In case you missed our joint webinar with the Canandaigua Chamber of Commerce, our very own Serena Compitello answered questions regarding the Enforcability of Contracts during the current COVID-19 pandemic. Serena touches on the force majuere clauses of contracts and some of the various nuances to be aware of. You can watch the conversation between Serena and Ethan Fogg, President & CEO, Canandaigua Chamber of Commerce below: 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.

Effective June 25, 2020, New York State Governor Cuomo’s Executive Order 205 (“Order”) went into effect requiring that those who have spent more than 24 hours in a COVID-19 “hot spot” or “restricted” state must quarantine for 14 days after traveling to New York. The New York State Department of Health has been continuing to update the list of restricted states, and penalties for violating the Order can range up to $10,000.00. Quarantine means staying in particular separated quarters at home, having food delivered to those quarters and monitoring temperature/symptoms from home. Naturally, employers were immediately anxious about their ability to have sufficient staff and the possible cost of the Order. Neither of those issues should be a problem for essential businesses (as per the original Empire State Development Corporation list, which can be found in one of our previous posts), as their employees may continue to work at the worksite and avoid the quarantine obligation if: They get a diagnostic test within 24 hours; Monitor temperature, socially distance, wear face coverings, maintain clean work area for 14 days; Avoid extended periods in public, contact with strangers and avoid large gatherings for 7 days. Separately, even non-essential employees may continue to work if they are able to do so from home. As for non-essential employees who cannot work from home, employers have immediately questioned whether these employees will not only have to be temporarily replaced but also paid. That answer is clearly no under the New York COVID paid sick law, as the Governor issued an additional Executive Order to that effect on June 27, 2020, as long as the employees are provided notice of same prior to the voluntary travel. However, under the federal FFCRA, such quarantine time does appear to qualify for COVID paid sick leave, as that law does not contain any exception for voluntarily becoming subject to an order of quarantine. Employers paying FFCRA COVID paid sick leave to employees are eligible for tax credits so should consult with their accountants. Notably, the FFCRA does not apply to employers with more than 500 employees, provides an exception for health care provider and emergency responder employers and expires on December 31, 2020. (FFCRA COVID paid family leave would not come into play from the travel quarantine, as that only applies to childcare.) Given all of the above, some employers have wondered whether they can simply ban such voluntary travel to a restricted state. Given New York’s Lawful Activities law, which prohibits employers from discriminating against employees engaged in lawful recreational activities, it is unlikely such a ban would be permitted if challenged by an employee. It certainly is wise for employers to ask employees to notify them of such travel, and it would be lawful to ask employees to re-consider the timing of any such trip. Obviously, these are complicated times raising complicated employment law issues, so please do not hesitate to contact us anytime with questions. 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.

The Paycheck Protection Program Flexibility Act (the “PPPFA” or the “Act”) was signed into law on June 5, 2020. As the name suggests, this Act provides greater flexibility to the existing Paycheck Protection Program (“PPP”), created under the CARES Act. The PPP provides fully forgivable loans to certain eligible small businesses in response to the impact of COVID-19. Under the CARES Act, the amounts of loan forgiveness is reduced if, during certain periods: The loan proceeds are used for non-qualifying expenses, or Less than 75% of the loan proceeds are spent on payroll costs, or The borrower does not maintain or restore its full-time equivalent employees to its pre-COVID-19 period numbers, or The salary and wages of certain employees are reduced by more than 25%. Recognizing that the CARES Act loan forgiveness requirements required many borrowers to rehire employees and use loan proceeds before their businesses opened or their business activities were restored, the PPPFA made the following changes: Eligible Expenses The Act decreases the amount of the loan required to be spent on payroll costs from 75% to 60%, permitting up to 40% of the loan proceeds to be used for mortgage payments, rent, interest and utilities. Payroll costs include: Salary, wages, commissions and tips (up to $100,000 annualized per employee) Employee benefits, including paid leave, insurance premiums and retirement benefits State and local taxes withheld Payroll costs for independent contracts and sole proprietors (also up to $100,000 annualized) Extension of Covered Period The term “covered period” now means the period beginning on the date of the origination of the loan and ending on the earlier of 24 weeks after date of origination or December 31, 2020. This change gives borrowers 24 weeks, instead of the original 8 weeks, to spend the loan proceeds on qualifying expenses and qualify for full forgiveness. The Act permits borrowers to elect to apply the original 8 week covered period, beginning on the date of the loan’s disbursement, originally set forth in the CARES