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Template Protections for Essential Businesses That Continue to Operate

Client Alert

Authors: Jeremy Heep, Angelo A. Stio III, William M. Taylor, Martha E. Guarnieri and Adam R. Martin

3/23/2020
Template Protections for Essential Businesses That Continue to Operate

Over the past seven days, our COVID-19 Task Force has developed significant experience across the nation assisting businesses with assessing whether they can and/or should remain open and, if so, under what circumstances in light of rapidly evolving and frequently changing federal, state and local orders and related guidance. The Task Force has helped numerous businesses (1) confirm from state authorities that they can remain open, (2) apply for an exemption to remain open, or (3) decide to close down operations, while maintaining a skeletal staff to perform critical functions.

The analysis of how to handle these important decisions is multidimensional and intensely fact-sensitive. Merely being allowed to operate does not end the analysis. Even if not ordered to shut down, each business must carefully consider many factors in deciding whether to remain open: public health, health and welfare of employees, reputation, protection of shareholders/investors/business partners, and exposure to potential liability. After an analysis of all factors and the attendant risks, some businesses choose to close or to operate remotely even if they are not required to do so.

If an order directs your business to shut down and you believe your business is an essential (sometimes known as life-sustaining) business or provides essential infrastructure, then you must apply for a waiver. Unless a waiver is granted, your entire work force should remain home in jurisdictions with shelter-in-place orders except as permitted by the order.

For those businesses that have decided to remain open, we recommend a three-pronged approach — in addition to carefully implementing health and safety measures and revised medical and sick leave policies, and minimizing the number of employees who physically report to work.

  1. If there is any doubt about whether the business is essential under the relevant order(s), it may be advisable to send a letter to the state authority explaining that the business has reviewed the order, believes that it fits within the description of an essential business, and therefore can continue to operate with appropriate precautions unless it is instructed otherwise. These letters are highly individualized and must explain in detail how and why the business is essential to the public at large and cannot otherwise perform its service or product production remotely. Because of the individualized nature of this letter, it is not possible to provide a template. It is important, however, that the letters are clear and conclude by inviting questions or discussion. For more information, see our March 21 client alert, “Is Your Business Essential? Guidance on Difficult Decisions in a Time of Uncertainty.”

  2. If businesses remain open, they should provide a letter to employees who are physically reporting to work that will serve as a sort of “hall pass” if they are stopped or questioned by local authorities. This is especially important in shelter-at-home jurisdictions, like New Jersey, New York, Philadelphia, Delaware and California, which essentially have 24-hour curfews. Travel to and from a permitted business is allowed, so this will assist the employees in explaining their whereabouts in case of any encounters. Click here for the template.

  3. Businesses choosing to remain open should provide instructions to management about how to handle encounters with local authorities, essentially recommending honesty, transparency and following orders. This will avoid confrontations and allow the company breathing room to decide whether to challenge the action in court. Click here for the template.

These are difficult decisions, but once a decision is made to remain open, these simple measures can provide some additional protection for your business.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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