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Andrews Myers
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COVID-19 Update

Enforcement of the State and City of Austin COVID-19 Emergency Rules

by Clayton Utkov    In the July 15 Law Alert, we explained the new COVID-19 emergency rules issued by the City of Austin (COA) on July 14, 2020, including the specific requirements for construction sites. The COA issued these new emergency rules shortly after passing two ordinances creating offenses and penalties for failure to comply with local health rules. Recently, we have become aware of multiple conversations between contractors and COA inspectors, in which the inspectors indicated the COA planned to aggressively enforce the new rules. This article will focus on the enforcement of those new rules, but will start with a brief explanation of how the Governor’s Executive Orders opened the door for these COA ordinances.
 
On June 3, 2020, Governor Abbott issued Executive Order GA-26 relating to the expanded reopening of Texas. Among other things, GA-26 superseded “any conflicting order issued by local officials in response to the COVID-19 disaster” to a limited extent and eliminated confinement “in jail for violating any executive order or local order issued in response to the COVID-19 disaster.”
 
On June 26, 2020, Governor Abbot issued Executive Order GA-28, limiting certain businesses and services as part of the state’s efforts to contain the spread of COVID-19. Generally, GA-28 still allowed 50% occupancy in various businesses with certain exceptions. Paragraph 15 of GA-28 also states, “[N]o jurisdiction can impose a civil or criminal penalty for failure to wear a face covering,” but within a week, Governor Abbott changed his position... Read more
Construction
Construction is underway on Tesla’s Gigafactory Texas
by Brittany B. Long  Tesla finally made its long-awaited announcement that it officially chose Travis County as the location of its new “Gigafactory,” which will be its largest U.S. assembly plant. The factory will be located just outside of Austin in Del Valle, east of the Austin-Bergstrom Airport. The company is projected to bring in at least 5,000 jobs to the Travis County area, and potentially thousands more non-Tesla jobs due to secondary effects.
 
Construction is already underway on the 2,100-acre plot of land, which encompasses portions of the Colorado River. Musk says it will include “a boardwalk with a hiking and biking trail. An ecological paradise. It’ll have a hiking and biking trail and a stream . . . open to the public.” Drone footage is already appearing online showing the beginnings of the grading process. Based on information available, the target completion date is aggressively set for Spring 2021.
 
Austin Mayor Steve Adler called the decision an “important economic boost in east Austin, especially as we fight the economic effects of the virus.” We expect to see job opportunities arise for contractors and suppliers. In order to become eligible to perform work on the site, Tesla requires all direct contractors and subcontractors to obtain preapproval through their online portal called eComply. Information about this system and how to register can be found here.
 
We will continue to provide updates as the project progresses.

Navigating Pre-Litigation ADR Requirements in a Post-COVID World

by Christopher Love As the construction industry continues to grapple with the coronavirus, some industrial contractors have found themselves in a conundrum.  The situation arises when a contractor has a high stakes dispute with a foreign owner on an industrial project. Their contract often mandates that before filing suit or proceeding with arbitration, the parties must meet in-person and conduct exhaustive senior management negotiations.  This usually requires a good amount of coordination, scheduling, and often times international travel.  
 
A contractor’s failure to abide by pre-litigation dispute requirements comes at the risk of harsh penalties.  When faced with such a situation, the contractor must examine and weigh the risks and make an informed decision on the best path forward. ... Read more
Manny Schoenhuber to join American Council on Germany
The Board of Directors of the American Council on Germany, a 501(c)(3) based in Manhattan, recently invited Andrews Myers attorney Manny Schoenhuber to become a member of the influential group after a recommendation from the German Consulate General in Houston.
Manny was born and raised outside of Munich, and speaks fluent German. He is also an active participant in the German American Chamber of Commerce in Houston. The council was founded nearly 70 years ago by German-Americans who saw the need to restore good relations and promote understanding between Germany and the United States. 
Employment

CDC Changes Back to Work Guidance Given Possibility of Persistent COVID-19 Positive Tests

by Tony Stergio  At this point most employers have had an employee who has tested positive for COVID-19 and had to decide when that employee could safely return to work.  A number of employers in this position have encountered positive employees who never actually had symptoms, or no longer exhibit symptoms, of the virus but are having difficulty producing a COVID-19 negative test.  These difficulties could stem from test availability, delays in test results, or tests picking up virus genetic material or proteins left in the body even when the virus is no longer active. 
 
