Texas will begin gradually reopening for business on May 1st following state and local restrictions on personal and economic activities in response to the coronavirus epidemic.
On April 27th, Governor Abbott announced that Texas would be gradually reopening in phases beginning on May 1st. His executive order would allow the phased-in opening of previously closed businesses including retail, restaurants, movie theaters, malls, museums, and libraries at a 25% capacity in counties with more than 5 cases of COVID-19. If the county has less than 5 cases, they are allowed to open the same businesses at 50% capacity. If there is not a spike in confirmed case of COVID-19, the Governor suggested Phase 2 could allow the businesses to open at 50% capacity as early as May 18th.
Just because businesses will be allowed to open doesn’t mean that they all will. According to some news reports, many businesses will voluntarily choose to remain closed while they determine the best protocols to ensure the safety of their workers and their customers. Many other businesses will continue to operate on a strictly work-from-home basis.
The Governor’s order allowing the gradual reopening of the Texas economy has faced criticism. His critics contend that Texas is not yet out of harm’s way from the coronavirus and reopening the economy to quickly could lead to a new surge. We are cautiously optimistic, however, that businesses operating in a prudent manner and Texans taking personal responsibility for their own safety can help us get the Texas economy back on track without carelessly risking lives. If businesses reopen physical operations, we are urging them to carefully consider implementing heightened safety protocols to ensure the health and safety of every worker and customer.
Businesses should be aware that, at this time, there is no liability protection for causing health or injury to workers or customers for reopening in accordance with the governor’s order.
Businesses will be facing difficult decisions about employees. Many small businesses will be applying for the SBA Payroll Protection Program Loans (“PPP”) which may be wholly or partially forgivable. The purpose of the loans is to ensure that small businesses are able to retain their employees. As Texas companies gradually reopen, companies that are receiving the PPP funds should be mindful that terminating employees could jeopardize their ability to have the funds forgiven.
At this time, employees who are called back to work but refuse to work because of safety concerns may face termination for cause, thus being ineligible for unemployment insurance.
This is a delicate situation for both employers and employees. We are monitoring the situation to see if the Texas Workforce Commission or the Governor will establish new temporary rules that would allow an employee to refuse to work due to safety concerns without jeopardizing their unemployment insurance.
We remain in a situation of tremendous uncertainty. Rules continue to be made rapidly by executive order rather than our normal, deliberative democratic processes and can change by the day. With respect to federal programs like the SBA Payroll Protection Program, the SBA introduces new guidance regularly to address the questions that are arising with a flood of applications.
We are working from the safety of our homes to assist our clients in this time of tremendous difficulty and uncertainty. Please do not hesitate to contact us with your questions and concerns about reopening, renegotiating contracts and leases, restructuring your finances, or other aspects of dealing with the many disruptions caused by COVID-19.
Doug McCullough – McCullough Sudan, PLLC