Med Spa Law Today

As this relentlessly awful year mercifully draws to a close, a light at the end of our pandemic tunnel is rapidly approaching. COVID-19 vaccines are poised for approval, and it is expected that distribution will begin in earnest shortly. But no matter how much and how confidently the FDA and other health experts proclaim these vaccines to be safe and effective, there are large numbers of Americans who say they won’t get the shot when it becomes available. The most recent Gallup poll found that only 63 percent of Americans say they are willing to be inoculated against the disease. Many of those who don’t want to get vaccinated will soon find out that they work for an employer who feels differently. Those employers may also tell them that they either need to get the vaccine or need to find a new job. And, in most cases, employers may be well within their rights to terminate employees who refuse to take the COVID-19 vaccine. Mandatory Vaccinations Are Not New Companies that have spent the better part of the year – and lots of money - trying to keep their workplaces COVID-free see the vaccine as the apex of those efforts. With a fully vaccinated workforce, business owners can operate without disruption and provide employees, customers, clients, and patients with confidence and peace of mind. But all of those benefits of the vaccine only accrue to fully vaccinated workforces. So, many companies may mandate that employees get their shot as a condition of continued employment. By doing so, they are following a legally sound path that predates the current pandemic. Well before anyone had heard of coronavirus, plenty of employers, primarily in the health care sector, required employees to get the flu vaccine and vaccinations against other infectious diseases. Most public school districts also require proof of vaccinations before a student can enroll and attend classes. Since most employees in Illinois work on an “at-will” basis, they can face termination for almost any reason not expressly prohibited by federal, state, or local laws. Generally, no law stands in the way of an employer requiring the COVID-19 vaccine for its workers. ADA and Religious Exceptions However, employers who make vaccines mandatory need to be mindful that employees with legitimate health or religious concerns about the vaccine may be protected from termination and other adverse employment actions if they refuse the shot. But these exceptions don’t necessarily apply just because someone doesn’t believe in vaccines generally (“anti-vaxers”) or thinks that forcing them to get vaccination is an infringement on their liberties. Employees who have a disability recognized under the Americans with Disabilities Act (ADA) that prevents them from taking the coronavirus vaccine cannot be forced to get the vaccine, so long as their exemption does not impose an “undue hardship” on the employer. Such disabilities in this context may include a compromised immune system or an allergy to an ingredient in the vaccine. While there has been no definitive guidance on the subject, one could credibly argue that an employee’s refusal to get vaccinated is an “undue hardship” if it places the health and safety of other employees and visitors at increase risk of infection. Even in such cases, however, an employer may need to make a “reasonable accommodation” for the employee, such as allowing them to work from home. Similarly, the anti-discrimination provisions of Title VII of the Civil Rights Act of 1964 may protect a worker if their “sincerely-held religious beliefs” preclude them from getting a vaccination. Such beliefs do not include political or personal views. The burden is on the employee to demonstrate the legitimacy of their religious objections to the vaccine. More Than Legal Issues To Consider Even when an employer is within their legal rights to require employees to get the COVID-19 vaccine, other considerations may weigh against such a mandate. For example, they may need protection against an employee who has an adverse reaction, even if they signed a waiver upon receiving the shot. A vaccination requirement may also get an adverse reaction from employees generally as well as the general public if it seems heavy-handed and overreaching. Of course, those that decide against a mandate face risks if someone does contract the coronavirus in the workplace and sues. Please Contact Grogan Hesse & Uditsky With All Of Your COVID-Related Employment Questions If you have questions or concerns about how to handle vaccinations or other employment issues related to COVID-19, please call us at (630) 833-5533 or contact us online to arrange for a consultation.