Act. Additionally, borrowers now have until December 31, 2020 to restore their pre-COVID period full-time employee levels. Exemption Based on Unavailability of Employees Loan forgiveness will not be reduced for borrowers that have a decrease in full-time equivalent employees as compared to pre-COVID-19 periods, if such borrowers are able to document their inability to rehire individuals who were employees prior to February 15, 2020 and their inability to hire similarly qualified employees for unfilled positions. Similarly, borrowers will not be subject to reduced loan forgiveness if they are able to documents an inability to return to the same level of business activity as the business was operating at before February 15, 2020, due to compliance requirements or guidance established by the CDC, HHS, or OSHA between March and December, 2020, relating to sanitation, social distancing or other safety requirements. Loan Term For PPP loans disbursed after the date of the Act, the term of the loans for amounts not forgiven is extended from 2 years to 5 years. Existing PPP loans remain at 2 year terms, but borrowers and lenders may mutually agree to modify the maturity terms of these loans. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

REGISTER HERE The Finger Lakes region entered Phase II of reopening Friday, May 29th. The Western New York region of New York State is slated to begin Phase II of reopening tomorrow, June 2nd. This means that many more employees will soon be returning to their offices, and with that comes risk of legal exposure. Join our attorneys to discuss potential liabilities you could face, and how to be compliant. During this webinar, hosted by the Canandaigua Chamber of Commerce, attorneys Paul F. Keneally and Jennifer A. Shoemaker from Underberg & Kessler’s Labor & Employment practice group will go into detail regarding what employers need to be aware of regarding their liabilities as employees begin to return to work on-site. There are several items businesses must be compliant with, and they will go over them in detail. There will be a Q&A after the presentation. The webinar is free to attend, but registration is required. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

This article was published in The Daily Record on May 18, 2020 - Download the Reprint In our March 23 and March 27, 2020 legal alerts, we discussed how businesses can protect their contract rights and position themselves to prosecute and defend commercial and contract claims that arise during, and as a result of, the ongoing business disruption caused by the COVID-19 pandemic. In particular, we highlighted the need for businesses to understand and assert their contract rights, such as the obligations to give, and respond to, notices of breach, and the role that force majeure and related legal defenses will play in the litigation of those claims. Underberg & Kessler, like the New York legal industry as a whole, is predicting and preparing for a surge in commercial litigation once the New York courts allow parties to file new cases. But not all courts are closed, and last week a lawsuit was filed in Delaware state court that provides a good example of how parties will approach contract litigation flowing from the impact of the government’s stay-at-home directives. The case, SP VS Buyer LP v. L Brands, Inc., was brought by the prospective buyer of a controlling interest in the Victoria’s Secret clothing business. The parties signed the Transaction Agreement on February 20, 2020, after the public became aware of COVID-19, but before the government began to impose guidelines restricting business operations in order to combat the spread of the virus. On April 22, 2020, the buyer terminated the Transaction Agreement, and then filed its lawsuit asking the court to declare that the termination was valid under that contract. The complaint explains that because it was offering to pay $525 million to acquire a controlling stake in a global business, the buyer negotiated for a detailed set of obligations imposed on the seller with respect to the conduct of the Victoria’s Secret business between the signing and the closing. Among the several seller’s representations, warranties and covenants in the Transaction Agreement cited in the complaint, the seller covenanted that it would continue to conduct the Victoria’s Secret business “in the ordinary course consistent with past practice.” However, the complaint goes on to say, less than a month after the signing, the seller closed all of the approximately 1,600 Victoria’s Secret and PINK stores, and then “voluntarily” (and without the buyer’s consent): furloughed most of its employees, reduced by 20% the base compensation of its senior management and deferred their annual merits increases, drastically reduced new merchandise receipts, failed to dispose of obsolete and excess merchandise, and failed to pay rent for its US retail stores. The complaint asserts that these actions materially breached the Transaction Agreement and caused several of the seller’s representations and warranties “to become false” and incapable of performance at closing. In short, the buyer claims that what remains of the Victoria’s Secret business after the seller’s actions is not what it agreed to purchase. Although the seller has not yet responded to the complaint, we can be certain that it will argue, among other things, that its actions were not voluntary as alleged, but rather necessary to comply with the directives of the governments of the countries in which it operates. Anticipating that response, the complaint asserts that “the current COVID-19 pandemic provides no relief” to the