This article was published in The Daily Record on November 18, 2020 - Download the Reprint In addition to Thomas Knab, this post was authored with input from Steven Gersz. A lawsuit among owners of a closely-held business like a limited liability company – sometimes referred to as a “business divorce” action – often involves issues for both transactional lawyers and litigators. Your authors, a transactional lawyer and a litigator, have worked together to help our clients get through the business divorce process on many occasions. A transactional lawyer’s role is, of course, much different than that of a litigator. Transactional lawyers are involved at the outset of the relationship and work with their business-owner clients to create companies and agreements and conduct transactions intended to help the clients accomplish their business objectives. They try to anticipate and address areas of potential conflict and design processes to resolve those conflicts and, failing that, include written provisions to manage the separation of the owners or the dissolution of the business. When a transactional lawyer represents one out of two or more potential owners of the business, they have to negotiate with the other side’s lawyers over the terms that will govern the contemplated relationship. Litigators usually do not get involved at the formation stage. However, when conflicts among owners arise they often work closely with their firm’s transactional lawyers to try to resolve those conflicts in a way that will allow the business to continue, or to negotiate terms to sever the now-adverse parties’ relationship. Lawsuits get filed when the parties are incapable of compromise on the business or financial issues or when one owner accuses another owner of conflicts of interests, self-dealing or other breaches of fiduciary duty. These types of lawsuits tend to be costly and are not quickly resolved. A client involved in a business divorce case must also endure the disruption to the business, including impacts on operations, employees, customers and vendors, as well as the stress and intense emotions almost inevitable when a long-term, and at least cordial, relationship sours and accusations of misconduct or dishonesty start to fly. Business divorces involving LLCs present their own particular problems. However, there are a number of things that owners can do at the formation stage to reduce the likelihood of litigation in the event of a future conflict that could lead to the termination of their relationship. The owners should have in place a signed, written LLC operating agreement. An operating agreement sets out the rules of the road and greatly reduces the likelihood of conflicting understandings and recollections that might destroy a business founded on an oral agreement. Although the New York LLC Law requires a written operating agreement, we often see disputes in which the parties used an “off-the-shelf” agreement with boilerplate provisions that were not tailored to the owners’ specific needs, or in which there is no written agreement of any kind. Where the LLC has no written operating agreement, the owners’ relationship will generally be governed by the default provisions in the LLC Law and judicial decisions interpreting that law. In those circumstances the owners may find that their rights and remedies are much different than they thought they were. In our experience, the best way to avoid, or reduce the negative impact of, conflicts between owners over critical aspects of their business is to plan for those conflicts in the operating agreement. The agreement should address decision-making processes. Who governs the LLC and what decisions can be made without the consent of the other member or members? Who decides when additional capital is needed, or profits are distributed? What happens if an owner can no longer actively participate in the day-to-day operation of the business? The operating agreement should include a mechanism to avoid deadlock over decisions that have to be made in the ordinary course of business, as well as major decisions. The operating agreement should also address compensation. In many closely-held businesses, the owners also work for the business and it is their primary source of income. How will the owners’ salaries and other benefits be set and paid? Can an owner have her services terminated, and if so, by whom and on what grounds? An LLC should also contemplate (and perhaps restrict) transfers of a member’s interest and anticipate the need to purchase a member’s interest and, if necessary, dissolve. A good buy-sell clause will cover the purchase of a member’s interest by describing the circumstances under which that interest may or must be sold, the method to be used to value the member’s interest, and the payment terms. Concerning dissolution, most boilerplate operating agreements allow for the dissolution of the LLC only under very limited circumstances. Moreover, if there is no written operating agreement, the default to the statutory dissolution provisions of the LLC Law makes the dissolution of an LLC more difficult than the dissolution of a corporation. For example, the courts have consistently held that allegations that the majority members engaged in unlawful or oppressive conduct against the minority members were insufficient to plead the statutory grounds for the dissolution of an LLC, even though the oppression of minority shareholders would support a corporate dissolution action. In fact, the courts hold that a deadlock among the members will not support a request for dissolution unless the aggrieved party shows that LLC management is unable or unwilling to reasonably pursue the stated purpose of the LLC, or that continuing the business is financially unfeasible. A well-constructed operating agreement can include provisions to ensure that when dissolution of the entity is warranted, it can be obtained on the terms agreed before the dispute arose. There is an old saying that if you don’t care where you are going any road will take you there. If you want to stay on the road of business success, then it is important that you have appropriate written governance documents as your roadmap to get there. Those documents need the expertise of a seasoned transactional lawyer. If you don’t pick that path, let me introduce you to my law partner, the litigator . . . . If you have any questions regarding the issues discussed above or if you have any other Corporate & Business Law or Litigation concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Steven Gersz or Thomas Knab, the authors of this piece, here or by phone at (585) 258-2817 for Steven or (716) 847-9104 for Thomas.

