WASHINGTON, DC — The Coalition of Bar Associations of Color (CBAC) issued the following statement in response to several proposals calling for alternatives to the traditional in-person bar examination used to license new attorneys as a direct response to the ongoing challenges presented by the COVID-19 pandemic:
The COVID-19 pandemic has presented extraordinary challenges to just about every aspect of how we conduct our lives. As lawyers, it is our duty to meet these extraordinary circumstances with grace and swiftness, and to adapt as necessary to ensure continued access to justice and protection of the rule of law. In this spirit, the Coalition of Bar Associations of Color supports ABA Resolution 10G strongly urging all state bars to cancel in-person or potentially vulnerable online administrations of the bar exam and consider adopting alternative methods of licensing new attorneys until a safe and secure method of administering a bar exam is available. This will protect the future of the legal profession and ultimately, our society.
Protection of the public in the administration of justice should remain the top priority of state bars. However, during the ongoing pandemic, traditional methods of testing, like large in-person exams, pose tremendous health risks to test takers and those around them and in many instances would violate government-issued restrictions to large gatherings.
Although we commend the states that opted to cancel in-person examinations in favor of online proctored exams, this method has met significant challenges in its administration. These challenges have included fairness, privacy, and technology concerns with the most recent example being the Florida bar. In Florida, bar examinees were informed of the cancellation of the online exam two days before its scheduled date due to numerous issues with the online proctoring system. No official new date or method of testing has been offered. The Michigan online bar exam system crashed during the examination. The State of Indiana encountered similar technology issues when the program was being tested, and they changed to an open book exam allowing answers to be emailed. The current infrastructure for online testing, which presents significant security concerns and glitches, is simply not workable for an exam of this magnitude and import.
As leaders of the Bar Associations of Color we are particularly concerned with the disparate impact that COVID-19 has had on communities of color and more specifically bar examinees of color. As noted in the report accompanying ABA Resolution 10G on this issue, a recent survey showed “a majority of bar applicants do not believe they have reliable internet access, and that white applicants are about 71 percent more likely to have such access when compared to black applicants.” The same survey noted that the majority of bar examinees “do not have access to a quiet space to take a remote bar examination, with white applicants again being substantially more likely to have access to a quiet place than an applicant of color.” People of color and non-traditional students, who have already faced and conquered institutional challenges to complete their legal education, will face additional barriers in the event of additional delays.
Further delays in licensing attorneys are unfair, placing the careers of thousands of attorneys in limbo. Instead, flexibility from state bars is of paramount importance. Adopting alternatives like open book examinations, extended CLE, a diploma privilege, or a Certified Legal Intern program that leads to a provisional license and then to full licensing within 3-6 months, is the most efficient way to adequately safeguard the futures of all bar examinees and the legal profession as a whole.
Additionally, the delays in testing have further exacerbated the stressful circumstances experienced by bar examinees. Graduates have been preparing since May for one of the most important examinations of their careers. To do so, they have sacrificed their income and time for an extended period. Many are facing severe financial difficulties, have no health insurance, and they are competing for jobs in one of toughest job markets in years. Further delays in licensing will disrupt employment plans and leave thousands of graduates with no way of supporting themselves or their families in a moment of global crisis.
Bar examinees have demonstrated their ardent commitment to the legal profession through their resiliency in the last months. The protection of the public in the administration of justice should be extended to bar examinees by decisive action from the state bars that they will serve in their long and successful careers. We call on state bars to consider the options set forth in ABA Resolution 10G that are most protective of bar examinees, their careers, their families, and the legal profession. Options include but are not limited to allowing diploma privileges, administration of remote open book examinations, and creation or expansion of certified legal intern programs leading directly to licensure, a form of diploma privilege.
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The Coalition of Bar Associations of Color (CBAC) was established in 1992 and is comprised of the Hispanic National Bar Association (HNBA), the National Asian Pacific American Bar Association (NAPABA), the National Bar Association (NBA), and the National Native American Bar Association (NNABA).
