Key Points

  • With the World Health Organization having declared a Public Health Emergency of International Concern, firms should take reasonable precautions to protect themselves and their personnel.
  • Below are some suggested practices U.S.-based firms can adopt, based on currently-available information.
  • Firms should closely monitor the guidance issued by leading health organizations and medical providers, as information regarding the virus continues to develop and may impact the measures discussed below.

The continued spread of the 2019 Novel Coronavirus (“COVID-19” or the “Coronavirus”) has left U.S.-based asset managers and other employers scrambling to develop employment policies and practices to protect their firms and personnel. While the situation surrounding the disease is extremely fluid, with new revelations developing daily, this Special Bulletin offers our current view of best practices to respond to the emerging crisis:

1. Continue to Monitor Developments

Because Coronavirus is first and foremost a public health issue, asset managers should remain abreast of the latest guidance issued by the leading health organizations tracking the disease, including the Centers for Disease Control and Prevention (“CDC”), the World Health Organization (“WHO”), and the European Centre for Disease Prevention and Control (“ECDC”). Links to the relevant pages of their respective websites are as follows:

Health insurers and medical providers may also be useful resources for up-to-date information on the virus and how employers should respond.

2. Understand the Legal Framework

Firms developing human resources protocols in response to the Coronavirus should be cognizant of the relevant legal backdrop. For example, the Occupational Safety and Health Act (“OSHA”) requires employers to furnish a place of employment that is “free from recognized hazards that are causing or are likely to cause death or serious physical harm.”1 Many states impose similar requirements.2 These laws require firms to be proactive in their response to COVID-19 and any other employee health risk.

At the same time, other statutes may limit firms’ ability to take certain precautions. For example, the Americans with Disabilities Act (“ADA”) generally prohibits employers from requiring employees to undergo medical examinations unless “they are job-related and consistent with business necessity.”3 Thus, a blanket policy requiring all employees to get tested for the Coronavirus, in the absence of any objective reasons to believe the individuals being tested have contracted the virus, could run afoul of the law, despite an employer’s best intentions in promulgating it.

Other laws also may be implicated by firms’ responses to the Coronavirus. Employees who contract the virus, or who care for dependents who have become sick, may be entitled to leave under various laws (e.g., the Family Medical Leave Act, New York Paid Family Leave Law, New York City Earned Safe and Sick Time Act, and applicable state short term disability laws), depending on the relevant facts and circumstances. Federal and state wage and hour laws require firms to compensate employees based on time they spend working outside the office. To the extent firms impose limitations on employees’ personal travel, state statutes prohibiting discrimination based on employees’ recreational activities also may come into play.

3. Establish a Chain of Command

As is the case in any potential crisis, firms should ensure they have an effective chain of command for responding to COVID-19. One or more senior individuals – such as a firm’s head of human resources, general counsel, chief compliance officer, or chief operating officer – should be designated as the point-person(s) for a firm’s response, including clearly communicating with firm employees regarding the firm’s protocols and expectations. Such point-persons should remain abreast of the latest developments regarding the virus, remain in regular contact with other firm decisionmakers and the firm’s legal counsel, and help ensure that the firm speaks with “one voice” regarding its response.

4. Encourage Commonsense Precautions

The CDC has recommended that businesses take the following steps, among others:

  • Actively encourage sick employees to stay home from work and seek prompt medical attention;
  • To the extent employees exhibit signs of illness, such as repeatedly coughing or sneezing, send them home and encourage them to promptly consult with medical providers;
  • Remind employees to cover their mouths and noses when they cough or sneeze, and to immediately throw used tissues in the garbage;
  • Remind employees of the importance of regularly washing their hands (for at least twenty (20) seconds with soap and water) and/or using an alcohol-based hand sanitizer containing at least sixty percent (60%) alcohol;
  • Stock up on relevant needed supplies, including soap, hand sanitizer, tissues, paper towels, disinfectant, and trash receptacles;
  • Encourage the regular cleaning of frequently-touched surfaces in the workplace, such as workstations, countertops, and doorknobs;
  • Encourage employees to avoid close contact with individuals who are ill, whether inside or outside the office; and
  • If a member of an employee’s household contracts the Coronavirus or exhibits flu-like symptoms, consider directing the employee to remain out of the office for a period of time, as discussed below.

