The global health crisis related to the outbreak of the Coronavirus (COVID-19), and the resulting economic downturn and uncertainty are creating unprecedented business, financial and legal challenges. The COVID-19 public health emergency, and the rapidly evolving response to it, have affected all aspects of life and commerce that law touches. The seismic impact of this development requires not only information and analysis but defensive, remedial and re-development action for the present, and planning for the future.
To help address the needs of our clients and friends affected by the outbreak of COVID-19, Baker Botts has put together a Resource Center, drawing from the experience of our global, cross-practice and multi-disciplinary group of attorneys and practitioners.
Below, we provide an overview of certain issues we expect to see, or have seen, as a result of COVID-19 and include links to resources on those issues. We continue to monitor the evolving COVID-19 pandemic and economic distress response, and the impacts on your organization.
Companies – regardless of location – are faced with the daunting task of making critical decisions rapidly with imperfect information. We have distilled advice from our Crisis Response Team that may be useful as companies engage in response planning, including a detailed resource guide on COVID-19 considerations.
COVID-19 raises a host of potential cybersecurity and data privacy concerns. These include:
- Potential increased cybersecurity risk as a result of more employees working remotely
- COVID-19 based “phishing” scams in which malicious actors send emails or other electronic messages purporting to be government, health care, or charitable organizations
- Potential privacy concerns related to an employer’s solicitation or collection of employees’ personal health and/or travel information, as well as general contact tracing.
Click here for more insight on COVID-19 specific cybersecurity and data privacy concerns. Further, to the extent companies do collect personal health information (PHI) of employees, we provide general guidance on PHI collection here.
Potential Impact on Corporate Governance, Shareholder Relations, and SEC Disclosures for Public Companies
For its part, the U.S. Securities and Exchange Commission has recognized that COVID-19 raises “potential compliance issues” for companies with SEC reporting obligations. To help alleviate such issues, on March 4, 2020, the SEC announced that, subject to certain conditions, companies impacted by COVID-19 would have an additional 45 days to file certain disclosure reports and schedules that would otherwise have been due between March 1 and April 30, 2020 (more detail on the SEC announcement provided here).
From the aspect of corporate governance, boards and managers must assess prospective changes in employment, operations, products, services and funding, and whether or not to continue in particular directions, which new directions to follow, and what resources to tap for financial support. General legal principles that guide management decision-making inform both the nature and quality of decisions, as well as impact defenses against unwarranted attacks. Our Corporate Teams have deep understanding of these principles and their application in broad areas.
Finance, Tax & Federal Funding Programs
The U.S. and other governments have initiated direct funding support to the private sector as well action within established markets and aid to specific governmental bodies, all of a nature and scale not seen before. In such an unexplored environment, questions of definition, implementation, compliance, and management come in to the front. Working with these programs requires an application of seemingly unrelated legal and regulatory principles, and navigating rules that were not written to contemplate such an environment, or recently written in haste. Our broad based teams of lawyers deal in these areas of uncertainty and provide guidance in these areas in general and in COVID-19 funding in particular. More guidance is provided here.
Commercial Disputes in Times of Economic Distress
We have already seen claims that the COVID-19 outbreak and related events prevented parties from performing their obligations under a contract, and we expect to see more such claims over the coming months. Our Team has significant experience in interpreting, addressing, and, when necessary, litigating issues surrounding “force majeure” clauses and related doctrines following natural disasters, supply chain disruptions, and other extraordinary events.
Human Resources and Benefits Issues
As COVID-19 became a pandemic, employers have learned to navigate a complex web of issues to protect their workforces as employees develop symptoms of the virus, travel restrictions imposed or arise, and schools conduct classes remotely.
In the United States, federal law requires employers “to provide their employees with working conditions that are free of known dangers.” The Occupational Health and Safety Administration has published guidance for employers on how to address this obligation in connection with COVID-19, emphasizing that “[e]xisting OSHA standards apply to protecting workers from” COVID-19.
We have created an overview of the HR and employee benefits issues that employers are navigating in the current environment, which is changing daily. The considerations we have outlined are intended to provide a framework for employers to take into account in managing issues from day to day without losing sight of their long-term goals.
Click here for additional insight on Employer Considerations for Managing Through COVID-19.
IP entities throughout the world have responded to the COVID-19 pandemic by closing physical locations, suspending in-person meetings, and in some cases extending deadlines. We provide the following report outlines COVID-19 related measures taken by certain courts, IP offices, and other government agencies in the United States and around that world that regularly impact our clients. We also provide information on signature requirements in various jurisdictions and IP offices, including whether and how electronic signatures may be used. We will continue to update this report as the situation develops. Click here for the latest details.
Antitrust enforcers in the U.S. and throughout Europe have reacted differently to the ongoing COVID crisis. Some have announced a largely “business as usual” approach to enforcement, while others are introducing policy changes to incentivize competitor collaborations that seek to provide helpful in the fight against COVID-19, including faster review of mergers and other joint ventures. These developments raise questions related to cross-border transactional activity, “excessive” pricing, distribution and allocation, State aid issues, and other policy or “go-to-market” strategy approaches. Our Team has significant experience across all disciplines of antitrust law, related to merger control, government enforcement measures, private litigation and class action surrounding price-fixing and collusive activity, and general compliance and competition-related risk assessments.
Tax relief is one of the tools that the U.S. government will be utilizing to help address the effects of COVID-19. In addition to advising you on new tax laws and administrative announcements, our Tax Team will also help you navigate existing tax law to minimize your tax burden in these tumultuous times. Guidance on COVID-19 related tax issues may be found here.
With increasing travel restrictions, potential quarantines, and government-encouraged social distancing, the coronavirus increases the risk companies may be without key leaders for extended period. Our partners have repeatedly advised clients on leadership succession and similar issues.
Our team will continue to monitor the COVID-19 outbreak and update this site regularly. While we all hope that COVID-19 is quickly contained, our cross-disciplinary team stands ready to help you anticipate and address this global crisis.
Please reach out to your regular Baker Botts contact or a member of the COVID-19 Crisis Response Team for specific information.