The last time you negotiated a construction contract, how much time did you spend on the “Force Majeure” clause? Do your contracts even have such a clause?
The global impacts of the Coronavirus / COVID-19 (“the coronavirus”) outbreak might now put these contract provisions at the center of attention.
Generally, a Force Majeure event is an extraordinary circumstance beyond the control of the contracting parties, which could include a war, strike, riot or “act of God” (hurricane, flood, earthquake, etc.).
It is well known that the supply chain of foreign products and building components has already been impacted by the coronavirus. The Chinese government has implemented lock downs, quarantines, and other measures to contain the disease. As a result, the Chinese government, through the China Council for the Promotion of Internal Trade, has issued thousands of Force Majeure “certificates” to businesses, legally excusing them from contract performance within China. But these government-issued certificates apply only to transactions within Chinese borders.
We do not have such government protections domestically. Instead, contractors or material suppliers who are impacted by Force Majeure events must look to their contracts to assess whether an excusable Force Majeure event includes the inability to furnish materials or equipment due to foreign government restrictions or global health conditions.
If the Force Majeure clause does not provide protection against the inability to provide specified equipment or materials, then the contractor or supplier must rely on the legal doctrine of “impossibility” of performance. However, this excuse cannot be used if alternate materials or equipment are obtainable elsewhere, albeit at a higher cost.
Contractors and material suppliers must also review their insurance policies to assess whether they provide business interruption coverage for this unique event that is impacting our global economy.
How Do You Handle Workplace Concerns Over The Potential Spread Of Coronavirus?
As an employer, what can you and what should you do to address employee concerns over the spread of the Coronavirus also known as COVID-19 and other emergency situations such as earthquakes and other disasters? There are several steps employers can take now to inform their employees and protect their business.
- Develop or Update your disaster/ emergency contingency plan. The plan should discuss emergency contact with all employees, what steps are vital to the continued operation of the business, is the business prepared for an emergency on business premises, and how will business records and other necessities be preserved/protected?
- Employers should be careful not to seek private employee information in violation of California and federal law. For example, the EEOC created an ADA compliant form for employees to complete in anticipation of a pandemic risk. In addition, it published a preparedness piece for employers.
- Employers with 25 or more employees must permit employees to take up to 40 hours of time off to address school emergencies due to a natural disaster (i.e. fire, earthquake, flood) when their child cannot remain in school. (Labor Code section 230.8.)
- Employers may want to initiate communication with employees now as a method of protection and prevention. We recommend something as follows:
- The news is full of stories about a fast-spreading Coronavirus Disease 2019 (COVID-19). Scientists around the globe are racing to learn more about the virus. The Centers for Disease Control (CDC) believes the immediate risk to the American public is low right now, but they’re asking everyone to help reduce the risk of infections spreading.
Protect yourself and your family:
- Check the CDC website (see link below) for up-to-date information, especially if traveling.
- The CDC is issuing new travel guidance regularly as developments occur.
- Visit the CDC Travel Page (see link below) for all travel-related updates.
- Get a flu shot to prevent the flu. While the coronavirus is different from the flu virus, the flu is still a serious illness.
- Practice good health habits.
- Wash hands often with soap and water for at least 20 seconds. Use an alcohol- based hand sanitizer when washing isn’t an option.
- Avoid touching your eyes, nose and mouth.
- Avoid close contact with people who are sick.
- Stay home when you’re sick. That includes staying home from work, school, errands and travel.
- Cover a cough or sneeze with a tissue, then throw the tissue in the trash.
- If you don’t have a tissue, cough or sneeze into your upper sleeve or elbow, not your hands.
- Clean and disinfect frequently touched objects and surfaces, such as phones, keyboards, doorknobs.
- Get plenty of sleep, be physically active, drink lots of fluids and eat nutritious food.
Please access the following link on Flu prevention in the workplace:
Please direct questions to JoLynn M. Scharrer, head of Hunt Ortmann’s Employment Law Group. D
By Dale A. Ortmann, Hunt Ortmann, Attorneys at Law Email: [email protected]