How the Coronavirus Pandemic Affects Texas Businesses
Austin, TX (Law Firm Newswire) April 20, 2020 – Over the past month, the Coronavirus, or COVID-19, has rapidly spread across the globe, affecting millions of people. To help slow down the spread of the disease, state governments have implemented an escalating series of recommendations to implement social distancing measures – some of which have turned into legal mandates. The effect that these restrictions have on Texas businesses is yet to be seen; however, it appears that it will be significant.
Just last week, Governor Greg Abbott issued an executive order limiting social gatherings to 10 people, prohibiting eating and drinking at restaurants and bars, closing gyms, banning most people from visiting nursing homes, and temporarily closing schools. Individual cities and counties have also ordered people to stay home. As a result, thousands of Texas businesses must shut their doors. While the current executive order lifts these restrictions in early April, other states have seen such restrictions extended. In short, there is no telling how long these closures and restrictions will remain in place.
Given the realities of the current situation, Texas businesses may be affected in a variety of ways. For many business owners who have been forced to close temporarily, the primary concern is remaining solvent. United States lawmakers have passed two relief packages to help individuals and small businesses deal with the Coronavirus crisis, and are currently working toward a third bill. This may provide small business owners with much-needed relief, such as emergency loans.
The COVID-19 pandemic will likely raise other issues for many businesses. For example, due to the Governor’s executive order to limit gatherings to those with fewer than ten people, many events such as concerts, conferences and sporting events had to be canceled. Indeed, even Austin’s annual SXSW conference and festival was canceled due to fears surrounding the Coronavirus. Canceling an event can raise a variety of legal issues, ranging from breach-of-contract claims to insurance disputes. Businesses should be prepared to address these issues to avoid further financial harm to their bottom line.
In some cases, it may be possible for a business to get out of certain contractual obligations. Texas law recognizes the “force majeure” doctrine, which can excuse a party’s non-performance when the non-performance was due to “circumstances beyond the reasonable control of the party or by an event which is unforeseeable at the time the parties entered into the contract.” Of course, the specific terms of the contract controls, but many contracts now contain force majeure clauses.
Texas businesses may also face employment or discrimination claims if they are forced to lay off or furlough employees, or reduce their hours. Of course, the negative impact of the Coronavirus pandemic will justify many employment decisions; however, such decisions cannot be made on the basis of an employee’s race, color, sex, religion, national origin, age or disability status.
Other businesses may be facing liability based on the spread of the virus. For example, several passengers have recently filed a lawsuit against Princess Cruise Lines, claiming that the company was grossly negligent in its “lackadaisical approach” to protecting the safety of its passengers. Similarly, families of residents of a nursing home in Washington have filed claims against the facility making similar claims.
Attorney Gregory Jordan reminds business owners that the full effect the Coronavirus will have on the Texas economy is yet to be seen. However, with experts expressing the belief that the worst of the pandemic is not yet upon us, it appears the effect could be monumental. He encourages business owners who anticipate upcoming legal issues to reach out to an Austin business attorney as soon as possible for advice and guidance in this very challenging time.
At the Law Offices of Gregory D. Jordan, Attorney Jordan represents businesses in all types of Texas litigation matters, contract disputes and other business-related issues. Attorney Jordan has over 30 years of relevant experience helping businesses confront the legal issues they are facing throughout Travis County and Texas.
Contact the Law Offices of Gregory D. Jordan at