AABANY recognizes and thanks its Student Leaders for all their assistance this summer in fighting COVID-19 and giving back to the Asian American community in New York. Our AABANY student leaders are:
Taiyee Chien, UChicago Law
Long Dang, Columbia Law
Alex Hwang, Cardozo Law
Dianna Lam, Fordham Law
Connie J. Lee, Columbia Law
H. Anthony Park, Ottawa Law
Jenny Park, Columbia Law
Xinyi Shen, Cardozo Law
Sejal Waghray, Emory University
Meng Zhang, Fordham Law
The flyer above contains short descriptions about why each AABANY Student Leader wants to give back and how they have been doing it, such as by volunteering at AABANY’s Pro Bono Clinic or participating in various COVID-19 relief activities and programs over the summer.
Please join us in thanking all our AABANY Student Leaders. We also recognize and thank Will Lee, Vice Chair of the Student Outreach Committee, for his leadership in bringing together our Student Leaders and helping AABANY channel their talents and energy to benefit the New York Asian American community.
On July 23, AABANY’s Real Estate Committee presented a CLE Program on real estate closings in the COVID-19 era. The panel focused on how the real estate market is adapting to COVID-19 through new rules and practices and detailed the current state of property transactions. Speakers included Jason Wang, Licensed Real Estate Salesperson at COMPASS, Wendy Yu, Counsel at Yu Law, and Jane Chen, Associate at Forchelli Deegan Terrana LLP. The program was moderated by Margaret Ling, co-chair of the committee and Senior Counsel at Big Apple Abstract Corporation.
Margaret Ling began the panel with an update on the current New York state real estate legal landscape. This included the 202 executive order mandate by Governor Andrew Cuomo, declaring a state of emergency to permit only essential businesses. As a result, most real estate showings are now virtual and transactions are digital. Open houses are permitted only if social distancing measures are maintained.
Jason Wang spoke on his experience as a real estate salesperson at the inception of the pandemic and shared market observations. Because of at-home quarantine, buyers have begun to realize what they want in a home property and so there is a continued demand for property. Additionally, residents who fled New York City during the pandemic on-set may return in the near future and strengthen the real estate market.
Wendy Yu then outlined client protection concerns during virtual transactions. This includes taking into account that many buyers are now making offers without ever seeing property in person, emphasizing the need to place buyer protection clauses in contracts. Other considerations involve death clauses, in case that one party is no longer capable of continuing the transaction, as well as maintaining a flexible approach, so that either seller or buyer may be granted extra transaction time in case of pandemic-related challenges.
Jane concluded the panel by providing insight into co-op property transactions. Specifically, co-op boards that typically meet on a regular basis are now meeting less frequently, making it difficult for potential buyers to be interviewed for acceptance. Furthermore, because co-op boards are responsible for serving the interests of all building residents, it is important for interested buyers to keep in mind the visitor restrictions that exist in these communities.
Thank you to speakers Jason Wang, Wendy Yu, and Jane Chen for their time and insight, and Margaret Ling for moderating. Those interested in learning more about AABANY’s Real Estate Committee can do so here.
Jane Jeong shares her reflections on the effects of COVID-19 on our day-to-day lives.
I had a really, really good feeling about 2020. On New Year’s Eve 2019, after billing my final hours of the year (I had gotten roped into a Christmas-Grinch corporate merger that finally signed that morning), my boyfriend and I wrapped up the old decade grabbing a cozy dinner with friends in Chelsea, dancing until seven AM at a rave in Brooklyn, refueling at a 24-hour Subway on the way home, and then sleeping the day away like two blissful college freshmen without a care in the world. We woke up only to grab dinner in the West Village, where the quiet streets marked a sobering contrast to all the festivities the night before.
During that dinner, like the two optimistic overachievers we are, we shared several New Year’s resolutions we each had on deck for 2020. My personal list was ambitious: I wanted to find a new job, exercise more regularly, publish my writing, meditate every night, and send my parents on a cruise to celebrate their recent retirement. I hoped to hike Machu Picchu and go to Burning Man for the first time. I already had five weddings, two conferences, two law school recruiting trips, four weekend getaways, and one bachelorette party penciled in my calendar ahead. I had a really, really good feeling about this year, I told him—it was a fresh start of a new decade, and it brimmed with nothing but hope and exciting possibility.
… Well, I guess there is always next year.