These persistent positive cases, and problems with test availability as well as delays in test results, have resulted in the CDC modifying its return to work guidelines.  Those modified guidelines allow employees to work without obtaining a negative test result in the following relaxed situations: 
 
If the Employee Never had Symptoms:
Employee may return to work if it has been at least 10 days from the employee’s initial positive test result. ... Read more
COVID-19: Dealing with Contractors who have not Taken Proper Measures
by Tony Stergio   Contractors across Texas have taken aggressive steps to protect their workforce from COVID-19 by implementing measures such as:
  • Entry point temperature checks and questionnaires.
  • Monitoring of employee symptoms.
  • Follow-up questionnaires for employees that have had close contact with positive or potential positive individuals.
  • Virus testing for active and/or returning employees.
As we have seen, however, the virus does not respect state or international borders. Likewise, the virus does not draw distinctions between the employees of one contractor or another. Therefore, in the multi-employer construction environment, one employer’s efforts can be thwarted if an employee works side-by-side with the workforce of a contractor that has not taken the same COVID-19 preventative measures.  

OSHA liability is definitely a concern when dealing with COVID-19 infections among employees.  Remember that if an employee becomes infected with the coronavirus, an employer must investigate to determine if such infection was contracted at the workplace.  If the infection was likely contracted at work, that employee’s infection is recordable on the employer’s 300 log.  If the infection results in an inpatient hospitalization within 24 hours (or a fatality within 30 days) of the work-related infection, the incident becomes an OSHA reportable incident. ... Read more
Bankruptcy

Here We Go Again – How FERC’s Jurisdictional Struggle With Bankruptcy Courts Continues in the Chesapeake Bankruptcy Case

by Patrick Kelly A new front in the Federal Energy Regulatory Commission’s (“FERC”) push to gain concurrent jurisdiction with bankruptcy courts has now officially been opened in the Chesapeake Energy Corp. (“Chesapeake”) bankruptcy case.

As previously discussed in the October 2019 AM Law Alert article FERC v. Bankruptcy Courts: How Exclusive is Exclusive Jurisdiction, energy producers in Chapter 11 bankruptcy now face a growing jurisdictional dispute over whether a bankruptcy court can discharge contracts and agreements regulated by FERC. That struggle has now entered into the realm of transportation agreements regulated by FERC under the Natural Gas Act (“NGA”).

For the first time, on June 22, 2020, FERC issued an Order finding that energy producers like Chesapeake must “obtain approval from both FERC and the bankruptcy court” to modify a filed rate or reject a gas transportation agreement regulated by the NGA.  The agency’s decision was in response to a Petition for Declaratory Order filed by ETC Tiger Pipeline, LLC, a counterparty to Chesapeake on multiple natural gas transportation agreements... Read more
Real Estate
Lease Forbearance Considerations
by Scott McKaig   As COVID-19 cases in Texas continue to rise, property owners and tenants are faced with continuous uncertainties regarding the state of the local economy, and the application of current and future shutdown mandates, and other similar restrictions. Unsurprisingly, these factors have led some tenants to be unable to meet ongoing financial obligations under their respective commercial leases. While the ability for a tenant to defer rent is always determined on a case-by-case basis, depending on the provisions of such tenant’s respective lease and/or the property owner’s ability and willingness to grant such relief, there are several factors that should be considered in the event both a landlord and tenant are considering entering into a rent deferment agreement.

