Firm News

Families First Coronavirus Response Act Updates

Posted on by Brigitte Flores

On March 25, 2020, the Department of Labor (DOL) published the required posters covered employers will need to provide to employees under the Families First Coronavirus Response Act (FFCRA):

Posters:

The DOL also provided a FAQ about the Notice:

The DOL has indicated in a separate news release that it will not be enforcing violations for the first 30 days after enactment of the FFCRA (through April 17, 2020) for good faith compliance efforts.

The DOL has opted to begin the benefits one day prior to the end of the 15-day period initially slated for the legislation to go into effect, so April 1, 2020 is now the date when covered employers should begin providing these benefits.

Contact Us
For any employment matters, please contact:
Wendy A. Alexander
Employment Law Attorney
walexander@thelandlawyers.com
(703) 680-4664

Is COVID-19 a Force Majeure Event?

Posted on by Brigitte Flores

On Monday, March 23, in response to the novel coronavirus (COVID-19) pandemic, Governor Northam issued Executive Order Number 53 “Establishing Temporary Restrictions on Restaurants, Recreational, Entertainment, Gatherings, Non-Essential Businesses, and Closure of K-12 Schools.” Certain businesses have been ordered closed or subjected to untenable operational limitations that will almost certainly result in loss of revenue, and delayed or impossible performance of regular activity. Even before the issuance of the Executive Order, many businesses had begun to limit access and occupancy voluntarily, or were suffering lower sales and customers as people began practicing best-practices to curb the spread of COVID-19. As of this writing, Congress is about to pass a multi-trillion dollar economic stimulus package in anticipation of a recession caused by virus-related business closures and loss of employment.

At Walsh, Colucci, Lubeley & Walsh, our attorneys have already received numerous inquiries as to the applicability of ‘Force Majeure’ clauses in leases, construction agreements, purchase contracts, and other commercial agreements; the availability of defenses to possible breach of contract claims arising from actions or inaction, arising from virus related social and economic condition; and whether the virus itself is an ‘Act of God’ that may excuse contract performance. This article, which presumes an otherwise enforceable agreement already exists, is an introduction to these topics.

What is ‘Force Majeure’?

Simply stated, the term force majeure means a “superior or irresistible force.” Virginia law recognizes that, in certain circumstances, factors beyond the control of the parties may render a party’s performance of its obligations under the contract impossible. These are commonly known as ‘force majeure’ events. If these events occur, a party may be excused from contractual compliance and may rely on the affirmative defense of “Impossibility of Performance” should a Breach of Contract claim be filed against them.

The important caveat to the above, however, is that Virginia law expressly permits parties to assume the risk that their performance may nonetheless be made impossible, or otherwise modify the conditions upon which a force majeure defense may be permitted or deemed to have occurred. In other words, parties are free to contract around the baseline standards of Virginia law and to agree what may be considered a force majeure event, and what will not. Hence, as with most questions related to the enforcement of contracts in Virginia, the analysis of the question necessarily begins with a review of the contract itself.

Is Force Majeure the same as an “Act of God”?

Many clients have asked what the difference is between force majeure and an “Act of God.” As a general rule there isn’t much, and the two terms are sometimes used interchangeably, especially in relation to the “Impossibility of Performance” defense. An illness or natural disaster may qualify as an “Act of God” or force majeure event. Notably, though in a different but relevant context, the Circuit Court of Madison County, Virginia, held this past March 19th, and as a matter of law, that the coronavirus pandemic is a Natural Disaster. If your contract stipulates, or triggers various defenses upon the occurrence of, a natural disaster, there is therefore precedent to claim such a defense already.

Conditions exist that will make completion of the contract hard, but not impossible, does that matter?

Importantly, Virginia law requires that the party relying on a force majeure event or an Act of God as a reason for non-compliance with a contract term do all in their power to provide substantial performance or delivery as soon as practicable. Virginia law may permit a party claiming impossibility a reasonable delay in time of performance or completion. It does not permit a party to simply walk away from a contract that the party has the capability to ultimately perform.

Can you provide some real world examples of “Impossibility of Performance”?