There is no way we could have predicted how stunningly our day-to-day lives were about to change just weeks after that dinner. Even among the most fortunate or optimistic of us, there is no denying the emotional toll it has taken to face the stupendous degree and speed by which we parted with our pre-COVID lives. We have all been grieving some kind of loss lately:A loved one, a daily routine, a sense of normalcy or security or freedom, a job, a friendship or relationship, a sense of human connection, vacation plans, wedding deposits, graduation celebrations, our physical health, our mental health… and everything else in between.
My own COVID grief feels like a full-time job sometimes. In my thirty-one years, I have never been more keenly aware of the fragility of life—of just how little control and security we ever had to begin with (despite all the stories we tell to assure ourselves otherwise). There are the big, soul-shattering losses I mourn—like the thousands of lives we have lost and the countless families who are forever changed. I mourn for those of us who suffered alone in quarantined hospital beds during their final hours. I mourn for all the carefree memories and quality time we otherwise would have shared with those we love this year.
And then, of course, there are the smaller losses I miss—the little everyday freedoms I had once taken for granted—like those dinner parties filled with laughter and dates at cute West Village restaurants and sweaty Brooklyn raves and everything else that had all been so ordinary to me just seven months ago. I miss hugging people wherever I go. I miss wearing real pants. I miss old New York—the one brimming with pedestrians, 24-hour subways, rooftop parties, workout classes, bars, restaurants, yoga studios, coffeeshops, comedy shows… and every weird thing we could possibly imagine and then some. I miss the endless plans we used to make, things we used to do, strangers we used to meet.
Depending on the hour or day, I process our losses with varying degrees of grace.Sometimes, I relish the new normal: I appreciate the pockets of time we have gotten back in our days—all those dead minutes we used to pass idling in traffic or blow-drying our hair in the mornings—that now allow me to squeeze in some extra sleep and exercise and Netflix binges. I am grateful for the unexpected opportunity to work side-by-side with my new COVID officemate (and boyfriend, co-chef, roommate, breakfast-lunch-dinner-buddy, haircutter, lover, workout partner, quarantine buddy… all in no particular order). I appreciate how much easier it is now to eat healthier (since we cook most of our meals these days), to save money (it turns out doing nothing is pretty cheap!), and to find pleasure in the utterly mundane things (like rearranging our Tupperware cabinet).
Many days, though, I can’t help but feel like I am trapped in some kind of torturous Westworld loop, in which time is rendered meaningless and every day seems like an exact replica of the one before. July feels exactly like May and May felt exactly like March. I can’t help but dwell on all that we lost—both big and not big—that made the day-to-day once seem more exciting and brimming with promise. I often feel bored, isolated, trapped, lonely, frustrated, and desperate for normalcy again. I feel like I am stuck living at work instead of working from home. I genuinely can’t help but wonder if my youth is passing me by—with my days and weeks and months all bleeding together—all the while as I am stuck at home with nowhere to go.
But maybe… that is exactly the point. Perhaps there was nowhere to go in the first place.
This thought struck me on yet another nondescript Saturday night however many weeks ago (again, who’s counting anymore?), when I was curling up with my journal and realizing just how eerily still my life had become. Maybe this was a natural result of sheltering in place for the better part of this year. Or maybe all those attempts to meditate are actually working. Still, this new quiet is particularly weird for me, because “still” has never been the soundtrack to my life. My pre-COVID self was constantly on the move—always working, always going, always doing. My calendar was jam-packed with brunches and work and workouts and coffee dates and birthday celebrations and dinner parties (sometimes all of the above, all in one day). Even at work, I had my own workstation set up in my best friend’s office so I could avoid sitting alone in mine all day. For any pockets of downtime I had to sit with myself, I filled the quiet with FaceTimes, group chats, podcasts, yoga videos, books, errands, TED Talks—anything to avoid my own solitude. I was rarely, if ever, still.
