Legal Alerts

COVID-19 Response: Shelter-in-Place and Non-Essential Business Closure Orders – What Employers Need to Know Now, Part I

Los Angeles, Calif. (March 25, 2020) - On March 19, 2020, shortly after several California counties issued “shelter-in-place” orders, California Governor Newsom issued an Executive Order that, effective immediately, required all California residents to comply with the state Department of Public Health order requiring all residents to stay at home in an effort to slow or reduce the spread of the novel coronavirus (COVID-19). Since then, over 21 states and numerous other local jurisdictions have issued similar orders which restrict the movement of residents and/or close public or in-person operations of non-essential businesses (Orders). We anticipate this trend will continue in the hours and days to come. Based on published reports, these Orders effectively restrict the movement of one in four Americans. We are truly in unchartered territory.

Employers, already struggling under immense economic pressures, now face new and unprecedented questions regarding how these Orders will impact their operations and workforces. The urgency to obtain guidance is particularly acute in light of the new federal leave requirements under the federal Families First Coronavirus Response Act (the FFCRA) which will become effective April 1, 2020. Yes, you saw that date right. Notwithstanding that it was widely understood that FFRCA would become effective no later than 15 days after enactment, which would have been April 2, 2020, the DOL has published FAQs which confirmed the effective date will be April 1, 2020

To assist employers in their critical decision-making process over the next few hours, days, and weeks, this two part series will review some frequently asked questions businesses may have related to the Orders and how they may impact an organization’s leave management, furlough, and lay-off considerations. Part I of this alert will review the general framework of the Orders and will address how to determine whether your organization is exempt from the restrictions on non-essential businesses. Part II of the alert will review the leave management, furlough, and lay-off considerations facing employers in these challenging times.

As this situation is dynamic and we anticipate additional guidance from the United States Department of Labor (DOL), employers should continue consulting legal counsel for the latest legal developments and updated guidance.

Part I: Shelter-in-Place, Stay-At-Home, and Non-Essential Business Closure Orders

How Do I Know if an Order Applies to My Organization/Employees?

Thus far, the Orders generally fall into two categories: (i) Shelter-in-Place or Stay-at-Home Orders, which close public operations of non-essential businesses and generally restrict the movement of people; and (ii) Orders that are more narrowly tailored to business operations and either restrict, or require the closure of, non-essential businesses. The difference between Shelter-in-Place and Stay-at-Home Orders appears to be largely semantics with Stay-at-Home Orders trying to distinguish themselves from other shelter-in-place emergency orders where residents must shelter from storms or violent threats (e.g., active shooter). Regardless of the terminology, the state or local Orders will define the essential businesses or critical infrastructure sectors (CIS) that are exempt from the business closure requirements.

On March 19, 2020, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) published guidance to help state and local jurisdictions identify a list of Essential Critical Infrastructure Workers (ECIW) to identify and manage their essential sectors while responding to COVID-19.

Many (but not all) of the Orders refer to this guidance in defining the essential businesses and workers that are not subject to the shelter-in-place or business restriction/closure requirements or use such guidance to supplement their own defined essential businesses. 

As noted in the CISA guidance, the identified sectors and workers are not intended to be an authoritative or exhaustive list of critical infrastructure sectors and functions that should continue during the COVID-19 response. CISA may update the list as the response to COVID-19 continues. Accordingly, employers must review the applicable Orders and any related guidance and should continue to monitor developments from state and local officials as restrictions may change based on the status of the public health emergency. 

Whether a business is exempt (or should be exempt) from the Orders is very fact specific and requires the assessment of several issues, including, but not limited to:

  • Comparison of State and Local Orders. Unless the state Order pre-empts any local shelter-in-place order (e.g., New Jersey), employers will need to compare and contrast the state and local exemptions to determine what restrictions, if any, may be applicable. Orders vary and may subject an employer to inconsistent obligations not only within the state, but also across its multi-state operations.
     
  • Closure Versus Restrictions. Just because a business may fall under one of the non-essential businesses does not necessarily mean it must close its on-site operations. Depending on the Order, there may only be certain restrictions (e.g., dine in operations for restaurants).
     
  • Which Employees are Covered? It is not clear whether any applicable exception will apply to all workers employed by the critical infrastructure business or just the individuals listed on the ECIW that are essential to maintaining continuity of operations for the essential business. The intent of the Orders certainly would seem to support a narrow reading of any exception to the restriction of movement. As with many things these days, this may be a moving target.
     
  • Social Distancing Still Required. Even employers that are exempt from an Order must, to the extent possible, comply with social distancing and personal protective equipment (PPE) guidelines in their operations, to comply with the Orders and other obligations under OSHA.
     
  • Exemption Applications. Employers subject to an Order may have some recourse and can file for an exemption based on an employer’s specific business operations, the impact of any closure on a CIS (including sub-sectors and supply chains), and operational changes implementing social distancing which may mitigate any perceived health risk.

Do My Employees Have to Report to Work if They Are Not Subject to an Order?

If your employee falls under one of the essential business exceptions to the Order, it is likely that you can require your employee to report to work. This is subject, however, to any requirement to consider reasonable accommodations for an individual who may have health or safety concerns or who may qualify for other sick, school closure, or family leave under state and federal law (including FFCRA as of April 1, 2020). Employers that are exempt from an Order must still comply with all social distancing and other safety requirements the Order as well as under the Occupational Safety and Health Act (OSHA). Employers are prohibited from retaliating against employees who request leave, other accommodations, and/or raise good faith safety concerns.

With the rapid pace of legal and public health developments, employers may wish to consider creative solutions, such as unpaid leave or allowing an employee to use paid sick leave under state or local law for any preventative measure taken by an employee such as self-isolation (even if not technically required under state or local isolation orders). Given the complex web of legal requirements, it is wise to consult counsel before taking any adverse employment action against an employee who refuses to report to work. 

What Should I Do If My Business is Subject to An Order?

It depends. As noted above, although many of the Orders have a similar structure, how a business responds is fact-specific and may implicate all or only a portion of the business or workforce. While one of the goals of the Orders is to encourage telework, for many employers, remote work is not an option. Accordingly, employers are encouraged to consult with their counsel to evaluate compliance obligations and possible solutions, such as applying for an exception.

Part II of this alert addresses pressing leave management, furlough, and lay-off considerations employers are facing in light of business interruptions related to COVID-19 and the Orders, including application of paid leave under the FFCRA.

New Orders and related guidance are issued daily. Lewis Brisbois’ multi-disciplinary COVID-19 Attorney Response Team continues to monitor these developments and can assist businesses with assessing application of, and compliance with, these Orders. Stay tuned for additional posts that will review how suppliers to “essential” businesses can address the issue of whether they are “essential” under the various approaches that jurisdictions are taking. Visit our COVID-19 Response Resource Center to find an attorney in your area.

Authors:

Diane L. Waters, Partner

Meryl Mills, Partner

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