What should you do to best protect your business from litigation arising out of the Covid-19 crisis?

What should you do to best protect your business from litigation arising out of the Covid-19 crisis?

• Stay up to date.  The federal government is passing a significant number of new laws in response to the crisis, especially related to employment.  Additionally, governors, administrative agencies, and courts are issuing orders changing how a business or individual can act, in light of public health concerns related to Covid-19. Some of these changes are intended to create new opportunities for businesses to keep operating without risking public health, but others create potential liability for businesses and individuals that don’t comply with the new laws and orders.

• Document as much as possible.  You may not remember in a year why you did something, even though it seemed very important at the time.  Also keeping contemporaneous records helps protect your business against losing knowledge about an event because an employee leaves and helps protect against claims that someone in your organization is misremembering or lying about what happened.  Most litigation does not take place until months or years after the event at issue and people rarely realize that something could turn into litigation at the time it is happening. Keeping clear, consistent, and detailed records can often either prevent litigation or allow it to be resolved more quickly and for less cost than if records are minimal.

• Don’t over-promise.  Whether dealing with customers, vendors, contractual partners, or employees the natural tendency is to try to make the other party happy or to emphasize the strengths and benefits of your product, service, or business.  But when this natural salesmanship goes too far it often leads to litigation. When a party feels like they have been “lied” to, even if that was not your intention, they are less likely to be reasonable in finding a solution.  Set reasonable expectations for both your business and those you deal with, especially in light of the known and likely future impacts of Covid-19.

• Communicate clearly and document those communications.  Businesses are often asked by their customers, vendors, contractual partners, or employees for things they have no obligation to provide, either because it is not called for under the contract or the law does not require it.  This is especially true during an unusual or significant event like the Covid-19 crisis. In the interest of maintaining good relationships, many businesses will try to accommodate the request. Likewise, when ending or changing a relationship with vendors, contractual partners, or employee the instinct often is to soften the blow by being vague.  While it is not necessary to be rude, communication should be clear and not leave room for the other side to come up with their own interpretation of what you meant. If you are going to try to do something, but may not be able to, you should be clear about that. Likewise, if you have a contract, make sure you are clear about if what is being discussed is or is not intended to modify the contract.  If you do intend to modify the contract, make sure you review the contract and any amendment is done in accordance with its terms.  

By: Brett Callahan, Esq.

Do you have more Coronavirus related legal questions? Visit our Covid-19 business resource page HERE or call us at 703-369-4738. We are open and ready to assist new and existing clients.