A part of this is rather natural; I am an extreme extrovert and social butterfly by nature. But I would be lying if I didn’t now wonder whether there had been something more to this. Because for most of my teens and twenties, I never felt quite at home in my own skin. My mind was simply not the kindest place for me to live—and how could it be, when I was the only one in this world who knew all of my flaws and insecurities and mistakes? I was so exacting in all the ways I thought I fell short—all the ways I had wished I were someone “better” than the person I actually was. So was there a part of me that was constantly on the go—over-scheduled, over-stimulated—because I was unknowingly trying to avoid my own self (and all the criticism and anxiety that came with her)? Was I truly seeking joy, or was I unconsciously avoiding pain? And, if the latter, how many disappointments and heartbreaks and mistakes could I have then avoided, had I learned to embrace my own company much earlier in my life? How many Saturday nights in my past did I unknowingly choose to distract myself—with mindless activities and the wrong people—simply because the alternative of sitting alone was too uncomfortable to bear?
I do not suspect I will fully resolve these questions anytime soon; the truth is likely complex and layered somewhere in between. However, at the very least, I am beginning to see that there may be a different, perhaps more productive, way for me to start reframing this never-ending Westworld-loop of 2020. It might not make sense, and it might be scary and isolating and lonely as hell at times, but I am being pulled to my core in ways I never could have expected. I am not sure why it took more than three decades and a global pandemic for me to learn how to nest within for the first time, but regardless of how I got here, I can try to embrace it now—boredom, anxiety, and isolation and all—and see where this path leads me.Because when will I ever again get the gift to spend this much time to be still? After more than three decades of spending my time, money, energy, mind and body on external distractions, it is about time I look within. It is about time I learn there was never anywhere else to go in the first place.
In this way, I suspect my post-COVID life will look very different from the one I had just a few months ago. With some time and distance away from what was once normal, I find myself re-evaluating everything and stripping my life down to the very basics. I am learning I do just fine without all that makeup or pedicures or professional-grade haircuts or six-dollar lattes. I am outgrowing certain friendships and deepening others. I am exploring new recipes (like the perfect avocado toast) and hobbies (like acrylic painting) and DIY haircut tricks (my boyfriend is a good guinea pig). I am slowly mastering the art of doing nothing (and not feeling guilty about it). I am reading more and talking less. I am learning to trust in the disarray, even when I do not understand it.
I am growing and toughening up as we speak—and, if I may presume, I am not the only one. There are little, gentle reminders all around us of our boundless resilience throughout this weird and lonely time. There is my friend Meg, whose marriage crumbled in the early stages of quarantine and is now learning to live alone for the first time in thirteen years—all the while juggling a full-time job and a two-year-old daughter. And then there is Erin, who—after rebounding from a scary bout of COVID and is now seeking to reinvent her second chance at life—decided once and for all to trade in her fancy lawyer job and fancier Brooklyn apartment for the rustic charms of New Hampshire. There is also Dan, who lost both his job and girlfriend in March and—after nursing a badly bruised heart for the last couple of months—is now embracing this opportunity to finally launch that consulting business he had dreamed about since college. In this way, all our grief and fears notwithstanding, there have been unexpected opportunities this year for many of us to dive deep within ourselves and shed what was not meant to be—a relationship going nowhere, a toxic friendship, an unfulfilling job—and write the next chapter for ourselves ahead. We are learning to Marie-Kondo our lives from old attachments—to things, friendships, relationships, habits, jobs, cities, apartments, hopes and dreams—that no longer serve us.
I may no longer boast about that really, really good feeling I had about this year… but, at the end of the day, I still choose hope. And this is not to say that the storms won’t continue to rage on—we are in week who-knows-what of COVID, and there is no telling how much further we have left to go or even how much worse this may get. Our losses may continue to compound for a painfully long time. However, if I may try to find any silver lining here, perhaps it is this: Despite all the pain and senseless loss,we are still surviving. We are still evolving. Wherever we are, whoever we are, we are pulling ourselves through something we do not understand—and maybe that is precisely the test here. What we do with this opportunity, then, depends entirely on us.
Jane Jeong is an attorney at Cooley, writer, yogi, dog-lover, and former Wall Street analyst and fitness instructor. She is a graduate of Yale College and Harvard Law School. She lives in Manhattan.
