We recommend that the following measures be taken by a company affected by the Corona crisis:
1) Putting together a response team with members of different areas of the company (production, supply, commercial, corporate, legal) responsible to centralize information and decisions and coordinate the effects and actions in connection with this crisis;
2) Preparing an emergency plan to operate during this crisis; identifying costs that can be eliminated according to the escalation of the crisis;
3) Confirming what are the city and state regulations issued in connection with the COVID-19 that may affect the conduction of your business and be sure to be in compliance with them. For instance, in São Paulo State, retail stores, restaurants, bars and related commerce activities should shut down the face-to-face service and only provide services online or in the delivery scheme;
4) Confirming the better way to organize its employees. For instance, verify the possibility to implement the remote working or the grating of vacation, anticipating holidays or/and grating periods of rest due to any overtime provided in the past (through a “Bank of Hours” scheme);
5) Orienting the employees how to deal with the crisis outside the company’s premises, for instance: what to do in case of suspicion of the disease or contact with someone who was diagnosed with COVID-19, methods of hygiene and places to be avoid.
6) Renegotiating contracts in order to avoid a default and/or minimize the impact of a termination of a commercial relationship or suspension of the obligations and/or payment. The Brazilian law allows the rebalance of an obligation if it becomes very expensive for one of the partied due to extraordinary and unpredicted facts.
7) Avoid termination of the contract and, if necessary, suspend the fulfillment of obligations and/payments, by giving proper prior notice to the other party. Remember that the situation is temporary and after the Corona crisis has gone, the company will need to proceed with its business and commercial partnerships.
8) Companies should be in close contact with external counsel in order to plan in advance the effects of any such steps and to be prepared in time to reach the Judiciary to obtain any temporary injunctions as necessary to protect their business.