By Rachel Seaton Brownell, Jason R. Stanevich, Maura A. Mastrony, and Dylan Porcello on
March 22, 2020
Note: Because the COVID-19 situation is dynamic, with new governmental measures each day, employers should consult with counsel for the latest developments and updated guidance on this topic.
In response to the COVID-19 pandemic gripping the nation, Governors Andrew Cuomo (NY), Phil Murphy (NJ) and Ned Lamont (CT) have mandated that all non-essential businesses cease operations and/or have the majority, if not all, of their workforces either telework or work from home. The governors’ actions were motivated by the same objective, but are being carried out in slightly different ways.
While each state has issued several orders pertaining to the pandemic, this article addresses the states’ directives pertaining to the closures and limitations placed on businesses. New York, New Jersey, and Connecticut had previously closed schools, restricted social gatherings, closed bars and restaurants to all services except takeout and delivery, and closed other recreational and entertainment venues. The most recent orders issued by each state pertain to the additional closures and restrictions placed on businesses and workplaces.
On March 20, 2020, New York Governor Cuomo announced in a televised address and corresponding press release his 10-Point Policy that Assures Uniform Safety for Everyone. New York State on PAUSE, as the governor refers to it, includes a mandate that all non-essential businesses in the state must reduce their in-person workforce at any work locations by 100% effective Sunday, March 22 at 8 p.m. and until April 19, 2020. Codified in Executive Order 202.8, this mandate comes just days after Executive Orders 202.6 and 202.7, and supersedes them, as these orders required an in-person workforce reduction to 50% and 25% of the workforce for non-essential businesses, respectively. This mandate also follows the prior closure directives:
- Executive Order 202.3 – Closure of all restaurants and bars (except for take-out or delivery); any facility authorized to conduct video lottery gaming or casino gaming; any gym, fitness centers or classes; and movie theaters, effective as of March 16, 2020, at 8 p.m.
- Executive Order 202.4 – Closure of all schools for two weeks, effective from March 18, 2020, until April 1, 2020.
- Executive Order 202.5 – Closure of all indoor common portions of retail shopping malls and all places of public amusement, whether indoors or outdoors, effective as of March 19, 2020, at 8 p.m.
- Executive Order 202.7 – Closure of barbershops, hair salons, tattoo or piercing parlors and related personal care services effective as of March 21, 2020, at 8 p.m.
Initially set forth in Executive Order 202.6, Governor Cuomo directs all businesses and not-for-profit entities to close or operate entirely through telecommuting or working from home except “any essential business or entity providing essential services or functions shall not be subject to the in-person restrictions.” These businesses are defined to include:
- Essential Health Care Operations;
- Essential Infrastructure;
- Essential Manufacturing;
- Essential Retail;
- Essential Services;
- News Media;
- Financial Institutions;
- Providers of Basic Necessities to Economically Disadvantaged Populations;
- Essential Services Necessary to Maintain the Safety, Sanitation and Essential Operations of Residences or Other Essential Businesses; and
- Vendors that Provide Essential Services or Products, including Logistics and Technology Support, Child Care and Services.
The New York State Department of Economic Development has issued further guidance on the scope of businesses deemed essential. In addition, businesses with only a single occupant/employee are deemed exempt.
The state website provides, “With respect to business or entities that operate or provide both essential and non-essential services, supplies or support, only those lines and/or business operations that are necessary to support the essential services, supplies, or support are exempt from the restrictions.” Governor Cuomo also announced on his Twitter feed that essential services businesses that are permitted to remain open and not subject to a 100% in-person workforce reduction must implement rules that help facilitate social distancing of at least six feet.
Pursuant to Executive Order 202.6, a business that does not fall into one of the exemptions may request an opinion from the Empire State Development Corporation as to whether it can be deemed essential and remain open. Requests for designation as an essential business can be made here.
Further, in Executive Order 202.5, Governor Cuomo expressly precluded any localities from issuing any local emergency or executive orders without the approval of the State Department of Health.
