; everyone is safer by staying home. It is tough because we all know that if we call in sick to work it just increases someone else’s work and it jeopardizes our positions. Employers have to provide reassurance to people that they will not be penalized for staying home. You have to find ways to compensate them for working from home or find a way they can do their jobs in an out-of-the-box way.”
But not all employees can work from home and not all employees can get paid if they stay home because they are sick. According to Allison Sleight, co-founder and attorney at Thacker Sleight, recently hired employees at some businesses have to work for six months before they can get paid time off like five days of paid leave, so she is encouraging employers to develop a plan now before it becomes an emergency.
There are some employees who can benefit from the Family and Medical Leave Act, if they are severely ill from the coronavirus. The leave requires employers with 50 or more employees to provide up to 12 weeks of unpaid leave with job security. Some employees in Michigan can benefit from the Michigan Paid Medical Leave Act that was enacted last March. The law requires some employers to provide paid medical leave.
However, John Lichtenberg, an attorney at Rhoades McKee, said he is concerned about employees who have to be quarantined and how it affects their Michigan Paid Medical Leave and their PTO.
“The concern that is unique to the paid medical leave is the number of employers who have integrated the paid medical leave under the Michigan statute in ordinary PTO policies,” he said. “So, an employer might be inclined to say, ‘We need you to self-quarantine for the next 14 days and we are going to pay you, but we are going to charge your PTO account, we are not going to give you the discretion for that.’ If they do that, then part of the PTO is paid medical leave (and) then the employer has arguably deprived the employee a statutory, Michigan paid medical leave, when the employee didn’t need it. So, they force the employee to use their paid medical leave for a purpose that it wasn’t intended to be used for. The employee should be given the option, in my judgment, to say, ‘No, I don’t want to use my paid medical leave because there might be a time when I am really going to need it.’”
While there is an opportunity for some employees to telecommute and get paid by their employers during what could be a COVID-19 outbreak in the state, other employees, like manufacturing workers, may not be so fortunate. If there is an outbreak, they may be laid off by their employer.
Cat Brainerd, attorney at Rhoades McKee, said those individuals may be qualified for unemployment benefits even if they are called back to work by the same employer months after being laid off, but she also said there is little protection for employees with children.
“If we start seeing schools close, similar to some places in Seattle, and you have minor children coming home, in theory, you are going to see daycares and other child-care options closing as well,” she said. “So, you will have workers who aren’t ill with children who aren’t ill but have child-care obligations. You may have employers staying open but employees with no child-care options, and there is little protection for them because at that point it is not a medical issue for either themselves or their children, which means they are not willing, ready and able to work under that circumstance and likely would not qualify for unemployment benefits because they haven’t been laid off because their employer stayed open.”