Founded in 1965, the Chinese-American Planning Council (CPC) is the largest Asian American social service organization in the nation. With the aim to promote the social and economic empowerment of Chinese American, immigrant, and low-income communities of New York City, the CPC responds to critical needs of community members during COVID-19. In line with its mission, CPC is providing critical up-to-date information and resources in various languages. CPC now shares news of an emergency Rental Relief Program (RRP) introduced by New York State to provide one-time rental assistance to New Yorkers burdened by rent during the COVID-19 crisis.
Someone may qualify for the COVID-19 Rental Relief Program if the four specifications below are met:
You are a renter living in NY State.
You have lost income between April 1, 2020 and July 30, 2020.
You paid more than 30% of your household income for rent before March 1st.
Your household income (including unemployment benefits) is below 80% of HUD’s area medium income.
Please note, the deadline to apply for the program is Thursday, July 30, at 6 PM ET. For further program overview and eligibility information, please see here.
Below is an information flyer in simplified Chinese answering frequently asked questions about New York State’s COVID-19 Rent Relief Program. Applications are also available in Traditional Chinese, Korean, Bengali, Spanish, Russian, and Haitian-Creole.
On July 10, AABANY co-sponsored a CLE Program on anti-Asian racism and discrimination in the workplace in the COVID-19 era. The panel focused on how COVID-19 is causing an increase in anti-Asian sentiment and detailed the current state of workplace discrimination laws. Speakers included Helen Park, Counsel at Cozen O’Connor, and William Li, Principal and Founder of William K. Li Law PLLC. The program was moderated by Yoojin DeNiro, Co-Chair of the AABANY Labor & Employment Law Committee.
The panel began with historical background on anti-Asian discrimination in the United States, with a focus on the recurring villainization of minority groups. Significant examples include the Chinese Exclusion Act of 1882, the internment of Japanese during World War II, and the murder of Vincent Chin (mistaken for Japanese) by white auto-workers.
Discussion also centered on the model minority myth as a barrier to recognizing the existence of workplace discrimination against Asians. Stereotypes perpetuating the image of Asian American children as math and musical geniuses may appear positive, but actually encourage a damaging narrative that deems Asians as a minority group not suffering from discrimination. The many repercussions include, for example, the separation of Asians from the rest of America by lumping them into one homogenous group and the characterization of all Asians as being polite and submissive.
The panel then outlined the current state of workplace discrimination laws and provided tips for Asian employees to keep in mind when reporting such conduct in the workplace. According to William Li, legal protections against workplace discrimination exist at both federal and state levels. Some states, such as New York, will have a more extensive list of those protected from workplace discrimination than the Federal law. Tips to keep in mind when reporting workplace discrimination include maintaining an extensive paper trail, remembering that harassment need not be severe or pervasive in order for the employer to be liable, and that a complainant does not have to complain to their employer or file a formal grievance in order to establish liability.
While discriminatory incidents against Asian Americans have increased in public since COVID-19, it is important to keep in mind that because most work remains remote, the full impact may not be seen until later.
Thank you to speakers Helen Park and William Li for their time and insight, and Yoojin DeNiro for moderating. Additional thanks to the Cozen O’ Connor firm for hosting the webinar. Those interested in learning more about AABANY’s Labor and Employment Law Committee can do so here.
On June 25, AABANY presented a CLE Program on divorce property disputes in the context of COVID-19, featuring panelists from practitioners in matrimonial law and real estate law. The panel outlined influences of the pandemic upon real property disputes in divorce proceedings, and recounted actual cases to demonstrate. Speakers included Margaret Ling, Senior Counsel at Big Apple Abstract Corp. and Co-Chair of the AABANY Real Estate Committee; Derrick Rubin, trial attorney associate at Wisselman, Harounian & Associates; Jerome Wisselman, Managing Partner at Wisselman, Harounian & Associates; and Irene Angelakis, Founding Owner at Law Offices of Irene Angelakis.
Derrick Rubin began by discussing the basic considerations of property disputes. Family homes are typically the largest asset, and disputes center around who gets the house, whether or not to sell, or if one spouse should buy out another. Another necessary consideration is the legal theory of equitable distribution, which emphasizes a fair rather than equal distribution of property on the basis of various factors. Some examples include how long the parties were married, their individual needs, and the financial contribution each party made during the marriage.