Any business that violates the Executive Order concerning the non-essential business closures could be held liable for the violation of an order pursuant to Section 12 of the State Public Health Law, which provides for (a) civil penalties of up to $2,000 for every violation; (b) which may be increased to up to $5,000 for a subsequent violation where the person committed the same violation within 12 months of the initial violation; (c) which could then be increased to up to $10,000 if the violation results in serious physical harm to any patient. At a Press Conference on March 20, New York City Mayor Bill de Blasio and New York City Police Department Commissioner Dermot Shea stated that the NYPD will be enforcing the state’s Executive Order.
On March 21, 2020, Governor Murphy issued Executive Order 107 with the message that New Jersey citizens must “Stay At Home,” with limited exceptions. In that Order, in addition to limiting the reasons for which New Jersey residents could leave their homes, Governor Murphy directs the closure of many businesses, effective March 21, 2020, at 9 p.m.
Specifically, Executive Order 107 directs the closure of the brick-and-mortar premises of all non-essential retail businesses as long as this Order remains in effect. Essential retail businesses are excluded from this directive and may remain open during their normal business hours. Where practicable, however, essential retail businesses must provide pick-up services outside or adjacent to their stores for goods ordered in advance online or by phone. The list of essential retail businesses includes:
- Grocery stores, farmer’s markets and farms that sell directly to customers, and other food stores, including retailers that offer a varied assortment of foods comparable to what exists at a grocery store;
- Pharmacies and alternative treatment centers that dispense medicinal marijuana;
- Medical supply stores;
- Retail functions of gas stations;
- Convenience stores;
- Ancillary stores within healthcare facilities;
- Hardware and home improvement stores;
- Retail functions of banks and other financial institutions;
- Retail functions of laundromats and dry-cleaning services;
- Stores that principally sell supplies for children under five years old;
- Pet stores;
- Liquor stores;
- Car dealerships, but only to provide auto maintenance and repair services, and auto mechanics;
- Retail functions of printing and office supply shops; and
- Retail functions of mail and delivery stores.
While the above listed retail businesses are deemed essential and are accordingly able to remain open, those businesses are required to abide by social distancing practices to the extent practicable by keeping customers six feet apart and engaging in the frequent sanitizing of common surfaces.
In addition, Executive Order 107 reinforces the closures of recreational and entertainment businesses that Governor Murphy had previously included within Executive Order 104 and his addresses thereafter:
- Casino gaming floors, including retail sports wagering lounges, and casino concert and entertainment venues;
- Racetracks, including stabling facilities and retail sports wagering lounges;
- Gyms and fitness centers and classes;
- Entertainment centers, including but not limited to, movie theaters, performing arts centers, other concert venues, and nightclubs;
- Indoor portions of retail shopping malls;
- All places of public amusement, whether indoors or outdoors;
- Facilities where personal care services are performed and public and private social clubs; and
- All municipal, county, and state public libraries, and all libraries and computer labs at public and private colleges and universities.
Executive Order 107 also reinforces that all restaurants and bars may continue to operate their normal hours, but only through food delivery and/or take-out services.
Executive Order 107 further requires that all businesses, whether open or closed to the public, must use telework or work-from-home arrangements wherever practicable. To the extent employees cannot telework/work from home, the business should make best efforts to reduce on-site staff to the minimal number necessary to ensure essential operations can continue. The non-exhaustive listed examples include cashiers, store clerks, warehouse workers, and “certain administrative staff.”
Governor Murphy also signed Executive Order 108, which invalidates any county or municipal restriction that conflicts with any of the provisions of Executive Order 107. Municipalities are permitted, however, to govern the: (1) online marketplaces for arranging or offering lodging and (2) municipal or county parks.
Retail businesses or operations that have not been identified as essential pursuant to Executive Order 107 may submit a request to the State Director of Emergency Management, who is the Superintendent of State Police.
As set forth in Executive Orders 104 and 107, penalties for non-compliance with these Orders may be imposed under, among other statutes, N.J.S.A. App. A:9-49 and -50, which could result in a conviction of a disorderly persons offense, a term of imprisonment of up to six months, and a fine of up to $1,000.00.
On March 20, 2020, Connecticut Governor Ned Lamont issued Executive Order No. 7H, primarily to close all non-essential businesses. This order follows several other executive orders issued since March 10, 2020. For instance, these orders have already been issued in Connecticut:
- Executive Order No. 7C canceled classes in public schools for at least two weeks.
