What Are My Legal Obligations Here?

COVID-19 has created shifting legal terrain for local businesses.

Frank Aloia, a partner with Aloia Roland in downtown Fort Myers, says he’s become “the voice inside their head” for many of his long-term clients. That means it’s no surprise when these clients reach out to him late at night with worries and concerns in this uncertain economic climate. Lately, he’s been fielding many of the same types of calls, often from his clients in the trades—plumbers, electricians, roofers. They say, “Hey, Frank, I’ve got a guy on my team who says he’s not feeling well. What are my legal obligations here?”

For many businesses, the legal terrain is shifting. The pandemic has changed the way companies approach corporate legalities such as employment policies, rental agreements and vendor contracts, and attorneys like Aloia are helping guide these new trends.

In addition to questions about how a business should proceed when an employee has contracted COVID-19, Aloia is also fielding calls about commercial leases. More and more, he’s seeing businesses ask for “workout agreements” such as rent-deferral agreements, forbearance agreements and lease extensions. These renegotiated contracts have mainly come from the sectors of the economy that have been hardest hit by the shelter-in-place order—hospitality and retail. The updated agreements put unpaid rent on the backside of the lease and help spread the last few unprofitable months over the entire year.

Like Aloia, Chris Pope, a partner with Pavese Law Firm, is also seeing shifts in employment policies and vendor and rental agreements. Many companies, he says, are open to providing teleworking clauses in employment contracts, although issues remain to be worked out, largely around information security and hourly wages. “For a lot of these businesses, it’s ‘wait and see’ as to whether it will be beneficial,” Pope says. “But in the meantime, they’re having to craft policies to address those concerns.”

When it comes to existing rental and vendor contracts, Pope’s clients are renegotiating where possible— although it may be more difficult for some than others. Going forward, though, he says that most companies are including pandemic clauses to address the allocation of risk, including who bears responsibility if materials aren’t delivered on time and whether there will be any kind of rent relief in a lease agreement. “We’re living in a COVID -19 world, so it’s foreseeable,” he says. “Across the board, everything is being considered and renegotiated where it can.”