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Boston Fed Releases Updated FAQs, Forms and Agreements Related to the Main Street Lending Program

  • On June 8, the Federal Reserve Bank of Boston (the “Boston Fed”) released updated and revised Frequently Asked Questions regarding the Federal Reserve’s Main Street Lending Program (“MSLP”). On June 11, the Boston Fed released updated and revised documentation with respect to the MSLP.
  • For Lenders: On June 15, the MSLP Program went live for lender registration. Click here for more details and to register.
  • Definitions:

  • “New Loans” are those MSLP loans originating on or after April 24, 2020 in a minimum principal amount of $250,000 up to a maximum principal amount that is the lesser of (i) $35 million or (ii) an amount that, when added to the borrower’s existing outstanding and undrawn available debt, is less than or equal to 4.0x the borrower’s 2019 adjusted EBITDA.
  • “Priority Loans” are those MSLP loans originating on or after April 24, 2020 in a minimum principal amount of $250,000 up to a maximum principal amount that is the lesser of (i) $50 million or (ii) an amount that, when added to the borrower’s existing outstanding and undrawn available debt, is less than or equal to 6.0x the borrower’s adjusted 2019 EBIDTA.
  • “Expanded Loans” are those upsized tranches of the borrower’s existing loans (those loans originated before April 24, 2020) ranging from a minimum principal amount of $10 million up to a maximum principal amount that is the lesser of (i) $300 million or (ii) an amount that, when added to the borrower’s existing outstanding and undrawn available debt, is less than or equal
  • Breaking Down the Reasonable Security Landscape

    June 17, 2020

    Categories

    We invite you to join BCLP’s Data Privacy and Cyber Security co-leader Jena Valdetero, Crypsis Group’s VP of Cyber Risk and Resilience Management Art Ehuan and Trend Micro’s Chief Cybersecurity Officer Ed Cabrera for their webinar “Breaking Down the Reasonable Security Landscape,” which will examine the meaning of reasonable security, and the effectiveness of reasonable security programs.

    UK Coronavirus Furlough Wind Down – Dates and Costs for UK Retailers to Note

    The Coronavirus Job Retention Scheme (“CJRS”) was launched on 20 April 2020 in the UK, and numerous household names in British retail have sought to rely on the scheme by furloughing staff. As at 31 May 2020, HMRC reported that 8.7 million jobs had been furloughed in the UK, with a total value of claims made at around £17.5 billion1; which is representative of almost a quarter of employees in Britain.2

    On 12 June 2020, the UK government released new guidance3 to implement flexible furlough and gradually wind down the CJRS to its expected end date of 31 October 20204. The government’s go-head to many non-essential retailers to re-open their doors on 15 June 2020 aligns closely with this wind down.

    Retailers with UK employees will need to make early assessments as to whether (and, if so, how) they will continue to furlough employees going forward. We set out some key dates below to bear in mind:

    10 June 2020: Apart from those returning from family leave, furlough claims can only be made in respect of employees who have already been registered under the CJRS by this date. 16 June 2020: In addition to knowing when the changes take effect, UK retailers need to bear in mind the risk that they may also trigger collective consultation obligations. The obligation to collectively consult may be triggered by a proposal to change terms and conditions or make redundancies of 20 or more employees at 1 establishment within a 90 day period (whether or not

    Managing Counter-Party Risk in the Pandemic – Part II

    Part II: Customer Considerations: Risk Mitigation = Smarter Sales

    In the coming months, very few companies, whether public or private, will be able to avoid including statements in their quarterly reports or financials that attribute single or double digit percentage declines in revenue to doubtful accounts and insolvencies of major customers caused by the pandemic. For many, if not most, that disclosure will continue beyond Q4 of 2020 and through 2021.

    In prior periods, lenders and other key stakeholders may have been tolerant to these one-off, non-systematic declines due to unanticipated insolvencies of customers (and the ability to replace the revenue/income either through liquidation of collateral or replacement of customers). After all, none of us have a crystal ball, and many of the insolvencies were unforeseen (or unexpected). To the extent they had it, lenders and other creditors didn’t have to worry about being able to liquidate collateral – a market was almost always available to sell collateral (or sell their products elsewhere), and there was plenty of money in the market to facilitate transactions (and curb the downside risk).

    Post-pandemic, while companies may still not have crystal balls, they at least have tarot cards and Ouija boards – and the signs are strong that market participants will be impacted across industries on a global basis. Lenders and other key stakeholders will want to know what measures were taken to mitigate those reported declines, particularly if the secondary markets to mitigate risks of nonpayment will be stretched (or perhaps non-existent)

    Final CCPA Regulations Submitted to California Office of Administrative Law

    June 3, 2020

    Categories

    After a long wait, the California Attorney General submitted final CCPA regulations to the California Office of Administrative Law (“OAL”) today. He requested that the OAL expedite its review of the final regulations so that they would become effective by the statutorily mandated date of July 1, 2020.