Yesterday, in an update to its PPP FAQ, the SBA clarified its review of the “good faith” certification required in applying for PPP loans. As PPP applicants are aware, to apply for PPP loans, an applicant must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” For most applicants, COVID-19’s ramifications made this statement a no-brainer. But many left wondering how the SBA would police this clause. After all, borrowers are relying on PPP loan forgiveness if they properly use their loan proceeds. There is concern that the SBA’s review of the good faith certification could thwart borrowers’ forgiveness goal even if they used their loans for payroll and other areas acceptable for forgiveness. The SBA’s announcement gave reason to alleviate that concern for some borrowers. In Question 46 of its PPP FAQ (found here in its entirety), the SBA states that borrowers with an original principal amount of less than $2 million will be deemed to have made the required good faith certification. In the legal world, statements deemed to be true are facts for all intents and purposes. This clarification likely means that the SBA won’t even spend the time reviewing good faith certifications for loans under $2 million. Keep in mind, however, that the $2 million threshold applies to applicants taken together with their affiliates. If your total loan amount falls under $2 million, then you’ll have the benefit of this safe harbor. For borrowers with loans greater than $2 million, you won’t have this safe harbor but that doesn’t mean you couldn’t have made a good faith certification. Your cases will be reviewed under their individual circumstances. In effect, today’s announcement changed little in advising how the SBA will review loans over $2 million. There remains uncertainty as to what the audit process for this good faith certification will look like and whether borrowers will have an opportunity to appeal, but if your loan is under $2 million you can breathe a small sigh of relief in knowing the certification you made in your application won’t be scrutinized. If you have any questions on this latest announcement or just want guidance on the PPP in general, give us a call. We’ll keep you updated as more clarification comes out.

On Wednesday, the Senate passed an historic $2 trillion economic stimulus package that is expected to come out of the House this weekend and be signed by the President. While much of the stimulus is providing support to big business and directly to taxpayers, there are also substantial benefits for small businesses. Called the “Paycheck Protection Program” (the “PPP”), it is part of the “The Coronavirus Aid, Relief, and Economic Security Act” (the “CARES Act”), because it’s meant to ensure that businesses have the funds to pay their employees and to prevent layoffs. Loans offered through the program may be forgiven under certain circumstances. However, employers will need to pay back the interest accrued, effectively making the principal a grant. What is the purpose of PPP? The PPP provides short-term cash flow assistance to small businesses to assist them and their employees with the economic impact of the COVID-19 pandemic. Funds under PPP will be made available during the period prior to June 30th by lenders certified by the SBA and guaranteed by the federal government. Who is eligible for PPP? Benefits under PPP are generally available to small businesses with 500 or fewer employees (full and part-time). Eligible small businesses also include sole-proprietors, independent contractors, and other self- employed individuals, including even “gig economy” workers. Note that the SBA publishes guidelines that may prohibit certain businesses larger than average in their industry, and you should consult your individual counsel to ensure compliance prior to applying. What are the permitted uses of PPP funds? Small businesses that receive loans under the PPP must use loan funds to pay payroll costs (i.e., salaries, wages, vacation, parental, family, medical, or sick leave, severance, retirement benefits, and state or local taxes assessed on compensation), costs related to group health care benefits (i.e., insurance premiums), employee commissions, interest on mortgage obligations, rent, utilities or interest on other debt, incurred prior to obtaining the loan. Note that loan funds under PPP may not be used by employers to pay salaries in excess of $100,000. What are the terms of PPP loans? Loans under PPP may be as large as 2.5 times a business’s average monthly payroll costs over the last 12 months, not to exceed $10 million. Salaries over $100,000 will not be included purposes of determining payroll costs. PPP loans have a maximum interest rate of 4% and may carry maturity dates up to 10 years. Eligible borrowers under PPP may also defer payment of non-forgivable principal and interest for at least 6 months but not more than a year. No collateral is required to be pledged and the normal personal guarantee requirement for SBA loans appears to be waived. Thus, the loan will be nonrecourse to the employer’s owners. How will the PPP Loans be forgiven? If the business uses the loan funds for the approved purposes and maintain the average size of its full-time workforce based on when it received the loan, the principal of the loan will be forgiven, meaning the company will only need to pay back the interest accrued. The loan forgiveness may be reduced pro-rata if the average number of full-time employees during the forgiveness period fails to satisfy the applicable requirements. How should a business apply for a loan under PPP? To apply for forgiveness, businesses must submit documentation regarding the eligible uses of loan funds, a certification that such documents are true and correct, as well the amount to be forgiven, and any other documentation the SBA deems necessary. The SBA will purchase any loan forgiveness amounts from its certified lenders and this canceled indebtedness will not result in taxable income to the business. While further regulations are on the way, it is clear that the government is serious about getting help to small businesses in an expedited manner. Our team is keeping up to date on the developments and will be sure to advise you accordingly. Should you have any questions, don’t hesitate to call or email us.