seller. The buyer points out that while the Transaction Agreement contains detailed terms effectively governing the limited circumstances in which the seller’s performance might be excused (including, interestingly enough, the occurrence of a pandemic), other applicable terms foreclosed the seller from using any such excuse. The buyer’s key point is that the Transaction Agreement allocated to the seller essentially all of the risk that a materially adverse event could prevent it from performing its obligations under that contract. In response, the seller will also certainly argue that the buyer’s purported termination was premature, because at the time notice was given, it still expected that it would have been able to meet the conditions of closing. It will be fascinating to see how these legal issues are resolved, but equally instructive is the complaint’s description of how the buyer positioned itself to claim that its termination was valid. On April 2, 2020, the buyer contacted the seller to advise that it had not consented to the seller’s actions (in closing its stores, etc.) and was concerned that the seller would not be able to meet the conditions of closing. That same day, the seller responded that while the pandemic had affected the retail industry of which it was a part, it was not in breach of the Transaction Agreement and expected to be able to meet the closing conditions early in its fiscal second quarter and perhaps as soon as May 2, 2020 (but also confessed to looming problems with one of its lenders). On April 7, 2020, the buyer contacted the seller to advise that it believed that the seller’s actions put it in material breach, and asked for information on how those actions would affect the Victoria’s Secret business to help the buyer determine its next steps related to the contemplated transaction. On April 8, 2020, the seller denied that it was in breach and said it would “evaluate and respond” to the request for information. In the April 13, 2020 communication to the seller, the buyer again alleged material breach, and again pushed the seller to provide the requested information, but this time in connection with “informed negotiation” over a reduction in the purchase price. The seller’s April 14, 2020 response rejected the idea of a reduction in the purchase price, and justified its closing of the stores and other actions as necessary and consistent with the retail industry’s response to COVID-19. Finally, the buyer responded with its April 22, 2020 termination notice. This exchange shows that once the seller took what it felt were necessary actions, the buyer applied consistent pressure on the seller to state its position on the claim of material breach, and provide either assurances that it would be able to perform at closing or an admission that it could not. Perhaps the buyer’s intention from the start of the exchange was to try to maneuver the seller into a concession on the purchase price, but at minimum, the buyer carefully “teed up” the termination option with a solid paper trail intended to ultimately convince a court that its termination was not only permitted by the contract but entirely reasonable. Therefore, this case offers valuable lessons on how a business must address percolating breach of contract disputes -- arising from the pandemic or otherwise -- if it hopes to favorably resolve those disputes, in the re-opened courts or through direct negotiation. 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.

In addition to Paul Keneally, this post was authored with input from Alina Nadir and Jennifer Shoemaker. On Friday May 29, 2020 during his 1:00 P.M. press conference, Governor Cuomo announced that Phase II of the New York Re-opening will begin in some regions, including our Finger Lakes Region. Adding to the essential and Phase I businesses already partially or fully open, additional businesses that will be permitted to operate more freely than before include: Offices Phase II retail Vehicle sales, leasing and rental Retail rental, repair and cleaning Commercial building management Hair salons and barbershops Specific Guidance for each industry can be found here. As before, all NY employers must prepare a Business Re-opening Safety Plan (a template for which can be found through the link above). The Business Re-opening Safety Plan need not be filed with any Government Agency, but must be available for review upon request and a Business Affirmation that the relevant Guidance has been reviewed must be executed and submitted electronically as also described through the link above. The Business Re-opening Safety Plan must identify the relevant industry, contain business Owner/Manager and/or an HR Representative's contact information and address four categories: People-Physical Distancing Places-Protective Equipment/Hygiene and Cleaning/Communication Process-Screening/Contact Tracing and Disinfection of Contaminated Areas Other business-specific issues Six feet of separation is still the benchmark with face coverings to be worn if closer. Face coverings are to be provided by employers if employees do not have thier own. Additional barriers between employees such as interior walls, partition and plastic shields are recommended. Daily cleaning protocols are required. Daily screening is required, but that screening does not have to include temperature-taking or COVID-testing. A process to assist in contact tracing/contaminated area cleaning required. OFFICE-BASED WORK GUIDELINES We will cover the office industry in depth here; other industry guidances are similar but have some key differences. Guidelines are to apply to all business activities in