While most commercial agreements contain force majeure provisions, it is entirely possible that yours does not and remains governed by Virginia law on default. Or, it is equally likely that an agreement’s force majeure provisions are silent as to, or are unclear about, whether a pandemic such as COVID-19 is covered by the clause. In either case, Virginia case law does provide some insight as to the likelihood of success of a claim of Impossibility of Performance arising from government directed action and/or economic stress.

Change in Domestic Law

A “change in domestic law” is among the recognizable factors that may qualify as a basis for an “Impossibility of Performance” defense. The Circuit Court of Fairfax County has held that “it is generally accepted that government action may emanate from any level of government and technical distinctions between law, regulation, order and the like are disregarded.” If the performance of the contract has been adversely affected by any state or federal regulation, precisely such as Executive Order 53, which in some instances carries with it a criminal penalty, there may well be a valid defense. For example, if you have a contract to hold a large party at a local restaurant, that contract may be impossible for the restaurant to comply with as a matter of law.

Illness

Illness is also a recognized factor that may permit an impossibility defense or justifiable delay. If personal performance by you is required, or if an illness has caused quarantine of your place of business at which performance is required, this may also trigger a valid defense to a contract claim. Note, though, the law will usually require performance, even delayed performance, if it is eventually possible. It remains unclear whether a voluntary quarantine will be considered an ‘illness’ justifying contract delay, but these arguments will most certainly be raised and subject to litigation.

Change in Character

Virginia law has recognized that where performance of the contract becomes impossible due to the fortuitous destruction or ‘change in character’ of something to which the contract is related, failure of performance may be excused. This factor is a bit more difficult to provide concrete examples, but if the very purpose of the contract has been effectively rendered worthless or impossible because of the substantial changes in behavior due to pandemic, the contract performance may be excused as a matter of law.

Conclusion

As with most civil disputes, if there is a way for parties to work out a reasonable resolution to any performance delay, or an agreement as to a contract’s completion, this is always the preferable result. Landlords should be encouraged to actively discuss realistic temporary lease revisions with tenants. Since most landlords have lender financing on their properties, there are limits on what a landlord can do to assist a struggling tenant and still maintain compliance with its loan covenants. We are working with our landlord clients to assist in the review of the loan documents and come up with solutions to satisfy both lenders and struggling tenants. There are also a number of items to include in any lease amendment that protects the landlord now and in the future if they decide to offer tenants rent abatements and/or relaxations of certain lease covenants. Likewise, in purchase contracts, both sides should reasonably expect minor extensions in closing timelines, and owners and builders should understand that construction timelines may well be affected by the pandemic.

As shown above, the legal landscape is evolving rapidly as both governments and the courts struggle to deal with this pandemic and its impact on our economy. Our lawyers are making every effort to stay on top of it. There are a number of steps our clients can take to improve their legal positions under existing contracts and we would be pleased to assist and discuss your options.

 

For any litigation matters, please contact:
(703) 680-4664

Families First Coronavirus Response Act & Unemployment Insurance Procedures

Posted on by Brigitte Flores

Employees of Private Employers With Fewer Than 500 Employees and Most Governmental Entities Obtain Expanded Leave, Paid Sick Leave

“Families First Coronavirus Response Act,” (H.R. 6201) Passed March 18, 2020

If you are an employer with fewer than 500 employees, you are likely going to be required to provide paid leave to employees who are unable to work because of certain circumstances relating to the Coronavirus pandemic. Employers should be prepared to implement these requirements on or before April 2, 2020.

WHO: Employers with fewer than 500 employees and governmental employers must provide employees with expanded leave which modifies the Family Medical Leave Act (FMLA).

Expansion of Family Medical Leave Act: Coronavirus Emergency Leave Protection

ELIGIBILITY: Employers must provide up to twelve (12) weeks of job-protected leave under the FMLA for employees who are unable to work or telework because they have to:

  1. Provide care for child younger than 18 whose school or day care has closed in response to the coronavirus (Employees providing care for a child whose day care or school has closed would be eligible for 2 weeks of unpaid leave and up to an additional 10 weeks of paid leave (payable at a rate that is not less than two-thirds the employee’s regular rate of pay up to a maximum of $200 a day, $10,000 aggregate cap).