From a landlord’s perspective, if the property is subject to a mortgage or similar encumbrance, the landlord’s initial consideration should be to confirm whether the loan documents allow for any form of rent relief. Many customary loan agreements prohibit landlords from granting such rent relief without the lender’s express written consent, in order to protect the lender’s interests.  Assuming the landlord has such flexibility (or if an affected lender acquiesces to such a request), the parties will need to determine whether rent is to be abated or deferred. It is generally in the landlord’s best interest that rent be deferred rather than abated—meaning that the tenant must still eventually pay all of the corresponding rent—but this may not always be the case, such as if the parties are working towards a specific arrangement that will allow the tenant to stay afloat and avoid bankruptcy ... Read more
Scott McKaig Joins Austin Office
Commercial Real Estate and Corporate attorney Scott McKaig, senior associate in the Houston office, will be relocating to our Austin office on Aug. 1st. Scott is the second attorney to join Austin in recent weeks, but the first with CRE experience - a welcome addition to their expanding practice groups.
Scott's real estate practice covers all aspects of commercial real estate, including acquisition, development, capitalizing, financing, leasing and disposition of all product types of commercial real estate. His corporate/commercial practice centers on the formation and restructuring of commercial entities, as well as the acquisition, capitalization, financing and disposition of business enterprises, the preparation of various contracts and agreements, and the representation of clients in their ongoing business activities. He can be reached at 512.900.3064 or via email.
Multifamily Webinar August 13
Andrews Myers is proud to be the Event Sponsor of the Houston Business Journal's The State of Commercial Real Estate series. The second installment will be Multifamily focused.

This is a FREE, live webinar on Thursday, August 13 at 2:00 p.m. Register here
Litigation & Arbitration
COVID's Effect on the Business (Interruption) of Sports
by Lauren Scroggs  COVID-19 has caused immeasurable disruptions to our daily lives since it materialized in the United States this spring.  In a perfect storm of inconveniences, the pandemic both trapped us at home and deprived us of the entertainment of professional sports. Sports teams, their owners and their venues are now busy filing insurance claims instead of playing ball. 
 
The National Basketball Association’s season was well underway when the pandemic hit with some games ending in the middle of play because of positive diagnoses. The season went on temporary hiatus beginning March 11th and has scheduled a shortened season to resume July 30th from the Disney World “bubble” in Orlando. Major League Baseball’s opening day was initially slated for March 26th, but it, too, was forcibly postponed.  A shortened, 60-game MLB season began July 23rd, however the recent virus breakout with the Marlins has put the season schedule in question. Neither the NBA nor the MLB will permit fans at the games during these shortened “seasons.”
 
The National Football League has been largely spared from interruption given its late-summer start date, but it announced last week that its August preseason games have all been cancelled.  As of now, the NFL’s regular season is set to play as originally scheduled beginning on September 10th.  The NFL, unlike other sports, is allowing the individual teams to decide whether to allow their fans to attend in person.... Read more
About Andrews Myers
Celebrating 30 Years in 2020
Founded in 1990, with offices in Houston and Austin, Andrews Myers, Attorneys at Law, is a corporate law firm and recognized market leader in Texas construction law.  The firm focuses on the concentrated disciplines of commercial litigation, construction, commercial real estate, corporate and business transactions, with additional emphasis on related issues including bankruptcy and insolvency, energy, employment and capital formation. A seasoned team of attorneys provides timely and cost-effective solutions to the most complex problems facing entrepreneurs and middle-market industry leaders throughout the state and the nation. For more information please visit www.andrewsmyers.com.
COVID-19 Updates
Andrews Myers attorneys have been tracking and updating the many changes that could effect you and your business throughout the ongoing COVID-19 Pandemic. To see all of the articles and information you may have missed, please visit our dedicated COVID-19 page on the AndrewsMyers.com website. To subscribe to our newsletter, click here
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