As COVID-19 numbers rise in New York, Governor Cuomo has landed another blow to gyms, bars, and restaurants trying to stay afloat in this unprecedented time. Late last week, Cuomo limited the number of people allowed to dine at the same table to 4. Yesterday, the Governor announced that all bars, restaurants, and gyms across New York State must close by 10:00p.m., except for operating takeout and delivery services, which cannot include alcohol. The new directive includes all establishments with a New York State liquor license, including bowling alleys and the like. The rules take effect Friday, November 13 until further notice. Cuomo has hinted that if these restrictions aren’t effective in curbing the spread of the disease, he will take further steps, likely to include first the reduction, and possibly the cessation, of all indoor dining at bars and restaurants. Cuomo stated: “if that doesn’t work, if the numbers keep going crazy…you will go back to a closedown.” Cuomo said the local governments are in charge of enforcement. Restaurant and bar owners are understandably upset, asking the Governor to provide actual data to the public, through contact tracing, that dining in a restaurant has contributed to the increased infection rate. Cuomo said, “if you look at where the cases are coming from, if you do the contact tracing, you’ll see they’re [the increase in COVID cases] are coming from three main areas: establishments where alcohol is served, gyms, and indoor gatherings at private homes.” Cuomo acknowledged, “it’s been hard on everyone and it’s been hardest on those families who have lost a loved one. Losing money hurts, but losing a loved one lasts forever. The restaurant industry continues to keep a close watch on the federal government with the hopes that another stimulus package will pass, and that it will include a revitalization fund that would provide significant help to independent restaurants and bars with fewer than 20 locations. Members of the national trade group Independent Restaurant Coalition, said 85% of establishments could permanently close by the end of the year without federal relief. These latest restrictions impact establishment owners, employees and suppliers whose livelihoods depend on the hospitality industry. It is estimated that local independent restaurants employ over 11 million people across the country and indirectly support 5 million more in the supply chain. If you have any questions regarding the issues discussed above or if you have any other Labor & Employment Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Jennifer Shoemaker, the author of this piece, here or at (585) 258-2825.

In addition to Margaret Somerset, this post was authored with input from Colin Ramsey. We are 8 months into the COVID-19 pandemic, and it is taking its toll on everyone. We are all tired of being careful. And we are all fearful of not being careful enough. Nowhere is this more evident than in our long-term care facilities. Statistically, the elders in long term care have been at highest risk for death from COVID-19[1]. According to the Centers for Disease Control (“CDC”), while residents of long-term care represent 0.6% of the US population, in the first four months of the pandemic, they accounted for 42% of the deaths from COVID-19.[2] In New York State, there are reports that between 5,600 and 7,000 of the 33,000 deaths have been residents in long term care. [3] Experience shows that once Covid-19 enters a long-term care facility, the infection and death rate mount so quickly that it is difficult to reverse. [4] In fifteen states, at least half of the deaths from COVID-19 are linked to nursing homes. [5] To gain some semblance of control in our nursing homes, both the CDC and the New York State Department of Health (NYSDOH) instituted mandatory guidelines to cease all outside visitation, isolate symptomatic or exposed residents to their rooms, cancel group activities, halt all shared therapy rooms and discontinue communal meals.[6] It is very had to find statistical evidence that this strategy is working - although the New York Governor argues that the percentage of nursing home deaths due to COVID-19 across New York dropped from 42% in March to 20% in August. [7] But, the mortality risk of COVID-19 in long-term care settings made prevention and eradication of paramount importance. It is reasonable to think that protecting elders from the virus was more important than the short-term risks of isolation. The prohibition against visitors is cited as the “most disruptive” to elders.[8] New studies and statistics are starting to show that the adverse effects of loneliness among the elders whom we sought to protect are also placing their lives at risk.[9] Many elders in long term care have a baseline of dementia, memory loss or confusion. These elders have not been able to understand why their family does not visit anymore. They miss the physical touch that comes with the compassion of loved ones. They are showing signs of depression without the intellectual stimulation that comes from sharing time with others. Even before the Covid-19 crises, nursing homes worked hard to combat the “three plagues of nursing homes, loneliness, helplessness and boredom.”[10] For example, in Rochester, New York, the St. Ann’s Nursing Home partnered with Bishop Kearney High School to secure a grant to bring new technology to both the nursing home and the high school students where the students served as tutors to the elders to “teach everything from internet safety and shopping online to Facebook, . . . [and] texting the grandchildren.”