To our valued clients:
We live in extraordinary times that are rapidly evolving. We also live in litigious times, and therefore, the attorneys at GrayLaw Group, Inc. remain available to help you navigate challenging disruptions that may arise. We are monitoring the changing situation carefully and will update you on relevant developments as needed. Below are general answers to frequently asked questions we received this week, which you may find useful. As situations are fact-specific, please call Michael Adler at 310-540-2000×274, or email him at firstname.lastname@example.org.
Los Angeles Superior Court Update
On March 17, 2020, the Los Angeles Superior Court (“LASC”) issued an order closing all court locations for three days to all non-emergency matters. The Court reopened most of its courthouses today, but only for essential and emergency functions. The LASC is suspending civil, criminal, traffic, and unlawful detainer trials through April 16, 2020. We will keep you updated if there are any changes to the timelines in your existing matter.
Unlawful Detainers (Evictions)
The LASC order deems the period from March 17, 2020, to April 16, 2020, a “holiday” for purposes of computing the five-day timeframe within which a defendant must respond to a complaint in an unlawful detainer action. Any unlawful detainer complaints served during that time are “on hold” until April 16, 2020.
On March 18, 2020, the Department of Housing and Urban Development suspended foreclosures and evictions through the end of April 2020.
In the City of Los Angeles, Mayor Garcetti ordered a moratorium on residential and commercial evictions through March 31, 2020.
Contracts often contain force majeure clauses that relieve parties of their obligations if unforeseen circumstances prevent a party from fulfilling a contract. Force majeure events include natural disasters, epidemics, and government acts, which interrupt business. Even if the clause is not expressly included, state law may provide companies experiencing COVID-19 disruptions with a defense from fulfilling its obligations, including “impossibility,” “impracticability,” or “frustration of purpose.” Whether such arguments to contract performance are viable depends heavily on terms of the contract and the specific facts.
Business Interruption Insurance
Insurance policies may provide business interruption or other coverage for a portion of your losses. Coverage depends on the nature of the loss, the types of causes covered, and the exclusions and exceptions set forth in the policies. Some policies expressly address virus-related losses, whether they are included or excluded, but absent express terms, coverage is often unclear. For example, some business interruption insurance is triggered only if your business premises suffer physical damage. Other policies provide broader coverage where business or supply chains are disrupted by circumstances outside your control. We are available to review your specific policy’s language to determine whether your particular situation is covered.
Assistance and Benefits for Employees and Employers
As the pandemic continues to evolve, and government and health officials implement ever-expanding restrictions, businesses must make difficult decisions, including staff removals, reductions, and business shutdowns. Employers may elect to furlough their employees and allow them to access paid leave benefits such as vacation, paid sick leave, or personal days to bridge the gap. Here are a few items to consider to mitigate the consequences on your business and employees:
- Employees diagnosed with, or suspected of having, COVID-19 – If an employee contracts COVID-19, the general advice is to send home, not only that employee, but anyone who worked closely with that employee within the past 14-days, to ensure the infection does not spread. When sending the employees home, do not identify the infected employee by name to avoid violation of confidentiality laws. Consider hiring a cleaning company to deep clean the affected workspaces, and inform building management about your remedial actions.
- Layoff and Furloughs – Some employers have already furloughed or laid-off workers. Those who can afford to, and wish to encourage employee loyalty, are choosing the furlough option, which is essentially a mandatory unpaid leave of absence. During the furlough, the employer continues to make payments for existing health insurance benefits so that its employees are not faced with both unemployment and the need to make COBRA payments to keep their health insurance. Many of these employers are allowing their employees to use vacation time and PTO while they are not being paid. Other employers are reducing hours and/or structuring rolling schedules to assist with social distancing. Those with adequate resources are continuing payment of at least a partial wage. Legal advice and clear employee messaging are essential to minimize the risk of wage and hour violations. Each situation is different.
- Sick Leave – California law requires a minimum of 24 hours (or 3 days) of paid sick leave per year for employees. Paid sick leave can be used for absences due to illness, the diagnosis, care, or treatment of an existing health condition or preventative care for the employee or the employee’s family member. Preventative care may include self-quarantine as a result of potential exposure to COVID-19. California’s Department of Industrial Relations published a coronavirus specific FAQ that relates to questions, including the use of sick time, reporting requirements, and other wage and hour issues stemming from this crisis. Visit dir.ca.gov/dlse/2019-Novel-Coronavirus.htm, or call our office for more information.
- State Insurance Benefits for Workers and Paid Family Leave – California Employment Development Department (“EDD”) offers Disability Insurance benefits for sick employees and up to six weeks of paid family leave (“PFL”) for employees unable to work because they are, for instance, caring for an ill or quarantined family member. Also, depending on eligibility, the EDD provides Unemployment Insurance benefits for employees that are subject to quarantine, furlough, reduction of hours, or job loss due to impacts of the coronavirus, and have waived the standard one-week waiting period.The EDD has provided the following useful link with COVID-19 specific information concerning EDD benefits for employees: edd.ca.gov/about_edd/coronavirus-2019/faqs.htm
- Small Business Loans and Payroll Assistance: Programs to help small businesses are evolving quickly in this crisis. The Los Angeles County Economic Development Program and the Small Business Administration both have websites with information, laedc.org/coronavirus/ and sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources. According to the websites, SBA disaster loans are now being processed.
Our number one priority is the health and well-being of our staff and clients. By staying informed and calmly proactive, we will get through this together.
Michael E. Adler
The information in this blog is for general informational purposes only. It does not create an attorney-client relationship, nor does it constitute legal advice on any subject matter. Legal questions related to the COVID-19 crisis, in particular, are unique and complicated, and no reader should act or refrain from acting based on any information included in this e-mail without seeking appropriate legal or professional advice as it relates to you and your business.
GrayLaw Group, Inc. is a transactional and litigation boutique firm that combines expertise and experience with personalized service. We periodically send out updates on legal developments that may be of interest to our clients.
GrayLaw Group, Inc.
21515 Hawthorne Blvd. Suite 450
Torrance, CA 90503
Tel: (310) 540-2000×274 / Fax: (818) 912-6504