Margaret Ling then outlined examples from past cases to demonstrate the benefits of in-person dealings and how remote demands of COVID-19 impose challenges. In a Chase Bank refinance transaction, a couple sought a $2 million refinance on their condo. However, the lawyer noticed the husband seemed nervous, the wife was fidgeting, and her identification appeared fake. Upon further inquiry, it was discovered that the husband was in the midst of a divorce and had brought his girlfriend in an attempt to make property adjustments while his wife was traveling — not permitted under domestic relations law which forbids property adjustments without spousal approval. Today, legal transactions that depend upon accurate identification must come up with new solutions.
Irene Angelakis continued the discussion with tips on how to avoid disputes during the pandemic and also raised ethical considerations. She talked about taking into account pandemic-induced income changes, a common circumstance today, by giving parties more realistic timelines to decide on refinancing. Another involved taking social distancing precautions if both parties decide to sell the house. The most important takeaway is that both parties should try to settle property disputes because the courts and trials are limited options during COVID-19. Irene concluded with the topic of ethics by discussing disclosure requirements, matrimonial retainer agreements, fee disputes and escrow.
A final topic explored by Jerome Wisselman was asset protection. Asset protection, through prenuptial and post-nuptial agreements, are preventative legal measures taken to avoid property disputes during divorce. Provision of detailed financial statements by both parties, addressing potential future investment returns, and deciding on whether retirement benefits will be separate or together, are necessary for the creation of a fair and accurate asset protection agreement. The main takeaway is that current divorce property disputes that have been further complicated by COVID-19 circumstances may have been avoided if more asset protection agreements existed.
Thank you to all the panelists for their valuable time and insights, and thanks to the Real Estate Committee for organizing this timely and informative CLE program. To view the recording of the CLE, click on the image at the top. If you would like to learn more about AABANY’s Real Estate Committee, click here: https://www.aabany.org/page/120
On July 13, 2020, from 12:00-1:30 PM, the New York City Department of Health and Mental Hygiene (DOHMH) Partner Engagement Unit will be hosting a webinar on the Test & Trace Corps.
The Test & Trace Corps is an initiative to reduce COVID-19 transmission in New York City by providing guidance and assistance to people who have COVID-19 or are identified as having been exposed to the virus.
Speakers from the New York City Human Rights Commission (NYCCHR) and the Office for the Prevention of Hate Crimes (OPHC) will also provide resources to Asian Pacific Islander (API) communities to report anti-Asian bias and hate crimes that may occur as NYC continues to reopen.
Panelists will include Dr. Neil Vora from the New York City Health Department, Flora Ferng from NYCCHR, and Eunice Lee from OPHC.
On July 9, 2020, the New York City Commission on Human Rights (NYCCHR) will be hosting a virtual community forum on the impact of COVID-19, protections, and resources.
The panel will feature representatives from the NYCCHR, NYC Mayor’s Office of Immigrant Affairs, NYC Mayor’s Office to Protect Tenants, NYC Human Resources Administration, GetFood NYC, and Queens Legal Services.
On June 23, the Asian American Bar Association of New York (“AABANY”) presented its Small Business Navigation of COVID-19: A Briefing on Relief and Remedies panel as a part of AABANY’s wider initiative to provide support for those adversely affected by COVID-19. The event highlighted professionals working in a variety of fields and addressed concerns regarding how to safely open up and potential next steps for small businesses. The panel was moderated by Margaret Ling, Senior Counsel at Big Apple Abstract Corp. and Co-Chair of the AABANY Real Estate Committee, and featured Amol Pachnanda, Partner at Ingram Yuzek LLP and Co-Chair of the AABANY Real Estate Committee; William Ng, Shareholder at Littler Mendelson P.C.; Anthony Kammas, Partner at Skyline Risk Management, Inc.; William Hao, Counsel at Alston & Bird LLP and AABANY Treasurer; and Anthony M. Bracco, Partner at Anchin Accountants and Advisors.