[11] The Jewish Home of Rochester developed an app that enabled a resident’s family to interface more closely with the elder.[12] The new technology included the addition of QR codes placed at points of interest around the campus as a means to share photos between family members and residents to spur conversations.[13] It is well-established that social isolation is a serious health risk which can increase the mortality.[14] Loneliness has been found to cause anxiety, depression, sleep disturbances, heart disease, cognitive decline and even premature death from cardiovascular impairment, metabolic disorders, stroke and heart attack.[15] Loneliness is associated with as much as a 30% increase in early mortality.[16] Many families have seen the deterioration of their loved ones over the course of the pandemic. Social isolation is even being listed as a cause or contributing factor on death certificates. [17] The dedicated staff in long-term care have tried very hard to replace the missing stimulation and human compassion for these elders. During the pandemic, there have been heartwarming stories of staff reading, singing, and playing instruments for residents, games of hallway bingo over the PA system, holiday themed meals, Wow Wednesday food items like “Panda-demic orange chicken bowls[18], virtual tours of Italy and Spain, and lots of Zoom calls arranged with residents’ families.[19] Many facilities like St. Ann’s of Rochester, NY implemented buddy programs linking staff members to one or more residents to provide one to one companionship on a regular basis. They facilitated window visits, updated family regularly and coordinated Zoom calls linking the elders to friends and family. Sometimes the staff would designate particular family members to call first thing in the morning or at the end of the day just to say “good morning” or “good night” to their loved one. The staff describe feeling a great sense of fulfillment in this role, knowing that they have been creating connections to combat the risk of loneliness and depression. It turns out that while isolation and loneliness often go hand in hand, they are not the same thing.[20] Isolation is a function of the number of relationships or human contact that someone has, while loneliness is a function of the quality of those connections. [21] Nursing home staff members are incredibly dedicated to the health of their residents, but they are not family. While a travel themed meal lends diversity to a day, it does not replace the compassion of sharing a dining table with loved ones. A Zoom call cannot include a physical embrace. The unfortunate reality is that there is no easy answer to these unintended consequences. As noted in a recent article in the American Journal of Geriatric Psychiatry, the goal should be to find the least restrictive alternative to achieve effective infection control, to minimize the unintended negative consequences.[22] But this balance is not easy. It is a pass /fail test, which has devastating consequences if the loosened restrictions fail to keep the virus out of the population. Right now, facilities really have no choice but to continue trying to strike the right the balance between necessary infection control and meeting the social needs of their residents by erring on the side of protection. Until we have an effective vaccine that can protect these elders from the risk of death from this silent killer, there will not be a return to “normal” and we cannot fault the facilities for the unintended consequences of their best efforts to save our elders. Please do not hesitate to reach out to Underberg & Kessler attorneys to discuss strategies and temporary solutions to these challenging problems that have demonstrated success at facilities across the country. If you have any questions regarding the issues discussed above or if you have any other Health Care Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Margeret Somorset or Colin Ramsey, the authors of this piece, here or by phone at (585) 919-0680 for Margaret or (716) 847-9103 for Colin. [1] Nursing Homes & Assisted Living Facilities Account for 42% of COVID-19 Deaths, Gregg Girvan and Avik Roy, FREOPP, May 7, 2020, updated August 31, 2020. [2] The Most important Coronavirus Statistic: 42% of U.S. Deaths Are From 0.6% of The Population, Avik Roy, The Apothecary, May 26, 2020. [3] https://www.health.ny.gov/statistics/diseases/covid-19/fatalities_nursing_home_acf.pdf; How many nursing home residents died of COVID in New York? What we know (and don't know), David Robinson, LOHUD., August 7, 2020, Updated August 11, 2020. [4] Care Homes Across Globe in Spotlight over Covid-19 Death Rates, Kate Connolly, The Guardian, April 9, 2020; The Coronavirus Is Killing Too Many Nursing Home Residents, Tyson Belanger, MD, The New York Times, May 3, 2020; New York Identifies Every Nursing Home With Covid-19 Deaths, Mike McAndrew, The Buffalo News, May5, 2020; The Whole Place is Sick Now: 72 Deaths at a Home for U.S. Veterans, Tracey Tully, The New York Times, May 10, 2020. [5]About 38% of US Coronavirus Deaths Are Linked to Nursing Homes, New York Times October 20, 2020. [6] Coronavirus Disease 2019 (COID-19) Infection Control for Nursing Homes, CDC June 25, 2020 https://www.cdc.gov/coronavirus/2019-nCoV/index.html Loneliness and Isolation in Long-term Care and the Covid-19 