“Am I covered for coronavirus?” Amidst the myriad issues resulting from the coronavirus pandemic, business owners are questioning whether their insurance policies cover their unexpected losses. Like most insurance inquiries, the answer depends on the detail of the underlying policies. Here are some types of insurance that your business may carry, and the factors that go into whether they’ll cover your business for the coronavirus pandemic. Business Interruption . There’s no doubt that the pandemic has interrupted business operations across just about every industry, but the question of whether it triggers interruption coverage is another matter. Business interruption is most often tied to a commercial property insurance policy, wherein the coverage applies to economic losses resulting from disruptions in business operations. However, most business interruption insurance won’t trigger without a physical loss to the property, such as fire damage. Whether the coronavirus actually persists on inanimate objects is still an issue of current debate, let alone whether the virus damages property. There is some precedent for an unseen substance causing physical damage (such as asbestos), but without a separate endorsement covering virus or bacteria it will likely be hard convincing insurance companies to cover coronavirus interruptions under a typical business interruption policy. Contingent Business Interruption . Another business interruption insurance, contingent business interruption (or supply chain insurance) covers losses that don’t belong to your property, but rather the property of your customers or suppliers. If a key vendor drops out of your supply chain, it’s reasonable to wonder whether this insurance covers your loss. Like business interruption, the loss to trigger coverage from a contingent business interruption policy must also be physical . Liability Insurance . Apart from business interruption, the coronavirus may result in claims from your customers. Commercial general liability insurance covers your business for defense and indemnity costs resulting from third party lawsuits. For instance, health care providers may find themselves facing claims that they did not exercise reasonable care in protecting patients from exposure to the coronavirus. Event cancellation . Sports games, concerts, conventions and many other events are being cancelled around the world due to the coronavirus. Some event cancellation insurance policies may include coverage for cancellation due to infectious diseases. On the other hand, some policies include endorsements that specifically exclude infectious diseases. If you believe that your business may be covered by any of these policies due to the coronavirus pandemic, you must notify your insurer within the timing requirements of your policy. If you’re unsure whether your losses trigger coverage, we’re here to help you. Contact us at (630) 833-5533 or info@ghulaw.com for a free consultation.

As the COVID-19 pandemic continues to affect businesses at every level, dentists and dental offices are no exception. With practices suffering from a sharp decline in patients being treated, dental offices may begin to struggle to continue to timely pay all of their business expenses, including rent. As almost all commercial leases will contain an Act of God or Force Majeure clause, dental tenants or dental landlords may be tempted to invoke these provisions. However, before invoking the Force Majeure clause, you will want to be sure to check the following: Whether your business insurance will cover events related to the COVID-19 pandemic. While not usually the case, some business insurance policies will cover civil actions by governmental authorities. All lease requirements in connection with invoking the Force Majeure clause, including timeframe for notice, method of notice and what events can actually trigger the clause. The terms of your Force Majeure clause to determine whether the COVID-19 pandemic is likely to be covered. This may not be as straightforward as you think. Instead of language like “national pandemic” or “global disease”, your lease may include events that are, by their nature, out of the control of either the tenant or the landlord. The terms of your Force Majeure clause to determine whether it excuses one party from performance or, much more commonly, just provides additional time for such party to perform its responsibilities under the lease. While rent obligations are not typically covered by this, other obligations may be, such as clauses requiring continuous operations, lease commencement or delivery dates, tenant alterations and repairs. If rent will be due regardless of whether the Force Majeure clause is invoked. Most commercial leases contain provisions stating that rent shall at all times be payable when due, and no clause in the Lease or any other circumstances will relieve the tenant from such duty to pay. As the interruptions from the COVID-19 pandemic continue to increase in duration and reach, it is important to consider your options under a commercial lease to best determine the course of action that will expose you to the least amount of liability. If you are unsure regarding the terms of your commercial lease with respect to what actions you may take, please feel free to contact us at (630) 833-5533 or info@ghulaw.com.