offices newly opening or opened before as essential. Professional service, nonprofit, technology, administrative support, and higher education administration (excluding full campus re-opening) offices are included. These guidelines also apply to the office portions of employers who operate part of their business functions under different guidelines (ex. construction company front office). OFFICE-BASED WORK GUIDELINES MANDATORY PHASE II PROVISIONS PHYSICAL DISTANCING Occupancy is never to exceed 50% of the maximum permitted under the certificate of occupancy There is to be 6 foot distancing, unless safety of the core activity requires a shorter distance Face coverings are to be worn if 6 foot distancing is not maintained at any time. The business is to post social distancing markers Limit meetings to those with an essential status only and with 6 foot distancing. Shared workstations are to cleaned between users Reduce interpersonal contact through adjusted hours/staggered shift times. Keep non-essential common areas closed PROTECTIVE EQUIPMENT Provide workers with face coverings at no cost Face coverings may be homemade sewn, quick cut, a bandana, a surgical mask or face shield Clean, replace and prohibit sharing of face coverings Train workers on use of Personal Protective Equipment (PPE) Require face coverings in common areas Limit sharing of any objects in workplace HYGIENE AND CLEANING Adhere to CDC and NYSDOH requirements and keep a log of same Provide and maintain hand hygiene stations Provide and encourage use of cleaning/disinfection supplies Ensure equipment is regularly cleaned and disinfected Cleaning and disinfecting of the office location, shared services and other areas More frequently clean and disinfect high risk areas Cleaning and disinfecting at least after each shift or more frequently Specific targeted cleaning and disinfecting in the case of an employee having a positive COVID test Prohibit shared food and beverages COMMUNICATION Affirm review of guidelines and that they will be implemented Post signage inside and outside of office location Train all personnel on new protocols Establish a communication plan Provide the building manager a list of essential visitors expected Maintain a continuous log of every person who may have close contact with other individuals at the worksite If a worker or visitor tests positive for COVID, notify state and local health departments and cooperate with applicable contact tracing, while also maintaining confidentiality to extent required by state and federal law Post safety plan onsite SCREENING Sick workers should stay home, or go home if already at work Implement mandatory daily health screening assessment (temperature-taking, COVID-testing each optional) as to symptoms, testing and/or contact with a person who has COVID Coordinate with the building manager as to screening Train on-site screeners as to CDC, DOH and OSHA guidelines, and be sure they wear a face covering Identify a point of contact for workers and visitors Have a plan to handle a positive case as to cleaning, disinfecting, contact tracing OFFICE-BASED WORK GUIDELINES PHASE II RECOMMENDED BEST PRACTICES PHYSICAL DISTANCING Reconfigure workstations and office areas Implement clean desk policies Limit use of shared workstations where feasible Leverage technology to assist in proper office space utilization Use 6 foot circles around workstations and common work areas Reduce bi-directional foot traffic Limit on-site interactions and movements Add desks to spaces previously used for meetings Close non-essential communal areas Stagger worker schedules Consider limiting non-essential travel PROTECTIVE EQUIPMENT Maintain adequate supply of face coverings and other PPE HYGIENE AND CLEANING Avoid use of furniture that isn't easily cleaned or disinfected Increase ventilation of outdoor air into the building where safely possible COMMUNICATION Develop webpages, text and email groups and social media campaigns to provide information to workers, customers and visitors Work with building management on building-wide communications Post signage inside and outside the building regarding the safety plan SCREENING Prevent workers from close contact prior to screening Daily temperature checks are optional Keep a log of every person who may have close contact with other individual to assist with possible contact tracing Screen individuals at or near the entrance Coordinate with building management as to remote screening, if any Consider use of a secondary screening site for possible symptomatic individuals As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

This article was published in The Daily Record on March 25, 2020 - Download the Reprint The Coronavirus Aid, Relief, and Economic Security Act or “CARES Act” passed the House of Representatives today and President Trump has indicated he will sign the legislation immediately. The 883-page bill contains the largest stimulus package in U.S. history with over $2 trillion in aid. Included in the CARES Act is $100 billion for a new program that provides grants to hospitals, public entities, not-for-profits, and other eligible health care providers for health care related expenses or lost revenues related to the coronavirus. An additional $200 million was appropriated to the Centers for Medicare and Medicaid to prevent, prepare and respond to coronavirus, with $100 million specifically designated for nursing homes in localities with community transmission of the disease. Here is a link for further information on the CARES Act related to healthcare. Unfortunately, relief will not be immediate. The Secretary of Health and Human Services