Pandemic, Joyce Simard, MSW, Ladislav Volicer, MD, PhD, JAMDA https://www.jamda.com/article/S1525-8610(20)30373-X/fulltext [7] New York’s True Nursing Home Death Toll Cloaked in Secrecy, Bernard Condon, Matt Sedensky and Meghan Hoyer, AP News, August 11, 2020, https://apnews.com/article/ap-top-news-understanding-the-outbreak-new-york-andrew-cuomo-health-212ccd87924b6906053703a00514647f [8] Visiting Restrictions for Senior Facilities Likely to Last for Some Time, Patti, Singer, Rochester Business Journal, November 4, 2020 [9] Is Extended Isolation Killing Older Adults in Long Term Care?, Emily Paulin, AARP Family Caregiving Medical, September 3, 2020 [10] Technology Deployed to Keep seniors in Touch with Outside World, Gino Fanelli, Rochester Business Journal, January 25, 2019 [11] Id. [12] Id. [13] Id. [14] http://workplacementalhealth.org/Mental-Health-Topics/Loneliness [15] For Nursing Home Residents, COVID-19 Sparks an Epidemic of Loneliness, Elissa Lee, USC Annenberg, Center for Health Journalism, August 13, 2020; https://www.npr.org/sections/health-shots/2020/05/11/853308193/in-together-former-surgeon-general-writes-about-importance-of-human-connection [16] Aging Unlonely, The Foundation for Art & healing, https://www.artandhealing.org/aging/ [17] Is Extended Isolation Killing Older Adults in Long Term Care?, Emily Paulin, AARP Family Caregiving Medical, September 3, 2020 [18] Wow Residents with Food Choices, Even When They’re Dining Alone, Cindy Dahl, RDN, NHA, McNight’s Long Term Care News, October 12, 2020, https://www.mcknights.com/blogs/guest-columns/wow-residents-with-food-choices-even-when-theyre-dining-alone/ [19] 23 Activities for Seniors Who Are Social Distancing, Claire Samuels, A Place for Mom, May, 2, 2020; 59 Activities for the Elderly in Lockdown or Isolation, www.goldencareers.com; Senior Community Activity Ideas During COVID-19 Quarantines, https://www.welbi.co/ [20] For Nursing Home Residents, COVID-19 Sparks an Epidemic of Loneliness, Elissa Lee, USC Annenberg, Center for Health Journalism, August 13, 2020 [21] For Nursing Home Residents, COVID-19 Sparks an Epidemic of Loneliness, Elissa Lee, USC Annenberg, Center for Health Journalism, August 13, 2020 [22] American Journal of Geriatric Psychology www.ncbi.nlm.nih.gov/pmc/articles/PMC7196899/

Katherine T. McCarley has joined Underberg & Kessler LLP as a law clerk in our Rochester, New York office. She's currently assisting the litigation practice group. She earned her B.A. magna cum laude, in English and Psychology from Canisius College, and her J.D. from University of Buffalo, School of Law in 2020. Katherine sat for the New York State bar exam in October, 2020 and is awaiting results. While attending law school, she served as Secretary to the Black Law Students Association and placed 4th in UB’s Annual Negotiation in Mediation Competition. Katherine was also a 2018 and 2019 Summer Associate with Underberg & Kessler. You can learn more about Katherine here. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Underberg & Kessler LLP has been named a 2021 Rochester Tier 1 “Best Law Firm” by U.S. News - Best Lawyers®. The firm’s work in municipal law, closely held companies and family business law, and real estate law has been recognized in the top tier rankings of Rochester law firms. The “Best Law Firms” are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving inclusion in this list signals a unique combination of quality law practice and breadth of legal expertise. The U.S. News – Best Lawyers® “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process. Underberg & Kessler LLP is a full-service law firm with offices in Rochester, Buffalo, Canandaigua, and Geneseo, New York. The firm has been serving its business and individual clients for more than 100 years with practice groups in banking & finance, business & corporate, construction, creditors’ rights, environmental, estates & trusts, family law, health care, intellectual property, labor & employment, litigation, municipal, real estate and tax. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Effective Wednesday November 4, 2020, travelers to New York State from non-contiguous “hot spot” states that have been deemed restricted by New York’s Department of Health (“DOH”) because of COVID-19 outbreaks, will have a way to utilize testing to avoid the mandatory 14-day quarantine. Essential workers have already had such an exception to the 14-day quarantine allowing them to work and will continue to now if: They seek a COVID-19 diagnostic test within 24 hours of arrival back in New York; They monitor their temperature/symptoms, wear a face mask, maintain social distancing, clean and disinfect workspaces for 14 days; and To the extent possible, avoid extended periods in public, contact with strangers and large congregate setting for 14 days. Travelers to New York who are not essential workers can now avoid the 14-day quarantine by: Seeking COVID-19 diagnostic testing within 72 hours prior to departure from the restricted state; and Upon arrival in New York, quarantine as per DOH guidelines for 3 days and on day 4 seek a diagnostic test in NY and exit quarantine upon negative result. No one, whether an essential worker or not, needs an exemption from the 14-day quarantine if the travel is from a state contiguous to New York. All travelers, however, will be required to fill out a Traveler Health Form if they arrive in New York through an airport. For employees who had to quarantine and