Spring Cleaning Part 2 – Legal Considerations for Business

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Ah yes, hope is in the air as we turn the corner on winter and approach spring.  This year more than most, hope is riding on a wave of vaccinations that promises to break the grip of uncertainty that COVID has had on our daily lives.  Businesses in particular, many struggling to simply stay alive, are eagerly welcoming a potential wellspring of activity fueled by a year’s worth of pent-up demand.

We previously discussed the top 10 things Community Associations should adopt as part of their legal spring cleaning. Likewise, now is the perfect time for businesses to take a moment to assess whether they are legally ready to maximize the opportunities to come.  The following are 5 recommendations for businesses to conduct a ‘legal spring cleaning.’

1. “We’re not in Kansas anymore” – understand the new legal landscape. Over the last year, laws and regulations have changed, and in some cases dramatically.   Some of those changes were temporary responses to the COVID pandemic that are now permanent, while others are a consequence of significant political transitions at both the State and Federal level.  We’ve touched on a number of these changes over the last year.  For example, there’s new OSHA COVID guidance, previous temporary Virginia COVID workplace standards are now permanent, Virginia construction and employment laws have seen dramatic changes, new industries are potentially open for business, and environmental policies have changed with the literal stroke of a Presidential pen.  There are new questions businesses may need to address, such as whether they can require employees to get vaccinated (and if so, should they).  Businesses need to understand how these changes will affect their operations.

2. Clean up those contracts. Speaking of legal risks, businesses need to have their contracts reviewed to ensure they are current.  Businesses may be tempted to use free or minimal cost online legal services, or practice law by Google to draft their own contracts.  Unfortunately, this often results in vague generic documents a business may not fully understand and that are not properly adapted to their needs or the jurisdiction they operate in.  We commonly see contracts that are poorly written, contain unenforceable provisions, miss important protections, and have unnecessary requirements. It is also common for businesses to use the same contract drafted years before that seem to work.  As noted in recommendation #1, the law has changed – a lot – and older contracts may not account for these changes, thus exposing the business to legal risk it was not aware of until it’s too late.  If your contract is over a year old, or was self-generated, it’s time to have it reviewed.

3. The Lawman is coming. Ok, to be fair, the lawman (i.e. regulators) never really left.  It’s a testament to the dedication of our State and Federal workers that they kept the Government’s lights on during this crisis.   While government agencies remained functioning, many did so at reduced or changed capacity to protect their employees and the public from unnecessary exposure.  Some agencies cut back on live inspections or had to adjust how inspections are conducted, such as using more remote means or avoiding indoor activities.  Some agencies exercised enforcement discretion in the face of business compliance challenges caused by COVID, while other agencies experienced a slowdown in activity and responsiveness as staff and attorneys worked remotely.  Businesses should expect agency compliance activity to return to pre-COVID levels in the coming months (and many are there already).  In addition, again going back to recommendation #1, businesses need to understand how their compliance requirements have changed so they implement the right practices.

4. Know thyself. While the lawman may be coming, the first and most important step in ensuring your business complies with laws and regulations is to conduct a self-audit.  Many businesses fundamentally changed the way they operated, such as adopting near-universal remote work or reducing operations to only the bare minimum needed to stay afloat.  As they return (to varying degrees) to in-person work and increased levels, businesses need to assess whether they’ve been keeping up with their legal requirements.  A business should assess whether it has made all necessary reports to regulators, whether it has all of its required recordkeeping up to date and available for inspection (or are they sitting in a teleworker’s dining room), are these reports accurate, and whether a company’s actions over the last year complied with its own by-laws and policy documents.

5. “We’re not in Kansas anymore – part deux”. Many businesses sought or are exploring new opportunities to diversify their portfolios during the pandemic.  Businesses should appreciate that new areas of business may have unfamiliar compliance requirements.  Businesses searching for new markets, for example, and looking to export their goods overseas for the first time need to appreciate the complexity of export requirements.  Other businesses may start looking to government contracts but may not fully appreciate the byzantine contracting rules that govern Federal and State contracting.  Businesses also need to understand the current state of the capital markets so they can assess what resources are available to support new business opportunities. 

The legal environment we are entering in the next 12 months is very different from the one we are leaving behind.  A healthy business engages a process of continual self-assessment, and this is should include a business’s legal matters.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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