must first create regulations and an infrastructure for distribution of grants. We will continue to monitor HHS and provide additional information as it becomes available. The CARES Act includes an alternative and likely quicker path towards relief funds through the $350 billion Paycheck Protection Program. This program provides eight weeks of cash-flow assistance for small businesses, defined as businesses with fewer than 500 employees or applicable SBA standards for the industry. If the employer retains its employees and uses the loan to cover payroll, group health care benefits, employee compensation, interest on debt obligations, rent and/or utilities, the loan will be forgiven. The program is retroactive to February 15, 2020 in the hopes that workers already laid off will be brought back on payroll. The loans will be administered through the Small Business Administration and regulations must be promulgated within 15 days after enactment. We are keeping close track of the daily changes to state and federal law while continuing to work closely with our clients during this unprecedented time. If you have a question about eligibility for CARES Act grants or relief funds, please reach out to your primary contact at Underberg & Kessler. This alert does not purport to be legal advice on specific matters. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

This article was published in The Daily Record on March 2, 2020 - Download the Reprint A construction company submitted a bid to serve as the general contractor for a public/private historic redevelopment project. After being told by the developer that it was the successful bidder, over the next several months the construction company participated in numerous meetings, and exchanged emails, about the project with the developer, prepared necessary project documents, and hired subcontractors. During that same time period, the parties were working to finalize their contract, until a representative of the developer verbally advised the construction company that the contract had been approved and would be signed by the developer. However, the developer never signed the contract and hired a different general contractor for the project. The construction company said: “We had a deal!” and demanded that the developer pay the money damages recoverable under the unsigned contract upon the developer’s “termination for convenience.” The developer characterized the ongoing communications as nothing more than negotiations, and refused the construction company’s demand on the ground that there was no enforceable agreement because it did not sign the contract. The construction company sued to recover its damages. The First Department’s December 3, 2019 decision in Lerner v. Newmark & Co. Real Estate, Inc. provides guidance for the parties on both sides of this dispute. In Lerner, plaintiff real estate broker alleged that he had entered into a two-year Employment Agreement with defendant real estate company that provided for the payment of certain commissions. The Employment Agreement also provided that most of its terms would survive its termination or expiration. Plaintiff sued when, following his departure from the company, defendant refused to pay him his share of commissions on transactions he had handled. Plaintiff alleged claims under the Employment Agreement and under a Termination Agreement, which the Court described as a document that did a little more than confirm the Employment Agreement’s post-termination provisions. Defendant moved to dismiss the causes of action for breach of contract, unjust enrichment and fraud. Supreme Court granted that motion and denied plaintiff’s cross-motion for leave to serve an amended complaint with revised breach of contract and unjust enrichment claims. On appeal, the First Department reversed Supreme Court to the extent that it denied the motion to dismiss as to the breach of contract and unjust enrichment claims, and granted plaintiff’s motion for leave to serve an amended complaint asserting revised versions of those causes of action. In relevant part, defendant had argued that the Termination Agreement was unenforceable because the parties had not signed it. The Court rejected defendant’s argument that the unsigned Termination Agreement could not be enforced, stating that where the evidence supports a finding of an intent to be bound, a contract will be unenforceable for lack of signature only if the parties positively agreed that it should not be binding until reduced to a signed document. The Court compared the Employment Agreement, drafted by defendant, to the Termination Agreement, also drafted by defendant, and noted that while the Employment Agreement contained a provision that made it clear that the agreement would not be enforceable absent the parties’ signatures, the Termination Agreement “did not positively state that the parties could assent only by signing.” The Court referenced the parties’ months-long email exchanges, “during which plaintiff submitted his list of pending transactions, defendant drafted the Termination Agreement and forwarded it to plaintiff, and the parties disagreed about the extent to which transactions listed by plaintiff were covered”, as evidence sufficient to support a finding that the parties intended to be bound by the Termination Agreement notwithstanding their failure to sign it. The Lerner Court cited to the Court of Appeals’ March 29, 2018 decision in Kolchins v. Evolution Markets, Inc. in support of its holding that despite the fact that the Termination Agreement was unsigned, there was sufficient evidence of the parties’ intent to be bound to defeat