miss work under the previous COVID-19 regulations because of a voluntary trip to a restricted state, they were not eligible to be paid New York State COVID-19 sick pay. There is nothing in the new policy about New York State COVID-19 sick pay, and there is particular interest in whether workdays missed waiting for test results will be treated differently from those missed for actual quarantine. We await any guidance on that from the Governor’s office or the DOH. Separately, emergency paid sick leave under the federal Families First Coronavirus Relief Act (“FFCRA”) does not have an exception for voluntary travel, so employers subject to that statute will have to provide it (though the FFCRA does provide refundable tax credits for the payments). If you have any questions regarding the issues discussed above or if you have any other Labor & Employment Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Paul Keneally, the author of this piece, here or at (585) 258-2882.

This article was published in The Daily Record on October 19, 2020 - Download the Reprint With the Presidential election less than three weeks out and the pandemic hitting the State, questions about energy policy and fracking are popping up in various ways. Although it has been a few years since this column has addressed fracking or hydraulic fracturing in New York, a means of oil and natural gas development, the practice has been widely used in other states. Notably, our neighbor Pennsylvania has tapped into the Marcellus Shale formation to produce natural gas and create thousands of industry jobs, spin-off industry and economic activity. The fracking boom has also benefitted Ohio, West Virginia and midwestern states like the Dakotas. Hydraulic fracturing is a method of obtaining oil and natural gas from shale rock in which drillers bore deep wells to reach the shale and then directionally drill laterally to open veins of shale containing the resources. After drilling, well production crews inject water and sand mixtures to create fractures in the shale formations. Fracking has raised concerns based on the chemicals used in the well development process, as well as the large quantities of fracking water that needs to be recycled from the process. The potential for spills, discharges or improper recycling has raised concerns from various opponents of the practice. In simple economic terms, fracking has lead to a boom in oil and natural gas development in the last decade or so, to the extent that the United States has become the largest oil and gas producer in the world. This has lead to record low energy prices and the ability for the country to export rather than import resources. A recent Wall Street Journal article notes that since 2018 nearly 90% of the oil and gas drilling projects have been horizontal drilling to support fracking, rather than traditional vertical drilling. Hence, any significant change to fracking regulation will dramatically impact energy development and access to oil and natural gas. New York effectively shut down fracking in the State based on NYS Department of Environmental Conservation environmental impact review in 2015. The economic impacts are still being felt. Pennsylvania’s Marcellus Shale natural gas development has virtually exploded fr om around 3 trillion cubic feet in 2013 to 6.2 trillion cubic feet in 2018. As a result, our neighbor state produces about one-fifth of the nation’s natural gas and has seen substantial new economic development, as well as well-head impact fees which benefit local communities. In contrast, according to an Institute for Energy Research report New York produces less than one percent of the natural gas that it consumes forcing the import of the majority of the gas for consumption. Since the State cut off hydraulic fracturing in the Marcellus it eliminated access to 12 million acres of natural gas resources. Consequently, according to an Energy Information Administration review of New York natural gas consumption, in 2018 of $10.77 billion in gas purchased, $10.67 billion was imported from outside the State. The 2020 COVID-19 pandemic has dramatically impacted the State budget and lead to an estimated $14 billion budget gap. Although circumstances would seem to call for an evaluation of all potential economic development and revenue sources, that has not been the case. As part of the 2021 NYS Budget Governor Cuomo included legislation which permanently banned fracking. The Governor’s press release suggested that since banning fracking in 2015 areas of the Southern Tier, where the Marcellus Shale would have been developed, have instead experienced a clean energy boom of some 4,100 jobs since 2017. Unfortunately, this strict adherence to a clean energy agenda in Albany ignores the fact that New York sends billions out of the State to purchase natural gas that is accessible within its own boundaries. Further, the fracking ban prevents the development of industry and spinoff jobs, support services and local economic development across much of New York. On the national level, fracking has been mentioned numerous times on the Presidential campaign trail and at debates. The Trump administration has implemented a market-based approach to energy policy, encouraging sound development of energy resources across the country. The expansion of United States oil and natural gas resources has lead to a boom in the industry, job growth and reduction in energy prices. The President has also pointed to a