Foresight is 2020: Preparing for the Future of Texas Business Under COVID-19

Foresight is 2020: Preparing for the Future of Texas Business Under COVID-19

April 6, 2020

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By Ryan Brannan
“We are not yet done with our response.” – Governor Abbott’s initial declaration following the announcement of his March 31st, and most recent, executive order on COVID-19. 

The almost daily slew of executive orders (5 in the last week alone) correlates with the ever-changing environment and uncertainty that COVID-19 has created for Texans and the rest of the world. Governor Abbott has already implemented, or extended, at least six executive orders since his disaster declaration for Texas on March 13th. To put that into perspective, he has not implemented that many during his entire 6-year tenure as governor. 

What does this level of uncertainty mean for employers? To determine that, we must look at what is currently happening and begin assessing what could happen going forward. Governor Abbott and leadership at the local, state, and federal level are working hard to ensure Americans stay safe. In doing so, there are two activities in particular that should be of utmost importance to employers. First, governments are removing regulations at a feverish pace. Second, they have distinguished between “essential” and “non-essential” businesses.

Employers should now be looking at what government red-tape exists that hinders their ability to care for and protect their employees. For example, Governor Abbott’s orders have waived everything from trucking regulations to occupational licensure requirements. Supply chains are being tested and the President and Governor are talking about a new (fourth) round of stimulus to protect our infrastructure. Texas legislative members are already calling for many of the repealed regulations to be permanent.

The delineation between what is “essential” and what is “non-essential” has wide-ranging ramifications. These definitions are also changing. For example, in his most recent order, Governor Abbott adds cosmetology salons and the like to businesses that should shutter.  However, he added churches to the list of “essential” businesses and included activities such as visiting parks, hunting or fishing. These are all fluid, as a governor’s staff member recently told me, “we are revising as need and dynamics change.” Employers should look for reasons to be deemed “essential” if at all possible.

With businesses shuttering, employees being fired, furloughed, or forced to take pay decreases, it is difficult to look beyond the day to day changing environment – but the best way to succeed in the post-coronavirus world, is to do just that.

What we do know, is that this virus will change the way we do business in Texas and America as a whole. Examples are plentiful. Insurance carriers have been wary of providing protections for employees working from home. Will that continue? Is COVID-19 injury compensable? If so, for what industries? How will “force majeure” (Act of God) clauses hold up? How rampant will the litigation be? To that end, my law firm is already experiencing a steady influx of work related to failures to perform under contracts based on commercial transactions, real estate dealings, sales and services, as well as disputes arising out of business interruption, partnership disagreements, landlord-tenant, and employment issues.

There is no doubt that COVID-19 is a major market disruptor – maybe the greatest one we have ever seen. Now is the time to start thinking about what your company is going to look like in the future. 
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