defendant’s motion to dismiss. Like Lerner, Kolchins dealt with a motion to dismiss breach of contract claims where there was no signed agreement. In that case, plaintiff relied upon a series of emails to support his argument that the parties had reached an agreement, and defendant based its motion to dismiss on the same emails, arguing that they constituted documentary evidence that no agreement had been made. In affirming the denial of defendant’s motion to dismiss, the Court of Appeals made clear that the lack of a signed writing did not preclude a finding that an enforceable contract had been made. The Court stated that where parties disagreed on whether a contract was formed, the issue was whether the course of conduct and communications between the parties had created a legally enforceable agreement. The Court held that under such circumstances, it was necessary to look to the “objective manifestations of the intent of the parties as gathered by their expressed words and deeds.” The Kolchins Court also stated that while the interpretation of a written instrument is a question of law for the court, when a finding of whether an intent to contract is dependent on other evidence from which differing inferences may be drawn, a question of fact arises. The construction company clearly took a risk when it began to work on the project before it had a signed contract in reliance on the developer’s “words and deeds”, but that is often how things go in the real world. Based on Lerner, Kolchins and similar precedent, the construction company’s complaint would likely survive any motion to dismiss the developer might file. But if it wants to recover damages under the “termination for convenience” clause of the unsigned contract, the construction company will ultimately have to prove that the developer intended to be bound even though it never signed that contract. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

This article was published in The Daily Record on April 22, 2020 - Download the Reprint The COVID-19 pandemic has disrupted most business and governmental matters in New York since early March, but in the midst of it, Governor Cuomo succeeded in substantially changing the process for renewable energy siting. In conjunction with his proposed budget in January 2020 Governor Cuomo pushed revisions to siting regulations for electric generation facilities under Article 10 of the Public Service Law (PSL). The Governor signed the Climate Leadership and Community Protection Act (CLCPA) in July 2019 which requires the State to obtain 70% of its electric production from greenhouse gas free sources by 2030 and ultimately 100% by 2040. Since then the Governor has complained about the amount of time it takes to site new renewable energy projects, suggesting that it often takes five to ten years to complete the process. The State currently only gets about 28% of its electricity from renewable sources, and a large portion of it from hydropower sources. Ramping up to hit the 70% threshold mandated under the CLCPA in the next 10 years will be a challenge at best. However, that goal served as the basis to move forward with dramatic changes to the renewable energy siting procedures. Despite the distractions, local health issues and resources dedicated to the COVID-19 response, the Governor and Legislature moved forward with adoption of the Accelerated Renewable Energy Growth and Community Benefit Act as part of the 2020-2021 State budget (the “Accelerated Energy Act”). While the Governor, State agencies, developers and environmental groups are lauding the step, local governments and municipal associations have concerns about the Act and implementation given the dramatic change from the Article 10 process and loss of local input. The Accelerated Energy Act completely restructures the renewable energy process in the following key ways. First, the Office of Renewable Energy Siting is created within the Department of State to consolidate and administer the environmental review of major renewable energy facilities and siting decisions. Among other powers, the Energy Siting Office will: establish regulations and uniform standards to address environmental impacts from large, renewable energy projects and identify mitigation measures; mandate that uniform and site-specific standards and conditions achieve an overall net benefit to endangered or threatened species; authorize DEC to use funds from permitted projects to implement an endangered and threatened species mitigation bank fund; create draft permits, subject to public and local input, to ensure a stream-lined decision on permits, within one year for most projects and six months for former commercial, and brownfield sites. The new Energy Siting Office will address all new construction or expansion for large-scale, renewable energy projects larger than 25 megawatts. Existing projects that are in the initial stages of the Article 10 process may either remain in that process or opt into the new process. In addition, new projects that fall between 20 and 25 megawatts will be able to opt in. A second major component of the Accelerated Energy Act is the creation of a Clean Energy Resources Development and Incentives Program to be administered by the New York State Energy Research and Development Authority (NYSERDA). Under this new program NYSERDA will work with State and local entities to quickly move “Build-Ready” projects, prioritizing the development of active or unused commercial sites, brownfields, landfills and former industrial locations. The program requires NYSDERA to coordinate with the Department of Public Service, and NYS Urban Development