substantial decrease in oil and gas imports as a key means to strengthen the economy and maintain independence from foreign sources. Hence, the Trump Administration does not support a ban on fracking to obtain oil and natural gas resources. Vice-President Biden has been a bit more nuanced in his position on fracking and energy development. In general, his campaign position has called for a limited ban on fracking, on federally controlled lands, suggesting this is an initial step to reduce production and address climate change concerns. Further, while on the campaign trail in Pennsylvania in recent weeks, he has argued that he will not ban fracking. While a political season certainly brings campaigns to take liberties with positions, this recent position seems to be at odds with his policy and prior statements. The Biden campaign website states that “the Green New Deal is a crucial framework for meeting the climate challenges we face.” Among other things, the Biden plan intends to “[e]nsure that the US achieves a 100% clean energy economy and reaches net-zero emissions no later than 2050.” Further, when pressed on the issue of fracking in a March 2020 Democratic Presidential candidate debate, Vice-President Biden agreed with Senator Bernie Sanders opposition to fracking, saying “[n]o more, no new fracking.” If Vice-President Biden wins the election in November and proceeds to implement his energy plan, along the lines of the Green New Deal, it has the potential to dramatically impact the nation’s energy landscape. First, due to the overwhelming percentage of hydraulic fracturing wells developed a ban on the practice would effectively shutter the oil and natural gas industry. This would cause a significant loss of industry jobs, ancillary support services and jobs, as well as local development supporting the fracking process. In addition, regardless of the intent to transition to a fossil-fuel free energy plan in the long-term, in the near term it would naturally cause the country to shift to other sources of oil and natural gas, likely from other nations. This would cause consumers to bear higher energy prices as well as the risk of market sources outside of the country. Regardless of one’s perspective on the Presidential candidates, the policy choices on energy use and development are in stark contrast. While President Trump is interested in maintaining fracking for oil and natural gas, Vice-President Biden is likely to restrict the practice in significant ways. With one debate left, perhaps the moderator can ask substantive questions so voters can get a clear understanding of the differences that exist in this critical energy area. For additional information about the issues discussed above, or if you have any other Environmental Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or George S. Van Nest , the author of this piece, here or at (716) 847-9105.

New York State has created a website and issued FAQs to assist NY employers and employees in the implementation and usage of its new paid sick leave law. As we’ve previously discussed , this new law applies to almost all private employers in the state. More FAQs are expected as some questions remain regarding the new law. Sick leave balances may be accrued or frontloaded, and for now, it appears employers may use a hybrid method depending on the situation. Of course, any employer choosing to go with a hybrid method must ensure there is no discriminatory intent or impact in its implementation. The guidance states that if an employer’s existing policies meet or exceed the requirements in the new law, including carryover and use requirements, then the employer need not change its policies. Specifically, it states, “the law does not present any further obligations on that employer.” It appears for now that if an employer provides more than required under the law, the employee will not be limited as far as its usage. In other words, the employer will not have to require that the employee “save” time to be used solely as sick time. We will update our blog if the proposed regulations indicate otherwise. For now, we recommend that whenever possible, an employer that decides to maintain a PTO style time off policy make best efforts to track whether time off is taken for sick time until New York State provides more clarity on this issue. This is also important to ensure an employer is complying with the law’s sick leave carryover requirements. Employees may request a summary of their sick time accrued and used in a current or past calendar year, and employers have three days to comply. Tread carefully, however. The new paid sick leave law provides that sick time can be used to due to the employee’s sickness or to care for a family member (and the definition provided is quite broad), but that the employer cannot demand confidential health information to verify the need to take sick leave. More FAQs are expected in the near future. In addition, proposed regulations should soon be released. There will be a comment period during which the public can voice any concerns about particular aspects of the proposed regulations. We will post a link to those proposed regulations when they become available. The guidance available thus far can be found here . If you have any questions regarding the issues discussed above or if you have any other Labor & Employment Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Alina Nadir , the author of this piece, here or at (585) 258-2805.