For these employees, the first 10 days of leave can be unpaid, however, employees can choose to use vacation days, personal leave or other available paid leave (see below).

REQUIREMENTS: This leave protection requires that the employee return to the same position at the conclusion of the leave for the public health emergency. If the employer is unable to immediately reinstate the employee to the same job due to job cuts and/or the position is no longer in existence, the employer must make “reasonable efforts” to reinstate the employee during the year following the conclusion of the leave. This leave is required for any employee who has been employed for 30 days.

EXCEPTIONS: Employers with fewer than 25 employees do not have to restore employees to their previous positions.

The legislation goes into effect on April 2, 2020 and expires Dec. 31, 2020.

Paid Sick Leave: Coronavirus Emergency Paid Sick Leave

WHO: Employers with fewer than 500 employees and governmental employers must provide employees with temporary paid sick time. Employees must be allowed to use this additional paid sick leave before using any other paid leave benefits.

ALLOTMENT: The duration and amount depends on whether the employee is full time or part time. For a full-time employee, the employer is required to provide 80 hours (2 weeks) of paid sick time for specific circumstances related to COVID-19. For a part-time or hourly employee, employer-provided paid sick leave would be the hours the employee is scheduled to work (on average) in a two-week period. For a variable-hour employee, the Act provides for a calculation based upon historical work or anticipated work. All employees are eligible no matter how long they have been employed.

RATE: The rate of pay depends upon the reason for the employee’s absence. For absences based upon the employee’s condition, paid sick leave must be paid at the employee’s regular rate. For absences based upon a family member’s situation, pay will be no less than two-thirds of the employee’s regular rate.

ELIGIBILITY: Emergency paid sick leave is for an employee who is unable to work or telework because the employee:

  1. Is subject to a coronavirus-related government order to go under quarantine or isolation
  2. Has been advised by a healthcare provider to self-quarantine due to concerns related to coronavirus
  3. Is seeking a medical diagnosis where the employee is experiencing symptoms of coronavirus
  4. Is caring for an individual for whom quarantine or isolation is required
  5. Has children whose school or place of care has closed or the child care provider is unavailable due to coronavirus precautions
  6. The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and Department of Labor

CAPS: There are caps on the amount of payments under this new sick leave (sick leave will not exceed $511 per day based on the applicant’s regular wage or the applicable minimum wage, whichever is greater, if used for 1-3 and not exceed $200 per day based on the applicant’s regular wage or the applicable minimum wage, whichever is greater, if used for 4-6).

EXCEPTIONS: The Act includes an important exception for certain employers. Employers of healthcare providers or emergency responders may elect to exclude those employees from emergency paid sick leave.

OTHER: The Act authorizes the Labor Department to issue regulations to:

  1. Exclude certain healthcare providers and emergency responders from paid leave benefits
  2. Exempt small businesses with fewer than 50 employees from the paid leave requirements

Workers under a multiemployer collective bargaining agreement and whose employers pay into a pension plan will also have access to paid leave.
There is no payout requirement for any paid sick time that is not used at the time of any employee’s termination, resignation, or retirement.

The legislation goes into effect on April 2, 2020 and expires Dec. 31, 2020.

Payroll Tax Credits: Sick Leave Credit and Family Leave Credit

To help small businesses cope with the impact of the coronavirus pandemic, the Act provides for two payroll tax credits. It is critical to note that these credits are only available to employers with fewer than 500 employees.

Sick leave credit — not to exceed $511 per employee per day. This credit is designed to assist with the cost of providing up to two weeks of paid coronavirus-related sick leave to employees. The credit is limited to 10 days and is in effect for wages paid through December 2020. In addition, the employer cannot use this credit in connection with wages for which the employer is already receiving the employer credit for paid family and medical leave, under a provision previously enacted by the Tax Cuts and Jobs Act (TCJA). On a quarterly basis, the credit is limited to the total taxes imposed on the employer portion of the Social Security payroll tax and is refundable in certain circumstances.A similar credit is available to self-employed individuals, amounting to the lesser of their average daily self-employment income, or $511 per day, if caring for themselves or $200 if caring for a family member. The credit is limited to 10 days.