See https://www.cdc.gov/coronavirus/2019-ncov/specific-groups/guidance-business-response.html.

5. Implement Temporary Travel Restrictions

Firms also should consider temporarily restricting or prohibiting business travel to high-risk areas, and perhaps more broadly as circumstances dictate. Such restrictions could prove important both to protect employees from exposure to COVID-19 and to limit the risk of travelers becoming stranded by travel limitations or quarantines. A growing number of Fortune 500 companies have implemented such measures, ranging from discouraging travel to certain affected regions to flatly banning all non-essential domestic and international trips.

As of March 2, 2020, the CDC has advised travelers to avoid all non-essential travel to China, Italy, South Korea, and Iran, and this past weekend, the Trump Administration issued new travel restrictions for several of these countries. The CDC also has identified Japan and Hong Kong as locations with a heightened risk of transmission (https://www.cdc.gov/coronavirus/2019-ncov/travelers/index.html). Several business travelers to or from these locations have been stranded away from home as a result of governmental restrictions imposed during their trips.

Reports indicate that the virus appears to be spreading rapidly. Indeed, the CDC reported a fourteen percent (14%) increase in countries with confirmed cases of the Coronavirus in just twenty-four (24) hours last week: As of 11:00 AM ET on Thursday, February 27, the CDC website listed fifty (50) different countries with confirmed cases of COVID-19; by 11:00 AM ET on Friday, February 28, the list was up to fifty-seven (57) countries with confirmed cases. As of 11:00 AM ET on March 2, 2020, an additional eleven (11) countries have been added to the CDC’s list, bringing the total number to sixty-eight (68).4 Meanwhile, at least ten (10) U.S. states have reported cases of the disease,5 and media outlets have reported that at least six (6) people have died from the Coronavirus in Washington state alone.6 Under these circumstances, the safest course may be to limit travel to the extent feasible until further information regarding the spread and threat of the virus becomes available.

Firms also should consider discouraging employees from taking non-essential personal travel, at least to areas identified by the CDC as presenting heightened risk. Discussions surrounding employees’ personal travel plans can be sensitive, with some employees having family, friends, or significant others living elsewhere and other employees already having planned and/or paid for trips. Dissuading personal travel also theoretically could implicate certain state and local laws prohibiting discrimination against employees who engage in particular recreational activities.7 But given the high stakes and the clear non-discriminatory reasons for discouraging risky travel, firms may wish to advise their employees to proceed with caution in this regard.

6. Consider Implementing Self-Quarantines

To the extent employees do travel to areas presenting increased risk, either for business or personal reasons, or are otherwise exposed to the Coronavirus, firms should consider requiring them to “self-quarantine” for a period of time rather than immediately returning to the office. According to the CDC website, the recommended quarantine period for COVID-19 is two (2) weeks, “because 14 days is the longest incubation period seen for similar coronaviruses.” To the extent firms have policies limiting or prohibiting remote work arrangements, they may consider temporarily amending such policies for employees at heightened risk of exposure.

Imposing quarantines can lead to other legal or contractual issues of which firms should be cognizant. For example, if employees work remotely during a quarantine, they must be compensated for doing so. For non-exempt employees, care should be taken to record their hours of work, to ensure they are paid accurately and receive any required overtime. Exempt employees also must be compensated if they perform work during a workweek and/or are contractually entitled to such pay. Firms also should ensure that a quarantine does not inadvertently trigger any provisions of an applicable employment contract, severance plan, or other document, such as a provision permitting employees to resign for “Good Reason” under some circumstances.

7. Engage in Strategic Contingency Planning

Finally, firms should consider engaging in business continuity planning so that they are prepared for a “worst case” scenario. They should ensure that essential personnel are trained and equipped to work from home, if needed, and should consider “beta testing” such work arrangements. As part of this effort, firms should ensure that their cybersecurity protections are sufficient for remote usage, and that employees are well-versed on best practices for maintaining information security while working outside the office. Firms also should ensure they have a mechanism for communicating with employees and other key individuals in the event of an emergency.8 Hopefully, firms’ contingency plans will never need to be implemented, but prudence suggests being prepared just in case.