Second In-House Counsel Roundtable Discussion on COVID-19

Last Thursday morning, the In-House Advisor convened a second video conference of General Counsel and Corporate Counsel to discuss how their businesses are dealing with the COVID-19 crisis. As with the prior meeting, the in-house counsel present were from entities ranging from small, local companies, to large, multi-national enterprises. Here are some of the key takeaways from last week’s session:

Work from Home

  • Don’t assume that because people are working at home everyone is available all the time
    • People with small children have to take care of them; people with school-age children have to homeschool them.
    • People with roommates may not be able to talk/video conference all the time
  • Don’t assume that people who had been working at home part time can adapt any quicker and better than others. They were used to a different pace and working part time, so keep that in mind when you reach out to them.
  • Everyone agreed that you have to put up boundaries from work so that you don’t burn out, but no one had a great way to do this as a practical matter.
  • Video conferences are much more effective than telephone calls. People are more engaged and more get accomplished. In some respects video conferences are even more efficient than in-person meetings, as people tend to be much more focused and not get sidetracked as much.
  • One company has twice per week virtual lunches to keep people connected.
  • Another company’s executive team meets daily and then reports back to the company.
  • Communicating with your remote workforce remains a key factor
    • Some companies are doing it daily, others are doing it weekly
    • Some are including customer/client feedback in their communications
    • Some have implemented questionnaires of their work force. If you do this, it is important to publish results and make sure people see you are valuing/implementing the feedback.

For most companies, the number one issue is stopping the outflow of cash….

  • Delay your payments!
  • Determine which debts/accounts can be delayed without the entity/individual coming after you legally. While you want to avoid a lawsuit, generally, you really want to avoid a lawsuit from someone who has the ability to cripple your business by injunctive relief, foreclosing, etc.
  • You may be able to put off 401K payments for 6 months. Look into this.
  • You may be able to stop matching 401K payments at some point during the year. Look into this.
  • Delay/eliminate traditional merit pay increases.
  • Consider putting people on 50% schedule and cutting their pay by 50% as an alternative to laying off half your employees.
  • Consider telling people they have to use their vacation. This is especially important for those people “working from home” who really can’t do much work. It also is important because when things get back to normal, you want everyone to be cranking and do not want a lot of people then taking their vacations.
    • Be sure that you are not running afoul of the new FFCRA laws, however. If an employee needs COVID-related sick time or emergency FMLA, you cannot force them to draw down their PTO banks first before availing themselves of emergency sick leave or FMLA. Of course, at their option, they can choose to use PTO first (which some may do, if it is a better pay out than the federal relief).

Miscellaneous Observations and Advice

  • When you are giving legal advice, don’t just date stamp it, time stamp it. The landscape and new laws are changing so quickly that you want to be able to illustrate that your advice was correct at the time it was given. Likewise, be sure to tell your internal clients that your advice may be different a day or an hour from now, so they should come back to you if they won’t be relying on your advice right away.
  • Don’t be the first or the last to act. The Philadelphia 76’s received terrible backlash when they were the first sports franchise to take harsh action with respect to their employees and then had to reverse course. If you are last to act (see, Boston Bruins), you also can get very negative publicity.
  • You have to find a way to create redundancies in your work force beyond just your key executives. For instance, if you only have one person that processes payroll, and s/he gets sick, what are you going to do?
  • Companies are not giving out severances for terminating people in light of the COVID-19 crisis, and companies are not particularly worried about being sued.
  • With all the new laws in place, companies seem to be making reasonable guesses and not overanalyzing or becoming paralyzed if they don’t know if what they are doing is permissible. In this environment it seems much more reasonable to do what you have to do and then be prepared to ask for forgiveness, as opposed to asking for permission and waiting to act.
  • However you set up your Crisis Management Team, you want to be sure that all business units are represented.

Silver Linings

  • Forcing people to step up and do things they haven’t done before has shown that people have more capabilities than we thought.
  • Having all of these video conferences has, literally, given us a window into the homes of some of our employees and helped us understand them better and forged stronger relationships.
  • Companies have learned the value in being nimble and learning how to pivot their business model both internally and externally.

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