Family leave credit — not to exceed $10,000 per employee. This credit is designed to compensate employers for providing paid coronavirus-related family leave to employees as separately required under the Emergency Family and Medical Leave Expansion Act. Similar to the sick leave credit, this credit is also limited to the employer portion of the Social Security payroll tax on a quarterly basis but is refundable in certain circumstances.

The Act instructs the Treasury Department to issue guidance on documentation requirements. Until such guidance is issued, taxpayers should track the following information:

  1. Each employee requesting sick leave due to the COVID-19 virus; document whether the employee is caring for themselves or a family member
  2. Compute employee wages compared to the requisite $511 or $200 per day in order to determine the actual amount of the credit

Be prepared to supply such information as part of quarterly payroll tax return or annual income tax return filings.

Virginia’s Unemployment Insurance Procedures in
Response to Coronavirus

The Commonwealth of Virginia just this past week relaxed standards for Virginian’s to be eligible for unemployment benefits including when they are working reduced hours if their earnings qualify. Also there is now no waiting period before benefits kick in.See the below a Q&A excerpt from the Virginia Employment Commission (VEC) website. With the rapid changes the VEC is advising regularly checking on status updates.

Q. When should I file a claim for unemployment compensation benefits?

A.  You should file your claim online (**preferred method) through our Website at vec.virginia.gov after you have been out of work at least 1 full day. If you do not have access to a computer, you can file your claim through our Customer Contact Center by calling 866-832-2363 Monday through Friday 8:15am to 4:30pm. Your claim will be effective Sunday of the week in which you submit your on-line application or file through our Customer Contact Center.

Q. My hours have been reduced. Can I apply for unemployment compensation benefits?

A. You can file due to a reduction in hours. If your gross earnings are less than your weekly benefit amount. Currently, the maximum weekly benefit amount in Virginia is $378.

Q. What happens after I complete my unemployment insurance application?

A.  Once your claim is processed by the VEC, you will receive three important documents. The Benefit Rights document explains eligibility requirements and what you need to do each week to claim your benefits. The Monetary Determination document shows how much money you may be eligible to receive. You will also receive a PIN. You need the PIN to claim weekly benefits and to make inquiries about your claim.

Q. How much money will I qualify to receive?

A.   Depending on your earnings, your benefit amount may range from a minimum of $60 per week for 12 weeks to a maximum of $378 a week for 26 weeks. (Refer to your Monetary Determination)

Q. How soon before I can expect a benefit payment?

A.   Beginning with claims effective March 15, 2020, Governor Northam has directed that the one week waiting period and the requirement to conduct a weekly job search both be suspended for those receiving unemployment insurance benefits. If you are eligible for benefits, a payment should be processed shortly after you claim your first full week. You will need to refer to the Benefit Rights document for instructions on claiming weekly benefits.

 

 

Contact Us
For any employment matters, please contact:
Wendy A. Alexander
Employment Law Attorney
walexander@thelandlawyers.com
(703) 680-4664

Church & Market Project in the Heart of Leesburg’s Historic Downtown Approved

Posted on by Brigitte Flores

Church & Market

In a land use approval that will bring new vitality and high quality mixed-use architecture to Leesburg’s Old and Historic District, the Leesburg Town Council recently approved an application known as “Church & Market.” This application features 116 rental multi-family units, 11,500 square feet of office space, 3,000 square feet of retail/restaurant space, and a 2,300 square foot “maker space” with a 169-space structured parking facility integrated into the building. The Church & Market project features architecture designed by Torti Gallas + Partners that received its final certificate of appropriateness last month following detailed review by the Leesburg Board of Architectural Review.

Loudoun Office Managing Shareholder Randy Minchew and Christine Gleckner, Senior Land Use Planner, shepherded the application through the Town’s detailed application processes on behalf of the developer, L4 Capital Partners. The new building will be located in the heart of Leesburg’s Old and Historic District in the underutilized surface parking area behind the historic buildings at the southeastern quadrant of Market Street (Rt. 7) and King Street (Rt. 15). As such, the massing of the project is significantly reduced and is shielded by the historic frontage buildings that remain unchanged. This signature building is the first multi-family rental building built in the Historic District and its uses will add to Leesburg’s vibrant downtown featuring some of Northern Virginia’s finest restaurants, micro-breweries, and wine bars.