Amol Pachnanda began by discussing COVID-19’s effect on the tenant-landlord relationship and best practices for tenants to avoid eviction. Tenants should be familiar with the lease agreement and seek legal counsel in any disputes with the landlord. Communication between tenants and landlords is critical as both parties possess significant incentives to avoid eviction. Tenants should be aware that the Moratorium on Evictions has been extended for an additional 60 days and any rent demands must be nullified if the tenant states that they have been impacted by COVID-19. Additionally, New York State real estate personal guarantees and “Good Guy Guarantees” have been made non-enforceable as tenants are no longer legally bound to vacate within a set timeframe if they are unable to pay their rent.
William Ng addressed how small businesses should reopen and some of the potential legal issues with phase 2 and phase 3 reopening. Business owners must go online and complete the New York Forward safety plan template and keep the plan on the premises at all times. Each business must affirm whether they have submitted a plan or have a plan in place during inspections. Small businesses are also encouraged to maintain a cleaning plan and document daily hygiene and sanitation activities to limit employer liability in the event that an employee does contract COVID-19. If an employee does contract COVID-19, small business owners are responsible for reporting the case to the relevant authorities and putting together a plan that ensures the safety of the other employees. The plan should include contact tracing measures and other appropriate protocols to limit contact and exposure.
Anthony Kammas discussed how small businesses can maintain their insurance coverage while reopening and other ways to mitigate liability. Employers should review their business policies and keep detailed records of their sanitation efforts to make sure they can retain their coverage in the event that individuals claim they contracted COVID-19 on the premises. Moreover, it is critical that employee handbooks are updated to address the challenges currently posed by COVID-19. Employers should also be mindful of the HIPAA liabilities associated with additional employee screenings. If employers contact trace, any information regarding the infected individual must remain confidential. As many policies do not cover the cost of sanitation and cleaning, Anthony Kammas recommends seeking third-party cleaning services to shift liability down away from the business owner and to the cleaning service if an incident were to occur. Small business owners should be more careful when buying new policies as carriers are becoming increasingly narrow in their wording to avoid excessive coverage.
William Hao then explained how Chapter 11 bankruptcy may be a viable option for struggling small businesses. Chapter 11 bankruptcy focuses on restructuring and reorganizing as the business undergoes a court-supervised process by which creditors and debtors come together to discharge bad debts and re-negotiate contracts and formulate a plan moving forward. Filing for Chapter 11 bankruptcy provides a business a set of tools and leverages to incentivize creditors to come to the table and establish an agreeable plan for all parties. Businesses are entitled to an automatic stay, which stops any litigation and collection efforts that are burdening them. Businesses can also reject bad contracts during this process. Creditors are incentivized to negotiate with debtors as creditors are aware that any contracts paid out during this time would amount to a smaller fraction of the original debt. In addition, the absolute priority rule is voided, and other regulations and costs that had previously barred small businesses from filing for Chapter 11 bankruptcy have been waived.
Lastly, Anthony Bracco discussed how small businesses can still apply for benefits under the Payment Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”). Under the PPP, small businesses can apply for up to two and a half months’ worth of employee payroll costs with any new loans having a five-year repayment period. These loans qualify for 100% loan forgiveness if they are spent within 24 weeks and at least 60% is spent on payroll costs. The percentage of loan forgiveness is reduced if employers reduce the compensation of anyone earning $100,000 by 25% or more or reduce full-time equivalents. However, employers are not accountable for restoring full-time equivalent employment if employees are not willing to return to work or due to government shutdown. Small business owners can apply for loan forgiveness any time within the 24 week window if all of the PPP loan is spent. As for the EIDL, small business owners can obtain a loan up to $150,000 with an advance loan of $10,000. Even if the full EIDL loan is not granted, small business owners are entitled up to the $10,000 advance loan. Small business owners can apply for both the PPP and the EIDL but must deduct the $10,000 EIDL advance loan from the PPP loan. Anthony Bracco also described different options available for small business owners to cover employee costs in addition to applying for the PPP. Instead of cutting headcount by a certain percentage, small business owners can reduce employee salaries by the percentage of those that were to be terminated and the Department of Labor will cover a portion of the pay lost.
We would like to thank Margaret Ling for moderating and organizing this informative event and the panelists for their time and dedication to help those adversely affected by COVID-19. To learn more about the Real Estate Committee, click here. To view the recording from the webinar click on the image above.