    Note that to date the Attorney General has indicated that he will not delay enforcement of the Act, or of the regulations when they are published. As a result, the Attorney General has implied that all businesses should be compliant with the Final Regulations by July 1, 2020.

    A copy of the final regulations can be found on CCPA-Info.com. Among other things, the final regulations require most companies to update the following CCPA-related documents:

    • Privacy notice. • Data subject request protocol • Data subject request communications templates • Possible additional disclosures for “financial incentives.”

    Given the number of companies that are moving to modify policies in the next four weeks, if you would like our assistance, please contact us as soon as possible so that we can add you to our workflow.

    Update: June 2020 California Consumer Privacy Act (“CCPA”) Litigation Tracker

    June 3, 2020

    Categories

    As of January 1, 2020, California became the first state to permit residents whose sensitive personal information is exposed in a data breach to seek statutory damages between $100-$750 per incident, even in the absence of any actual harm. Further, the California Attorney General may bring a civil action against any entity violating the CCPA, seeking an injunction and civil penalties between $2,500 (for each violation) and $7,500 (for each intentional violation).

    Click here to read the Alert in full.

    COVID-19 redundancy issues: HR frequently asked questions in multiple jurisdictions

    We understand that our clients and contacts will be addressing complex redundancy issues related to COVID-19 in multiple jurisdictions. BCLP, together with our local counsel friends, have produced a global Q&A document covering 40 jurisdictions. We cover questions around dismissals, compensation, collective consultation and alternatives to redundancy.

    Please download our global Q&A document here.

    The document covers the following questions:

    • Is there any legislation, order or mandate prohibiting an employer from dismissing an employee in circumstances where the employer has obtained the benefit of Coronavirus government support?
    • Does an employee with a qualifying period of employment have any statutory protection against redundancy dismissal?
    • What redundancy compensation is payable to an employee who is dismissed by reason of redundancy?
    • Should an employer take into consideration a Coronavirus government support scheme before dismissing an employee?
    • Are employers subject to separate collective consultation obligations?
    • If an employer is subject to collective consultation obligations, is there any defence for a failure to comply?
    • If an employer is subject to collective consultation obligations, what is the sanction for a failure to comply?
    • What alternatives to redundancy dismissal are open to an employer?

    A Guide to Navigating COVID-19 Price-Gouging Litigation Against Manufacturers, Suppliers, and Retailers of Food and Consumer Goods in the U.S.

    The COVID-19 pandemic has led to sharp spikes in demand for basic necessities, alcohol-based disinfecting products, and essential food staples. Consumers have been willing to pay a premium to stock up on these items from both brick-and-mortar and online marketplaces.  While there is no federal law establishing clear guidelines regarding price gouging, many states have laws that limit or prohibit sellers from charging excessive prices for certain consumer products, which are triggered by the declaration of an emergency by federal, state, and/or local officials. Plaintiffs’ lawyers and states’ attorneys general have begun bringing state and nationwide class actions for price gouging against suppliers, distributors, and retailers of essential products, and we expect this litigation to increase in coming months.

    In this three part series, we provide the statutory landscape and analyze the newly filed litigation, outline some key litigation strategies, and advise on best practices for manufacturers and retailers to minimize risk of litigation or investigation for pricing practices.

    PART ONE:  Landscape of COVID-19 Price Gouging Regulation

    Part One of this report provides an overview of the statutory landscape governing price gouging and summarizes some of the newly filed cases.

    Statutory Landscape

    Most of the 50 states have enacted specific laws prohibiting price gouging; in other states, actions are brought under general consumer protection statutes.  Many states’ price-gouging statutes do not provide a private right of action, instead vesting prosecutorial authority in the state attorney general’s office.

    While most states prohibit price gouging, the laws vary greatly.  Many states, such

    Paycheck Protection Program Loan Forgiveness Application Answers Many Questions—But Not All

    The Small Business Administration’s (“SBA”) release of its official loan forgiveness application under the Paycheck Protection Program (“PPP,” Section 1102 of the CARES Act) answered a number of questions that borrowers and their legal and accounting advisers had regarding the program. But the application also leaves some questions unanswered, and borrowers, their lawyers, and their accountants are eagerly awaiting the release of promised loan forgiveness regulations that are expected to be posted online in coming days or weeks on Treasury’s website.

