Matthew Kenney

Small Business | Workplace Law

Create Energy & Exit a Rut

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The Niagara River flows normally for miles like many rivers. However, as the water approaches Niagara Falls it proceeds though a series of rapids; gains speed and the soars majestically off Niagara Falls to the basin below. From there the water continues its normal flow to the St. Lawrence River and its mist, on sunny days, produces beautiful rainbows.

Business is much like the water spilling over Niagara Falls. To experience the rush of exhilaration; see rainbows and experience tranquility in the future we should be willing to endure the turbulence that creates energy.

The result of this process at Niagara Falls is a natural wonder that attracts millions of visitors annually. The results for those who create energy within careers and companies is no less powerful. Think about it: All the great innovations that have advanced humankind were created by people with energy enough to put thoughts into action.

How to Create Energy

Have you ever noticed how an office, warehouse or restaurant etc. feels different when it’s busy? What you’re feeling is energy. Kinetic energy is created through motion. As you put ideas into motion, you are creating energy. Take action and you’ll create energy every time. Create energy and you’ll move forward and reach goals faster. 

Anyone can create energy as the only prerequisite is a willingness to take action. Start small by focusing on topics within your span of control and you’ll feel the energy generating. Start with something simple, but start. You’ll feel better and your career/business will move forward.

Of course, it’s difficult to generate enthusiasm when a business has been forced to shut-down, or a career has been negatively affected by COVID-19. But what choice do we have? The river has changed. Society has changed. Our economy will recover, but things will be different going forward…..and that’s OK. Let’s change with the circumstances. If we evolve, learn, and grow during this difficult time–perhaps we’ll be more prosperous when we next step into the river of commerce.

(c) Copyright 2020. All Rights Reserved.

The CARES ACT & Your Small Business

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If your small business has been negatively impacted by COVID-19, the CARES Act may provide you with some relief. The law dramatically reduces the regulatory process required to receive a Small Business Administration 7(a) Loan.

The CARES Act provides the Paycheck Protection Program. Under the law, qualifying business may receive a loan in the amount of 2.5 times their average monthly payroll, up to $10 million. A significant portion of the loan is forgivable if the funds are used to provide payroll for either full or part-time employees.

Effectively, the US government will provide a grant in the amount of 8-weeks of a company’s payroll (including benefits) for the period between February 15, 2020 and June 30, 2020.

Loan proceeds can be used for other qualifying reasons, such as rent; utility payments and loan interest payments. An important aspect of the CARES Act: It is available to sole proprietors, independent contractors and non-profit organizations.

The law also modifies the Economic Injury Disaster Loan (EIDL) program. Because Florida has been declared a disaster area, small business owners can apply for loans up to $200,000 without providing a personal guarantee. Larger, long-term EIDL loans, up to $2 Million, have an interest rate of 3.75%.

Loans made under the CARES Act are non-recourse, meaning borrowers will not be subject to personal liability should their business default. Application fees are waived, and interest shall not exceed 4%.

If you have any questions about how the CARES Act can help your business navigate these difficult times, please contact call Matthew Kenney at 407-693-2050.

Coronavirus and Contracts: Must You Perform?

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The COVID-19 pandemic has negatively affected the global supply chain. Orders are going unfilled, which means contracts terms are not being met. Does it constitute a breach-of-contract when a supplier cannot fulfill its obligations?

The answer is: It depends.

Having a signed contract is one thing. Enforcing it is another. Under Florida law, there are instances where courts will excuse a party from contract performance. Two such instances: Where it is impossible to perform; and when it is impractical to perform.

However, courts will generally not excuse a party from performing when a disruptive event is anticipated at the time of contract formation. Stated differently, a court might require a party to perform if a risk — including a pandemic and resulting national emergency — was anticipated by the parties when they entered the contract.

The question before many business owners and their legal counsel: Is COVID-19 a risk that was reasonably anticipated by the parties?

Many written contracts will have a Force Majeure (meaning “Superior Force” ) clause, which excuses a party from performance if there is an unforeseen and uncontrollable event the parties could not have contemplated during the formation of their contract. There is no doubt COVID-19’s impact on one’s business is uncontrollable. The question in a breach-of-contract lawsuit, however, might be: Was it unforeseeable?

The phrase Force Majeure is generally used in contracts as synonymous with an “Act of God”. Contract performance prevented by hurricanes, floods and tornadoes would fall easily into this category. But what of COVID-19? Was this terrible event really unforeseeable?

Although COVID-19 feels like a sucker punch to our economy, futurists have warned of the risks of potential epidemics and pandemics (just like COVID-19) for years. Bill Gates gave a TED Talk on the subject in 2015, for example. Since 2000, the world has seen outbreaks of SARS, Swine Flu, Avian Flu, MERS etc. A reasonable person could argue parties should have addressed future epidemics and pandemics in their contract terms, given the notice we’ve been given by experts about our susceptibility to such events.

The point: Do not assume the effects of COVID-19 will absolve your company from contractual liability, even if performance is impossible or impracticable. A judge might ask: “If other companies and entrepreneurs specifically addressed the issues of national emergency, epidemic, or pandemic in their contracts….why didn’t you?”

Florida courts will likely evaluate your Force Majeure clause based on its clear, unambiguous language. It’s possible Florida courts will view non-performance related to COVID-19 as unforeseeable and uncontrollable events, freeing a party from performance. It is equally possible they will not. Therefore, the best approach going forward is to ensure your contract languages addresses epidemics and pandemics in clear, unambiguous terms.

Employees, Texting & Driving: What’s Your Policy?

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Department of Transportation statistics suggest we spend about an hour daily driving our vehicles. Of course, much of this time is spent commuting to/from work. We also know that text messaging within companies has become ubiquitous. So, this begs the question: Might employees and employers be texting each other while driving?

If the answer to the answer is “Yes”, the next question managers should ask is “Does our company have a texting while driving policy?”

If your company does not have such a policy, it should. Texting while driving is illegal in Florida. On January 1st, 2020 a tougher law goes into effect making texting-while-driving a primary offense. Essentially, this means police officers may pull-over drivers expressly for texting.

If your employees are texting each other, while at least one is driving, your company is assuming significant risk. We know this because texting while driving is extremely dangerous. In 2018 alone, nearly 5,000 deaths; more than 1,000,000 accidents; and nearly 400,000 injuries were related to cell phone related distracted driving.

If an employee is driving and texting, and the text is related to his/job, then any accident flowing from the employee’s distracted driving would, likely, be viewed as within the scope of employment. Thus, the employer would be responsible. It’s simple negligence, really. Drivers have a duty to protect others. Texting while driving breaches that duty. If injury is caused due to this breach; and the damages are those anticipated from such a breach (e.g. personal injury, property damage etc.)…your company is negligent.

Therefore, every company should have an anti-texting while driving policy that educates employees to the risks of texting while driving; prohibits the conduct;, and reinforces the illegality of the practice. Such a policy could establish best practices for how and when co-workers should communicate. At the very least, it could encourage employees to use smartphone features that block incoming messages while driving.

Rest assured, if an employee is involved in a texting while driving accident the plaintiff’s attorney will ask about your policy and training. Protect your company. Protect your employees. Protect innocent drivers, passengers and pedestrians. Make sure your company has an anti-texting policy…and enforce it. I’d be happy to draft such a policy for you. It’s not the most challenging legal exercise, but it’s among the most important. If your HR manager chooses to draft the policy, just be sure to have your lawyer inspect it to ensure it’s aligned with Florida law.

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