Walsh, Colucci, Lubeley & Walsh Named a 2020 “Best Law Firm”

Posted on by The Land Lawyers

U.S. News Media Group and Best Lawyers in America® named Walsh, Colucci, Lubeley & Walsh a 2020 “Best Law Firm” based on performance ratings from clients and peers. This is the tenth consecutive year the firm has been included on the regional list and the ninth consecutive year on the national list.

The ranking, presented in tiers, named Walsh, Colucci, Lubeley & Walsh a first-tier law firm in the Washington, D.C. area for Land Use & Zoning Law, Litigation – Land Use & Zoning, Litigation – Municipal, Litigation – Real Estate, Municipal Law, and Real Estate Law. The firm was named to Washington, D.C. area’s second tier list in Business Organizations (including LLCs and Partnerships), Closely Held Companies and Family Businesses Law, and Commercial Litigation.

In addition to the regional tier rankings, Walsh, Colucci, Lubeley & Walsh was also included in the national rankings. The firm was listed in the first tier list for Land Use & Zoning Law and Litigation – Real Estate. The firm was also listed under the second tier list under Commercial Litigation and Real Estate Law.

About Best Law Firms

The U.S. News – Best Lawyers® “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their fields, and review of additional information provided by law firms as part of the formal submission process. A full listing is posted online.

COVID-19 Update

Posted on by The Land Lawyers

Dear Clients, Colleagues, and Friends:

Our Firm’s main goal is to keep our employees and community safe while being responsive to our clients.

For the past several days, we have all been navigating the quickly-evolving landscape caused by COVID-19. We are monitoring all updates and following the health recommendations provided by the CDC, as well as our local and state officials.

Effective immediately, all Firm offices will be operating on a virtual basis until further notice. We are limiting office visits to employees only, and will be fully available via phone and email during the regular work hours. Contact information for individual attorneys, including direct dial numbers, may be found on our Professionals page. Our receptionist/front-desk office phone lines will continue to be available for calls during the hours of 9:00 a.m. to 3:00 p.m.

We will of course keep in contact with clients about ongoing and new matters.

With all good wishes,

Walsh, Colucci, Lubeley & Walsh

Erin Moore Thiebert Named Shareholder

Posted on by The Land Lawyers

Walsh, Colucci, Lubeley & Walsh is pleased to announce that real estate transactions attorney Erin Moore Thiebert has been named a shareholder of the Firm effective January 1, 2020.

Erin is recognized as a leader in real estate law and of her community. She is a dedicated member and former president of the Northern Virginia Building Industry Association’s (NVBIA) Women in the Building Industry Committee (WBI). WBI’s mission is to promote career advancement and leadership skills of women in the building industry and to ultimately increase the number of women in leadership.

“We are very fortunate to have Erin Thiebert on our team, and it is with great pleasure that we are naming her a shareholder of the Firm,” said managing shareholder Dave Bomgardner.  “Erin combines her knowledge of the development industry with real estate law to provide clients with the expertise needed to deal with complex transactions matters.”

Erin joined the Firm in 2013 to continue her established practice in commercial and residential real estate development transactions. Erin advises her clients in the preparation, negotiation and interpretation of development agreements, purchase and sale contracts, leases, loan documents, and subdivision and easement deeds.  Her assistance includes all aspects of a contract’s timeline, including review of due diligence and title matters, through assistance with closing, and post-closing obligations, including preparation of community association documentation.

Employee Spotlight: Lauren Riley

Posted on by The Land Lawyers

Lauren Riley first joined the firm in 2017 as a summer associate. She rejoined the Firm in 2019 and works in the Land Use and Zoning practice group in the Arlington office. She primarily focuses on securing zoning and land use entitlements including rezonings, special permits, and special exceptions. Before joining the firm, Lauren worked for the general practice law firm of Walton & Adams, P.C., where she gained valuable experience in eminent domain practice, zoning and land use research, and civil litigation. Lauren earned a Bachelor of Arts Degree from the University of Alabama in 2015, and graduated from William & Mary Law School in 2018 where she was an articles editor for the William & Mary Business Law Review.