    Borrowers should consult all existing regulations and guidance as they prepare to apply for PPP loans and as they prepare to apply for loan forgiveness. What follows is a high-level discussion of what we have observed in the latest guidance, but borrowers should be aware that the official federal guidance is changing weekly if not daily, and, depending on the complexity of a borrower’s application, consultation with a lawyer or accountant may be vital to ensuring compliance with the program. We also note that the original applications for PPP loans were revised after being initially provided and, while we have no reason to believe the loan forgiveness application will be revised at this point, the possibility certainly exists.

    What We Know Now

    Following disbursement of the PPP loan proceeds, each borrower has an eight-week period during which certain costs incurred or paid may be forgiven by the government. A number of practical questions about accounting for the how, when, and what surrounding payments during the 8-week forgiveness period have been cleared by

    COVID-19 in 19 Teleconference: UK Coronavirus Job Retention Scheme – what next for employers?

    We are holding a regular series of bite-sized 19-minute teleconferences on the key COVID-19 employment law issues employers need to think about.

    Our second teleconference looks at the UK government’s furlough scheme. The UK government recently announced that the scheme will extend until 31 October 2020, albeit in a different format from 1 August 2020.

    This session will cover:

    • Key aspects of the current furlough scheme.
    • Some of the practical issues that employers are currently experiencing under the furlough scheme.
    • An overview of the proposed changes to the furlough scheme.
    • Issues to consider after 1 August 2020.
    • The next “cliff-edge”.

    Event details Date Wednesday 20 May 2020 Time 11.30-11.49am (BST) Dial-In Instructions Provided to registrants in advance of the teleconference.

     

    Register to attend >

    Back to Business: Re-opening Guidance for California Retailers

    As states continue to wrestle with when to reopen, California has unveiled a phased-in plan that gives counties control over how quickly to reopen, and provides guidelines specific to each industry. What does this mean for your business? What procedures should you consider implementing? Joined by Rachel Michelin, president of California Retailers Association, presenters will offer a number of best practices and model guidelines to help retailers, not only in California, but across the U.S., protect against the spread of COVID-19 to keep workers and customers safe.

    As part of our continuing series of teleconferences on the impacts of COVID-19, presenters will cover the following topics:

    • Creating a worksite specific plan
    • Employee Training
    • Individual control measures and screening
    • Cleaning and disinfecting protocols
    • Physical distancing guidelines

    Date Wednesday, May 20, 2020 Time 10:30 a.m. to 11 a.m. PDT 11:30 a.m. to 12 p.m. MDT 12:30 p.m. to 1 p.m. CDT 1:30 p.m. to 2 p.m. EDT

    Register

    U.S. COVID-19: New FFCRA Q&A – Key Takeaways Regarding the “Need” for Leave, Joint Employers and Domestic Workers

    The federal Department of Labor (“DOL”) is closing in on 100 informal “questions and answers” (the “Q&A”) relating to the Families First Coronavirus Response Act (“FFCRA”), having issued Q&A #s 89-93.  The new Q&A address steps employers may take when determining whether employees truly “need” FFCRA leave; issues relating to domestic workers; and a reminder for joint employers that prohibitions on adverse action, interference and retaliation may apply even to employers who are not covered by the FFCRA.

    Determining Whether Employees Have A Qualifying Reason For Leave

    Three of the five new Q&A provide critical guidance for employers on permissible questions and documentation requirements to ensure that leave is being taken in appropriate circumstances.

    In the first Q&A (# 91), the DOL posits a factual scenario in which an employee with children has been teleworking productively for several weeks despite school closings, but then requests FFCRA leave.  The hypothetical employer wonders:  Can I ask my employees why they are now unable to work or if they have pursued alternative child care arrangements?”  The DOL responds affirmatively, indicating that an employee may be asked “to note any changed circumstances in his or her statement as part of explaining why the employee is unable to work.”

    Employers should “exercise caution” in this area, however, because, according to the DOL, the more questions asked, the greater “the likelihood that any decision denying leave based on that information is a prohibited act.”  There are many reasons why an employee may not have initially needed

    U.S. COVID-19: Biometrics and Business Re-Opening

    Now that wearing gloves has become the new normal because of the COVID-19 pandemic, biometric privacy litigation, which in recent years has centered on employers’ use of finger-scan timekeeping technology, may ultimately shift in focus to the measures that businesses implement as employees return to the workplace and customers begin to frequent their favorite establishments.  Body temperature checks, used to screen employees and visitors for a fever, are one such measure being considered as a first line of defense for public health.

    To mount a defense against, or avoid altogether, biometric privacy class action litigation, businesses open to the public and employers must have a comprehensive understanding of the thermometer or thermal imaging technology selected—and the data it captures—before rolling out temperature screenings on a widespread basis.  Among the technologies available are:

    • Non-contact infrared thermometers that use lasers to measure temperature from a distance;
    • Thermal imaging cameras that detect elevated skin temperatures compared against a sample of average temperature values;
    • Monitoring systems that use thermal and color visual imaging to detect fevers in high-volume pedestrian areas; and
    • “Wearables” that can use radiometric thermometry measuring electromagnetic wave emissions.