- Executive Order No. 7D restricted social and recreational gatherings to fewer than 50 people, closed bars and restaurants to all services except food and non-alcoholic beverage takeout and delivery and closed gyms, fitness, centers and movie theaters.
- Executive Order No. 7F ordered the closure of large shopping malls, and places of public amusement.
- Executive Order No. 7G ordered the postponement of the presidential primary and suspended non-critical court operations.
Executive Order No. 7H, which goes into effect on March 23, 2020, at 8:00 p.m. and lasts until April 22, 2020, unless modified, continues the trend of implementing protective measures to combat the spread of COVID-19 by restricting the operation of businesses and not-for-profit entities. The main aspects of this Order are as follows:
- All businesses and not-for-profit entities in the state are required to employ, to the extent possible, any telecommuting or work-from-home procedures that they can safely employ.
- Non-essential businesses or not-for-profit entities must reduce their in-person workforces at any workplace location by 100%.
- The order exempts from the in-person restrictions any “essential businesses or entity providing essential goods, services or functions.”
The issue is, of course, which businesses constitute “essential businesses”? The Order first states that by 8 p.m. on March 22, 2020, the Department of Economic and Community Development (DECD) will issue binding guidance about which businesses are essential. The Order lists, however, several categories of businesses to be considered “essential businesses”:
- The 16 critical infrastructure sectors as defined by the Department of Homeland Security (https://www.cisa.gov/critical-infrastructure-sectors);
- Essential healthcare operations, including hospitals, clinics, dentists, pharmacies, elder care, and home health care workers;
- Companies involved in the research and development, manufacture, distribution, warehousing and supplying of pharmaceuticals, biotechnology therapies, health care data, consumer health products, medical devices, diagnostics, equipment, services, and any other healthcare-related supplies or services;
- Essential infrastructure, including utilities, wastewater and drinking water, telecommunications, airports, and transportation infrastructure;
- Manufacturing, including food processing, pharmaceuticals, and industries supporting the essential services required to meet national security commitments to the federal government and U.S. Military;
- The defense industrial base, including aerospace, mechanical and software engineers, manufacturing/production workers, aircraft and weapon system mechanics, and maintainers;
- Essential retail, including grocery stores and big-box stores or wholesale clubs, provided they also sell groceries;
- Pharmacies, gas stations, and convenience stores;
- Food and beverage retailers (including liquor/package stores and manufacturer permittees) and restaurants, provided they comply with the previously issued orders, and any subsequently issued orders;
- Essential services, including trash and recycling collection, hauling and processing;
- Mail and shipping services;
- News media;
- Legal and accounting services;
- Banks, insurance companies, check cashing services and other financial institutions;
- Providers of basic necessities to economically disadvantaged populations;
- Vendors of essential services and goods necessary to maintain safety, sanitation and essential operations of residences or other essential businesses, including pest control and landscaping services; and
- Vendors that provide essential services or products, including logistics and technology support, child care and services needed to ensure the continuing operation of government agencies and the provision of goods, services or functions necessary for the health, safety, and welfare of the public.
The Order also provides a method by which a business not specifically set out in the Order or in the guidance to be issued by the DECD can obtain an exemption from the restrictions set out in the Order. The business must request an opinion from the DECD, which must determine whether it is in the best interest of the state to have the workforce continue at full capacity to properly respond to this emergency. Unlike New York and New Jersey, Connecticut’s Order does not include enforcement provisions or penalties for non-compliance.
Furthermore, Executive Order 7H mandates that municipalities may not enact or enforce any order that conflicts with any provision of the Order and expressly prohibits municipalities from issuing any shelter-in-place order or orders prohibiting travel unless written permission is received by the State’s Department of Emergency Services and Public Protection.
The latest Executive Orders from all three governors continue the trend of tightening restrictions on daily life in an attempt to keep people safe and stop the spread of the virus. While the approaches of the three governors vary somewhat, the net effect of each of these approaches is the closure of several businesses and the requirement that many businesses mandate working from home or telecommuting, if practicable.
Don’t miss any news or our updates on legislative developments – Sign up for our on-line magazine: https://mag.intlms.com/
This article only includes general information and IMS is not, by means of this article, rendering any tax, legal or other professional services. This communication should not be relied upon for any decision or action that may have an impact on your business. Prior to taking any action, you should be in contact with your advisor.