Jacob Ogles
Concerts have been canceled, movie theaters are closing, universities have shifted to online and bars won’t serve alcohol anymore. It’s anything but business as usual in Florida.
But while the state self-isolates, what does that mean for companies’ legal exposure? Attorneys at Greenberg Traurig released a brief this month that aims to clarify contract obligations and consequences of quarantines.
“Right now, the entire business community is trying to figure allocation of risk,” said Jaret Davis, co-managing shareholder for Greenberg Traurig’s Miami office.
The short of the brief is that exposure regarding business commitments varies greatly based on the circumstances. In Florida right now, those circumstances seem to grow by the day or hour.
Gov. Ron DeSantis ordered a host of business restrictions on bars and restaurants Tuesday, and some localities like Orlando and St. Petersburg have put other local restrictions in effect. Meanwhile, cruise lines and other travel companies have canceled a number of excursions as limits on mass gatherings and international travel unroll.
Employers have certain obligations to employees, but Davis noted employment law is “highly fact-specific.” Employers can take “reasonable actions” with workers but the definition of those words can vary.
As for factors in interpretation? “Almost 100% of it is concerned with how concerned an employer is with the welfare of the employees then with economic risk,” Davis said.
The legal brief from the firm discusses “force majeure” contract clauses, provisions which excuse a party’s performance of its obligations under a contract when certain circumstances outside of their control arise.
Such a clause can cover activities that become “inadvisable, commercially impracticable, illegal, or impossible.”
In a period of travel restrictions, quarantines and curfews, that specific language can be applied to a variety of cancellations, supply chain interruptions and scheduling obligations.
“These clauses are fairly common in contracts, yet in times like this, can prove to be a valuable resource in determining how to navigate performance when there are issues affecting performance that are outside the parties’ control,” the brief reads.
“However not all clauses are alike, and in the aftermath of the terrorist attacks of Sept. 11, 2001, as well as recent storm and flood damage caused by Superstorm Sandy, the details of force majeure clauses have taken on increasing importance when negotiating contracts.”
Davis said how specific wording appears in contracts will greatly impact the legal exposure companies may face as plans change amid the coronavirus threat.
“Keep in mind, there is something to be said for working with the insurance industry,” Davis said.
He said the current circumstances show the value of services like “interruption insurance,” which can help businesses who suddenly see a revenue supply cut off, be it customers at your bar, bands cancelling appearance at a concert, or a government ordering a type of activity to cease.