    While temperature screening has been endorsed by the Centers for Disease Control and Prevention, the Equal Employment Opportunity Commission, and various state and local governments, biometric privacy laws have not been suspended or amended.  The Illinois Biometric Information Privacy Act (“BIPA”) regulates the possession, collection, capture, purchase, receipt, and sale of “biometric identifiers” and “biometric information”—defined to include retina or iris

    Managing Counter-Party Risk in the Pandemic – Part I

    Part I: Getting on the Same Page

    Globally, boards and management teams are taking stock of current operations and finances to identity vulnerabilities to the unprecedented distress that markets are anticipating from the pandemic for the next 12-18 months.  As part of those discussions, many retail businesses (and those with operations related to retail, like landlords, logistic companies, shipping interests, etc.) are focusing on receivables and risk weighting as to the collectability and the follow-on impact of doubtful accounts.

    These conversations will inevitably lead to the age-old conflict that pins finance and legal functions – that are largely focused on risk – against business/sales functions, which are generally focused on sales and keeping customers happy.  Pre-pandemic, sales teams historically had a leg up as revenue generation inevitably trumped risk mitigation in the context of strategic decisions.  However, the same behavior and cultures that have been allowed to prevail when there was only a handful of distressed counter-parties cannot persist where companies are now dealing with entire portfolios of customers and vendors in varying degrees of stress and distress.

    To be effective with mitigation, it means that Finance, Legal and Sales need to quickly get on the same page in terms of identifying the level of risk each counterparty poses to the business (and how that counterparty’s inability to pay or deliver goods/services will impact the overall business).  In doing so, companies will be better able to allocate scarce resources to counterparties that pose the greatest degree of near-term risk while

    A Checklist for the U.S. Food Retail Industry in Light of COVID-19 Re-openings

    May 8, 2020

    Categories

    On April 24, 2020, Alaska became the first state to allow restaurants to reopen to dine-in customers (subject to certain precautions) since the COVID-19 pandemic began.  On April 27, 2020, Georgia and Tennessee followed suit.  Several other states have announced similar plans to reopen restaurants to dine-in customers throughout May.

    Each state has its own requirements for re-opening, and many include some combination of the following restrictions: 1) workers must wear masks; 2) restaurants can only allow outdoor dining; 3) establishments can only be filled to a certain capacity (typically 25% or 50%); 4) reservation-only dining; and 5) hand sanitizer must be available at each table or at the restaurant’s entrance.

    In light of these re-openings, we suggest that companies in the food retail industry consider the following, if they have not done so already:

    • Determine whether it is financially feasible to reopen if required to comply with the guidance set forth in the applicable order(s), or, if located in a state that has not yet provided rules for re-opening, consider which requirements would or would not be feasible.
    • Determine what supplies and goods will be required to reopen and develop a plan for sourcing the same.
    • Determine whether any physical modifications to the business will be required (i.e. barriers or screening between employees and customers and the spacing of payment terminal and cash registers).
    • Consider developing a process for providing temperature screening for employees who are showing signs of illness and review sick leave policies in order to

    U.S. COVID-19: California Governor Newsom Announces Guidelines for Some Non-Essential Retailers to Reopen

    One day before allowing “low-risk” retailers to reopen on a limited basis, California Governor Gavin Newsom on Thursday announced guidelines for certain retailers, manufacturers and other businesses to reopen fully during Stage 2 of the state’s reopening plan.

    Even prior to full implementation of these guidelines, retailers perceived as presenting a lower risk of spreading COVID-19 can reopen on a limited basis, such as by offering curbside pickup, as early as today.  As we previously reported, Newsom has stated that such retailers include shops that sell items such as clothing, books, music, toys, sporting goods, and flowers.

    At the press conference on Thursday, it was recommended that retailers offering curbside pickup take precautions such as having employees wear masks and gloves, bringing merchandise to a designated pickup location at the entrance or curbside, and encouraging use of payment methods and devices that reduce contact between employees and customers.

    Whether non-essential retailers can reopen will also depend on the county and city where they are located. Seven Bay Area shelter-in-place orders have been extended through May 31. Los Angeles County’s order is set to expire May 15. Governor Newsom has stated that local governments have a right to issue and enforce stricter orders than the state, where warranted.

    Under the state’s reopening roadmap, prior to reopening, all businesses are expected to:

    • Perform a detailed risk assessment and implement a site-specific protection plan
    • Train employees on how to limit the spread of COVID-19, including how to screen
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