This article was published in The Daily Record on September 22, 2020 - Download the Reprint “Do. Or do not.” - Yoda In most corporate acquisitions and commercial real estate purchase transactions, the buyer contracts for the right to conduct due diligence. In a corporate acquisition, due diligence involves the buyer’s comprehensive appraisal of the business being purchased, to establish its assets and liabilities and the accuracy and completeness of the seller’s financial information. In a commercial real estate transaction, the buyer must thoroughly inspect the fundamentals of the property in order to reduce or mitigate financial uncertainties, and the buyer’s lender will require an encompassing due diligence process to ensure that the property that will serve as collateral for the loan justifies the amount of financing sought. A prospective buyer of commercial real estate can perform due diligence before signing a contract, but it is often the better practice to include due diligence provisions in the purchase contract, because the seller is then contractually obligated to provide specified information and give the buyer physical access to the property. A seller’s failure to provide that information or allow that access would give the buyer grounds to terminate the contract. Moreover, due diligence provisions usually give the buyer the right to terminate the contract without liability (and recover its deposit) if the due diligence process generates negative information about the property. At minimum, the seller could seek to negotiate a reduction in the purchase price based on any such negative information. From the seller’s perspective, the existence of a buyer’s contractual right to conduct due diligence as to the physical condition and appraised fair market value of the property should relieve the seller from having to give any warranty as to the property’s physical condition or its economic viability. Typical due diligence provisions in commercial real estate contracts require the seller to deliver to the buyer documents such as: contracts, leases, rental agreements and other agreements related to the property; prior engineering reports, environmental reports and appraisals; and instruments concerning easements, rights of way and other restrictions on or interests in the property. Most due diligence provisions also give the buyer a certain amount of time to complete its physical inspections and any other due diligence it may wish to perform, including but not limited to environmental and other engineering inspections, studies and investigations, and appraisals. They also require that the seller give the buyer access to the property to conduct an appraisal and any environmental, engineering and structural studies and investigations. Once the seller contracts to allow due diligence, the buyer has sole control over decisions about what property inspections and other financial analyses, investigations or appraisals will be done, and, ultimately, whether the transaction will go forward. For example, during due diligence on the sale of commercial rental property, the seller must effectively “open its books” and its property to the buyer; any denial of specified information or physical access to the property by the seller would raise a red flag that could well justify the buyer’s cancellation of the contract. At the same time, a buyer’s contractual right to conduct due diligence provides substantial protection to the seller in the event the buyer develops post-closing remorse and sues to try to recover on fabricated damage claims based on alleged problems with the property. New York retains the doctrine of caveat emptor, which imposes no liability on a seller for failing to disclose information regarding the property when the parties deal at arm’s length, unless there is some conduct on the part of the seller which constitutes active concealment; mere silence alone is not actionable. In addressing, and dismissing, claims of breach of contract or fraudulent inducement arising from real property transactions, the New York Courts regularly hold that claims of misrepresentation will not lie if the representation allegedly relied upon by the buyer was not a matter within the peculiar knowledge of the seller, and could have been discovered by the buyer through the exercise of due diligence. When a buyer has a contractual right to conduct due diligence, but fails to exercise that right in whole or in part, it cannot establish justifiable reliance on any alleged representation by the seller. Moreover, when the buyer is given access to the property and performs property condition assessments, environmental investigations and similar inspections as part of its due diligence, and then proceeds to a closing, the seller may not claim justifiable reliance on any oral representation of the seller concerning the physical condition of the property when that physical condition was not peculiarly within the seller’s knowledge and the buyer had the means available to ascertain the truth or the real quality of those representations. If you have any questions regarding the issues discussed above, or if you have any other Litigation concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Tom Knab, the author of this piece, here or at (716) 847-9104.

