The COVID-19 pandemic is continuing to present significant challenges in our daily lives, and not surprisingly, will impact important issues in business and corporate law in 2021. From economic impacts on the global supply chain to the hobbling of certain business sectors (airlines, travel and leisure, restaurants, and other entertainment industries), the pandemic has turned “business as usual” on its head. The following is a guide of hot topics in business and corporate law in the coming year. If you need legal assistance in your business or the workplace, the expert team of attorneys at Dunlap Bennett & Ludwig is ready to advocate for you.
Labor and Employment
Federal, state, and local laws and agency regulations continue to be enacted and promulgated in response to the COVID-19 pandemic. From mandatory shutdowns to directives on mask-wearing and social distancing protocols, it is more important than ever for employers to keep their “finger on the pulse” of compliance with applicable laws and regulations.
Employee safety is a paramount consideration for employers. The Occupational Safety and Health Administration (OSHA) requires employers to protect employees from workplace hazards that can cause injury or illness.
If an employer cannot protect employees from COVID-19 infection (via remote work, for example), then employers must provide personal protective equipment (PPE) to employees and ensure its use. Despite the use of PPE, the pandemic is likely to cause an increase in occupational illness workers’ compensation claims.
As the COVID-19 vaccines continue to be more widely distributed, employers seek additional guidance on the lawfulness of mandating vaccination, obtaining proof of vaccination, and dealing with employees who may object to vaccination. The Equal Employment Opportunity Commission (EEOC) recently offered guidance on these issues, but litigation is anticipated for employers taking adverse employment action due if an employee refuses the vaccine.
While it is obvious that a global pandemic is a novel situation, there are other events in recent history resulting in an influx of litigation activity, namely the 2008 recession, particularly in the areas of contract and bankruptcy.
With global market volatility in the wake of the COVID-19 pandemic, it is reasonable to anticipate an influx in civil litigation based on contractual disputes, insurance coverage, and employment issues at a minimum. If you need assistance in the litigation process, hiring an experienced attorney you trust can be beneficial in guiding you on the journey ahead.
General Impact on Court Systems
Federal and state court systems have initiated various protocols to protect litigants, attorneys, judges, and courthouse workers in the wake of the pandemic.
Courthouse mask-wearing requirements, social distancing, courthouse closures, installation of plexiglass and hand sanitizer stations at filing desks and in courtrooms are all ways the everyday in-person experience of a courthouse has changed. The use of videoconferencing apps for court hearings has been a broadly sweeping change implemented to keep court dockets from stagnating.
The pandemic is causing obstacles to the performance of contractual obligations for businesses around the world, ranging from non-payment to supply chain interruption. An increase in litigation of contractual disputes is anticipated if a party seeks to delay or avoid performance. The nature of the contractual obligation, timeframe of performance, and factual circumstances will be important in the analysis of what, if any, legal principles may apply to allow a delay of performance or excuse from performance, namely: force majeure, impossibility, and frustration of purpose.
Insurance Coverage Disputes
While some businesses had business interruption or event cancellation insurance at the outset of the pandemic, many insurers specifically exclude pandemics in policies, but coverage litigation is foreseen, nonetheless.
Insurance companies groan under the pressure of catastrophic events not anticipated in their risk analysis, as the entire industry would cease to exist if payouts eclipse premiums collected from insureds. The COVID-19 pandemic, in addition to increasing their exposure under business interruption or event cancellation claims, also experienced weakened revenue either through non-payment of premiums or as a function of the obliteration of premium growth potential. Accordingly, litigation of terms of policies to ascertain insurance coverage is expected.
An increase in insurance bad faith breach of contract litigation is also expected to increase between businesses and their insurers when claims under these policies are denied.
Businesses remaining open during the pandemic may face an increased possibility of general liability and workers’ compensation claims due to COVID-19 infection.
The medical records and facts surrounding the alleged infection will be necessary to analyze if there is a causal link between the presence at the business/place of employment and infection, in addition to determining whether there are damages in negligence claims.
The pandemic has greatly impacted the important issues in corporate and business law and will likely have a far-reaching effect on litigation and business practices for years to come.
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