Corporation to begin obtaining site control and pre-construction development activities such as siting, feasibility assessments, design, planning and related activities to create Build-Ready sites. Further, after the sites are completely permitted and developed NYSERDA will auction the renewable sites, along with contracts for renewable energy payments to private developers. This envisions that NYSERDA will be able to collaborate with State and local agency partners to quickly develop these sites and provide risk-free options for private developers. In addition, NYSERDA is slated to develop a Host Community Benefit Program as a component of the Build-Ready program to offer property owners and local communities benefits and incentives for hosting a renewable energy facilities. While host community agreements have been part of the Article 10 process as communities work with developers to advance projects, under the Accelerated Energy Act the loss of local input and control of siting is supposed to be offset by the benefit program. Aside from the host community benefits, the Public Service Commission is supposed to provide utility bill discounts and environmental benefits or compensation for residents of locations that host a facility. NYSERDA will also administer a local intervenor fund to address participation by local governments and community intervenors in the new process. The third major element of the Accelerated Energy Act is the creation of a State Power Grid and Study Program to speed planning and development of bulk and local transmission and distribution infrastructure to aid distribution of renewable energy. Among other components, the program will require the Department of Public Service to consult with State and local power agencies, utilities and grid operators to analyze and develop a cost-effective distribution upgrade for the bulk and local electric system. Additionally, the Public Service Commission is to develop a capital program for each utility that requires upgrades, while the NY Power Authority is supposed to use its resources to construct new bulk transmission resources. In keeping with the streamlining of procedures under the Accelerated Energy Act, the siting process is supposed to take less than nine months for transmission infrastructure constructed within existing rights-of-way. Although the State is still suffering under the COVID-19 shutdown of schools, governments and non-essential business, economic development on re-start will be critical to the financial and personal health of State residents. The Accelerated Energy Act clearly sets a focus on renewable energy development across the State and attaining the lofty goals of the CLCPA. While the regulations and program details remain to be developed, hopefully the development of clean energy can be accomplished in a manner that creates financial and environmental benefits, while still providing meaningful input to local governments where the facilities are located. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

In addition to Paul Keneally, this post was authored with input from Alina Nadir and Jennifer Shoemaker. The State has released a template for the written safety plan that all businesses now re-opening, already open or will re-open must complete. It can be found at the Forward NY website. These plans do not need to filed with any agency, but must be available should it be requested by State or local authorities. Also, for the five specific industries re-opening today, Construction, Manufacturing, Retail (Curbside Pickup), Wholesale Trade, and Agriculture, Forestry, Fishing and Hunting, the Forward NY website contains the State Interim Guidance (and a Summary document) for each. At the end of each Interim Guidance, a Business Affirmation form must be submitted through the link indicating that the business representative has read and understands the obligation to operate in accordance with it. Independently, two other COVID developments this week are: The State has issued a guidance on how employees may obtain an Order of Precautionary or Mandatory Isolation or Quarantine entitling them to State COVID paid sick leave, job protection and/or enhanced paid family leave/disability. These Orders may be obtained for employees who have tested positive for COVID; who are symptomatic, have not been tested but have had contact with someone who tested positive for COVID; who have been in close contact with someone who is in mandatory COVID isolation; who are symptomatic and have returned within the last 14 days from a country listed as level 2, 3, or 4 by the CDC; or who have had proximate exposure with someone who has tested positive for COVID. This guidance may result in more such Orders triggering the right to State COVID law benefits than we have seen so far, so please be on the lookout for them. The Democratic leadership of the U.S. House of Representatives has released its proposal for the Phase 4 COVID relief law, the so-called HEROES Act. Some of the proposals are: An extension of the $600/week unemployment supplement Emergency Paid Sick Leave (EPSL) and Emergency Family and Medical Leave Act (EFMLA) for all private employees regardless of employer size Expanded reasons to qualify for EFMLA, and making the Family and Medical Leave Act (FMLA) and EFMLA consecutive not concurrent; Hazard pay reimbursed by the federal government; Extending the Paycheck Protection Program (PPP) loans covered period, time to re-pay and re-hire and eliminating the penalty for not re-hiring some employees. Republicans have indicated opposition to many of these proposed provisions, and said that they are most interested in employer protection from COVID-related lawsuits. Talks are expected to last at least several weeks. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