While in law school, Lauren was a summer associate for the Firm and for the City of Hampton Attorney’s Office. She also served as a research assistant to Professor Lynda L. Butler, working on global land use and environmental research.

In this month’s Employee Spotlight, we will learn a lot more about Lauren.

Thank you for participating in this month’s Employee Spotlight, Lauren! Tell us a little about yourself — where did you grow up?

I grew up in rural Alabama (next to a farm) until I was ten, when I moved to a suburb of Birmingham, AL.

What did you think you wanted to be when you were younger?

I thought I wanted to be a forensic scientist. I later discovered that I was terrible at math and not much better with science, so then I became more interested in being a lawyer.

What interested you about the legal field, specifically land use law?

In the legal field you get to be creative and use your analytical skill set while also helping people at the same time. Land use is so interesting because it’s a unique subset of law where you are able to work with multiple parties to help create and contribute to vibrant communities.

What aspect of your role do you enjoy the most?

I most enjoy collaborating with my colleagues on any given issue. Being able to come up with creative solutions to land use problems is very rewarding.

Aside from a very busy schedule, what do you like to do for fun outside of work?

I’m a bit of a homebody, so I mostly enjoy hanging out with my family, watching movies and tv. I also like to bake and there’s always a new recipe to try out.

Where have you traveled most recently?

Last September I was able to go on a week-long trip to Keystone, Colorado. We spent most of our time hiking. The Rocky Mountains were beautiful!

What is your favorite show at the moment?

I recently started watching Westworld and have been binge-watching it since. It’s such an interesting show that explores philosophies of consciousness and complex themes about technology and humanity, while being incredibly thrilling and genre-bending at the same time.

Why do you think Walsh, Colucci, Lubeley & Walsh is a great place to work?

WCL&W is a great place to work because of the community here. Everyone is extremely nice and helpful. They will often drop what they’re doing to answer a question or help you with an issue you’re stuck on.

Thank you, Lauren!

Buying and Selling Nutrient Credits in Virginia

Posted on by Brigitte Flores

Nutrient Credits

Since the enactment of the Chesapeake Bay Watershed Nutrient Credit Exchange Program in 2005, developers have had the opportunity in certain circumstances to purchase nutrient credits to satisfy state and local stormwater runoff requirements.  This article gives a brief overview of nutrient credits and the implementation of nutrient credit programs.

What are “nutrient credits”?

A “nutrient credit” is a single, quantifiable, and certified unit of improvement to the environment.  Each credit represents a specific amount of absorption of nutrients within a sub-watershed.  Local governments and the Virginia Department of Environmental Quality (“DEQ”) have created nutrient credit programs.  Sellers of nutrient credits obtain certifications from DEQ to protect their lands, known as “nutrient credit banks”, from future development, and in return are able to offer credits for sale to offset the impacts development has on stormwater runoff.

How does purchasing nutrient credits help to preserve the Chesapeake Bay?

Since stormwater runoff contains high levels of phosphorus, proposed developments are required to provide stormwater absorption on the parcel being developed, which must be sufficient to absorb the stormwater runoff affecting the development.  Otherwise, stormwater runoff could flow to various ecosystems within the Chesapeake Bay Watershed, where the high level of nutrients in the stormwater could be detrimental to the ecosystems where they are ultimately absorbed.  For development sites which cannot meet the absorption requirements on-site, the purchase of nutrient credits created pursuant to an approved plan enables a developer to certify to the locality and the DEQ that it is providing alternative measures to preserve the balance of phosphorus and nitrogen within the local sub-watershed.

Where do interested parties obtain nutrient credits?

Regulators require developers to purchase nutrient credits from sellers located within the same sub-watershed as the proposed development.  The DEQ maintains a list of approved nutrient credit sellers, which is revised periodically as nutrient credit banks are created, nutrient credits within a bank are sold, and nutrient credit banks are removed for falling short of regulatory requirements.

How can Walsh, Colucci, Lubeley & Walsh help?

Whether you are intending to purchase or sell nutrient credits, wetlands credits, or stream credits, all of which follow specific regulatory frameworks, you can consult with a member of our transactional team to review the terms of the deal and for compliance with applicable regulations.