Client Alert: Is Your Business an "Essential Business" during Your State's Shutdown?

Date: March 23, 2020
To date, the governors of a growing number of states have issued orders implementing a variety of state-wide “shutdown” measures intended to slow the spread of COVID-19.  Such orders vary from state to state and range from limiting certain gatherings and activity (including the closure of select businesses) to a full “shelter in place” order.

Most recently, the governors of Delaware (two orders on March 22, 2020) and Maryland (March 23, 2020 Order), have issued shutdown orders for their respective states.  These orders follow statewide stay-at-home orders implemented in New York, Ohio, California, Kentucky, Louisiana and Illinois.  A number of cities and municipalities have issued similar local orders.

Each state exempts certain “essential businesses” from its shutdown order.  We have received inquiries from several clients about how to determine whether they are engaged in an “essential business.” The actual text of the applicable order of the governor typically provides the relevant guidance. For example, in Delaware, Essential Activities (the term used in Modification 5 to the Declaration of a State of Emergency, dated March 22, 2020) includes activities “essential to [individuals’] health and safety, or to the health and safety of their family or household members.”  In Maryland, on March 23, 2020 the Office of Legal Counsel issued guidance with respect to their recommended interpretation of the Maryland shutdown order.

Additionally, these declarations may reference federal guidance regarding essential functions, such as identified by Gov. Larry Hogan of Maryland during his March 23, 2020 press conference in which he mandated the shutdown of all non-essential businesses in Maryland. On March 19, 2020, the Cybersecurity & Infrastructure Security Agency of the U.S. Department of Homeland Security published a Memorandum on Identification of Essential Critical Infrastructure Workers During Covid-19 Response (the “CISA Memo”). You should review the CISA Memo and related website to determine whether your business activities come within the meaning of a critical industry. These include, but are not limited to:
  • Healthcare and Public Health: Healthcare workers, caregivers, healthplan workers and pharmacy employees.
  • Food and Agriculture: Grocery store workers, restaurant workers including carryout and delivery.
  • Energy: Workers to maintain and ensure the generation and distribution of electricity.
  • Defense Industrial Base: Workers who support the essential services required to meet national security commitments to the federal government and U.S. Military.

Please note that you should not rely on the CISA Memo unless the applicable order in your state provides that it is incorporating those definitions, because the CISA Memo states that “this list is advisory in nature. It is not, nor should it be considered to be, a federal directive or standard in and of itself.” This means that, by its terms, the CISA Memo does not supersede state and local government action.

We are available to answer questions you may have about whether your business is subject to the shutdown applicable to your state.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.