Those that have received a Paycheck Protection Program (PPP) loan have certified to their lender and the Small Business Administration that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant “. Numerous media reports stated that after the initial allocated PPP loan funds were quickly exhausted due to a significant amount of the funding being received by large companies that would not, on their face, seem to need the support the PPP loan program was intended to provide. As a result, the SBA and Treasury Department updated the program FAQs to address the necessity certification. Those with PPP loan applications in process, and those considering a PPP loan, should carefully consider their ability to make the necessity certification. Question 31 of the FAQ addresses the certification to a limited degree. The analysis is broken into two elements. The first element requires the borrowers take into account their current level of business activity. The expectation is that to meet this first element there should be some decrease in revenue of the borrower arising from the virus crisis. The second element focuses on alternate sources of liquidity. While the requirement that borrowers be unable to obtain credit elsewhere is suspended for this program, borrowers must nevertheless “consider their ability to access other sources of liquidity to support operations in a manner not significantly detrimental to the business”. Currently, the only example in the FAQ involves public companies with access to capital markets. So far, there is no analysis regarding other sources of liquidity, such as cash on the balance sheet, available undrawn funds on an existing line of credit or the personal resources of the owners of a private company. In a subsequent update, borrowers were informed that additional guidance on the necessity issue will be forthcoming shortly. This updated guidance is crucial because a safe harbor was created for borrowers who have received PPP loan funds but are concerned that they may not have properly made the necessity certification. Borrowers that repay the PPP loan proceeds in full by May 14, 2020, will be deemed to have made the required necessity certification in good faith. Borrowers should be aware that in the event of a breach of the necessity certification, or any other certifications in the PPP loan application, the borrower, and in some cases, its officers, directors or owners, may be liable for civil and or criminal penalties. Further guidance was also provided in the FAQs that an employer that received a PPP loan and repays it by the safe harbor deadline of May 14, 2020, will be eligible to receive the employer retention credit established under the CARES Act. More information on this credit may be found here. 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.

In addition to Paul Keneally, this post was authored with input from Alina Nadir and Jennifer Shoemaker. Some developments as the state and federal governments start to consider the re-opening of more workplaces to employees: The EEOC has issued a guidance that COVID testing of employees should be permitted and should not be considered itself a violation of the Americans with Disabilities Act (“ADA”), just as it previously had stated regarding taking the temperatures of employees. This EEOC guidance comes just as Governor Cuomo here in New York has approved independent pharmacies to perform COVID-19 diagnostic and antibody testing, and we await more information on when that testing will begin. In addition, a drive-thru COVID-19 testing center has just opened at Monroe Community College (“MCC”) for health care providers, emergency responders and those with sufficient symptoms to meet the criteria to be tested only. Appointments are required by phone prior to going to MCC for a COVID-19 test. The Governor has also issued a guidance on the stages of the re-openings in New York, perhaps as soon as May 16, 2020: stage one to be for certain manufacturing and construction employers. Stage two will begin with other businesses deemed to be more essential and less of an outbreak risk, before proceeding to allow the opening of businesses deemed to be less essential and riskier. All employers re-opening will need a written safety plan for its employees; and each region will have a control center to monitor the safety performance of that region’s employers. Businesses re-opening (and those already open) will be required to have a written plan outlining the specific safety precautions they will be taking to help lower the risk of spreading the COVID-19 virus. Factors to be considered for inclusion in the safety plan: Workplace hours and/or shift adjustments; Social distancing standards; Non-essential travel restrictions; Masks to be worn by those who cannot keep social distance; Strict cleaning and sanitation standards; Continuous health screening process for people entering the workplace; Assistance with the reporting, tracking and tracing of COVID-19 cases; and Develop liability processes. On a separate topic, the New York State Division of Tax and Finance has directed employers in New York who are reducing the schedules of, or terminating, laying off or furloughing employees to provide those employees with the employer’s NYS registration number, federal employer identification number and official name and address, in order to facilitate the processing of the employees’ unemployment insurance applications. 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.