The New York State Department of Financial Services (“NYSDFS”) announced on September 1, 2020 the Paid Family Leave (“PFL”) benefit and contribution amounts to take effect on January 1, 2021. While these amounts were previously published, the NYSDFS could have delayed their implementation if it so desired. The new weekly paid family leave benefit amount will be up to 67% of the New York State average weekly wage for 2021 ($1,450.17), a maximum of $971.61, up from the current $840.70. Assuming a PFL-qualifying reason (discussed below), the benefits will last for as much as 12 weeks, up from the current 10 weeks. New York State states the following reasons qualify for paid family leave: Bonding with a newly born, adopted or fostered child Caring for a family member with a serious health condition Assisting loved ones when a spouse, domestic partner, child or parent is deployed abroad on active military service. You can see more about NYS’s PFL program on their website. The employee contribution rate shall increase from the current 0.27% of wages per pay period to 0.511% of wages per pay period, up to a maximum of $385.34 per year. This contribution rate for 2021 includes a 0.005% risk adjustment for the payment of COVID-19 claims. If you have any questions regarding these new amounts, PFL eligibility or the concurrent running of PFL and federal Paid Family and Medical Leave (“FMLA”), or if you have any other Labor & Employment Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Paul Keneally, the author of this piece, here or at (585) 258-2882.

The Office of Civil Rights of the U.S. Department of Health and Human Services (OCR) is charged with the enforcement of the Health Insurance Portability and Accountability Act (HIPAA). On August 26th 2020, the OCR issued an advisory to assist providers in the avoidance of HIPAA violations. HIPAA contains two parts – the Privacy Rule and the Security Rule. Most of the focus of healthcare providers (“covered entities” in HIPAA parlance) is on the Privacy Rule. However, covered entities are responsible for assuring compliance with the Security Rule as well. Many covered entities employ a variety of devices to access electronic protected health information (ePHI) of patients. Often these devices cache user names and passwords, and may also download files that have been stored for reading on the device when the device may be offline. A physician may use his or her tablet while making rounds, a desktop PC in the office and a smartphone while on the go. Files may also be stored on thumb drives. Each of these devices is a potential point of breach, through hacking, theft or loss. Under HIPAA, covered entities are required to make periodic assessments of their risk of violating both the Privacy and the Security Rules. OCR’s advisory suggests conducting an inventory of devices and servers (owned by the covered entity or by its business associates such as billing services and EHR providers) that contain or have the ability to access ePHI as a way to reduce the risk of HIPAA violations. For additional information about the issues discussed above, or if you have any other Health Care Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Helen Zamboni, the author of this piece, here or at (585) 258-2844.

Question: I am a provider acutely aware that the physician life cycle has been altered by the coronavirus pandemic. What strategies can physician practices employ to weather the financial storm associated with the pandemic? Answer: In the last few years, mergers and acquisitions, value-based care, and industry consolidation has made durability of the physician practice challenging. But the COVID-19 pandemic greatly threatens it’s survival. Since being declared a public health crisis in early 2020, the highly contagious novel coronavirus has upended operations for the entire health care industry. Hospitals had to build up staff, capacity, and essential supplies to treat the anticipated surge in infected patients. While physician practices had to cancel or postpone many procedures and services that keep people healthy and subsequently generate revenue. People have stopped seeking primary care out of fear of exposure, which has led to a loss in physician practice revenue. As a result of decreased patient volume and related revenue-generating services, physicians have suffered reduced hours, compensation, and some have been furloughed. Experts agree that the coronavirus will not disappear soon, so it is critical that physician practices find new ways to connect with their patients while also generating revenue. The shift to telehealth systems during the pandemic has been one way for providers to keep afloat. But telehealth alone is not enough to save the industry. Other strategies physician practices can employ include: limit spending to practice enhancements related to the COVID-19 pandemic, such as PPE, physical barriers or partitions, or upgraded air filtration systems; institute safety measures for patients and employees; and collaborate with local community partners. Sharing resources such as PPE, staff, training and education and best practices, across a community will lessen the burden on individual practices. Also, unique legal issues will arise. Consider new legal implications in the areas of privacy, confidentiality, and employment obligations. It is important to review policies and procedures in place and consider updating them in response to the pandemic. Physician practices are experiencing tremendous negative financial impact from the coronavirus pandemic. As coronavirus continues to evolve, practices should employ strategies now to better prepare for the uncertainties ahead. For additional information regarding new legal implications related to the pandemic, contact your attorney. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.