Skip To Content

May 28, 2020 – 9:51 AM

Businesses will face complex and continually changing issues as they begin to reopen. The attorneys of Reger Rizzo & Darnall engage with clients daily to work through these issues and have identified areas that will require careful consideration to achieve a successful return to work.

Make Your Workplace Safe

You must provide a safe workplace, not only because of the legal responsibilities but also as a practical response to employee expectations and morale. You will need to consider how to manage traffic patterns in your facility; set protocols for meeting with customers and vendors; structure shifts and breaks; require the use of personal protective equipment; and maybe even alter the physical layout of your space. 

You may be required to obtain information to service customers as well. Will you take temperatures at the door? Should each customer sign a waiver before being serviced? What about your foreign employees with visas – have they traveled recently? As you develop a plan to address these issues, you will need to comply with OSHA, the ADA, HIPPA, and CDC Guidelines, as well as local laws, regarding occupancy and social distancing measures.

Sick, Scared and Burdened – Employees That Will Not Return

As businesses begin to reopen, some employees will inevitably refuse to return to work. Your response plan should be considered ahead of time so that you can make appropriate, timely decisions. Employees might refuse to return because they have no access to childcare; live with an elderly or sick family member; suffer from an illness; or simply because they are scared and think teleworking is effective. You should have a plan with a comprehensive response to guide your compliance with obligations under laws that might not have applied to your business before COVID-19, including the FFCRA, FMLA, the ADA, and state and local laws that might require you to accommodate certain requests or permit paid leave or teleworking. Failures to return to work might also affect your PPP loan.

Will My PPP Loan Be Forgiven? Can I Take Any Tax Credits?

You received a PPP loan and have or will start bringing employees back to work, but you are already through some or most of your eight weeks to spend and qualify for forgiveness. You have seen from us that the terms of the loan keep changing – so what should you do? Can you pay them more? Can you advance commissions on sales and have that forgiven? If you pay some money back to the government, can you take any tax credits? What about rent that was due before you received the loan? Proper spending, and documentation of that spending, are needed to qualify for forgiveness and maximize your benefits.

What About My Franchise Agreement, Hotel Management Agreement, and Other Contract Matters?

Like many franchises with a closed or partially closed business due to COVID-19, you wonder if your rights have changed. Are you in jeopardy of suffering a termination after this crisis has passed? Are you relieved of certain obligations, such as Management Agreement performance standards, or can you terminate an agreement entirely for the other party’s failure to meet performance standards? Hotel owners might need extensions on PIP deadlines, while franchisees might not achieve the necessary quality scores and might need a reduction in franchise fees. Can Franchisors leverage the situation to obtain amendments to franchise agreements and change the way the system operates? 

Others will do nothing and will fail to adapt the situation to a new normal – and then what? Can you make changes yourself, or do you need to wait? The situation is critical, and your locality has requirements that do not apply to any of the other franchises in the system. What do you do? How does Force Majeure and/or Business Interruption Insurance work?