April 20, 2020 - Attorneys, business and employment professionals discussed some of the difficulties faced by local entrepreneurs during the University of Houston Law Center's "COVID-19: Legal Implications for Small Businesses" virtual webinar last week.
"Whether you're an aspiring entrepreneur, an owner of an established business, or an attorney or other professional who serves the small business community, we hope the program provided helpful information when addressing the challenges small businesses face during this public health crisis," said Christopher Heard, Clinical Assistant Professor and Director of Entrepreneurship & Community Development Clinic.
Anthony R. Chase, an Associate Professor of Law & Business at the University of Houston Law Center, was one of four panelists. Chase was recently selected as co-chair of the Greater Houston COVID-19 Recovery Fund.
He indicated that the economic impact of COVID-19 will be more devastating to small businesses than Hurricane Harvey.
"I co-chaired a relief fund during Hurricane Harvey as well, and there are major differences," he said. "Harvey had a beginning and an end, which was quite a bit shorter than this. As a result of dramatic flooding shots during Hurricane Harvey being broadcast around the world, the Hurricane Harvey relief fund attracted donations internationally.
"Today the market for donations for the local fund is local and not global. Everybody globally has their own COVID-19 fallout."
Valerie Maher, the lead economic development specialist for the U.S. Small Business Administration in Houston, provided a number of programs and resources available to small businesses that have been impacted by the pandemic. More information can be found at sba.gov/tx/houston,
Maher said an available financial option for businesses is the Coronavirus Aid, Relief, and Economic Security Act, which was signed into law on March 27.
“Businesses are given two loan choices, and they can pursue both the Economic Injury disaster Loan and Paycheck Protection Program,” Maher said. “The business needs to be in an affected area, which everyone is, and needs to meet size standards as well as other eligibility criteria.”
Maher also noted that non-monetary assistance are available with three local resource partners - the Texas Gulf Coast Small Business Development Center, SCORE Mentors and the WBEA Women’s Business Center. These groups can assist with cash flow management, short-term financial management, social media messaging to stay engaged with customers, planning for further disasters, risk management among other business areas.
Koby Wilbanks '13, a senior associate at Murrah & Killough, PLLC, discussed options for businesses when considering contractual considerations under COVID-19. The primary focus of her presentation was force majeure, defined as unforeseeable circumstances that prevent the fulfillment of a contract.
"Force majeure is generally considered to be an act of God, something outside the party's control. Some case law states that acts of God are considered natural disasters, and some case law is more broad in definition.
“What matters is the terms of your contract, because there is no common law force majeure. You only get the defense of force majeure if it is included in your contract and it is defined according to the contract."
Rebecca Baker a partner in the Houston office of Bracewell LLP and chair of the firm's labor and employment practice group, described the impact that recent legislation will have on small businesses.
"What we witnessed in March was really an unprecedented action by the federal government to pass legislation that for the first time mandates employers provide certain forms of paid leave," Baker said.
"The really interesting aspect of all of this legislation was it affects only employers with fewer than 500 employees. It's a very significant change for small employers, particularly those with less than 50 employees."
SCORE mentor Rita Leader '75 said the continuing legal education session provided valuable information to the small business community.
“I compliment the Law Center on a relevant, meaty and well organized seminar," Leader said. "I and my fellow SCORE attorney mentors attended and particularly appreciated the program’s focus on small businesses.”