By: Paul S. Thaler and Paul Felipe Williamson
Washington, DC, Maryland, and Virginia are among the growing number of jurisdictions that are implementing restrictive measures aimed at addressing the ongoing public health emergency caused by coronavirus (COVID-19). These restrictive measures evolve rapidly in an effort to keep pace with the spread of COVID-19. As recently as March 30, 2020, the DC Mayor and the Governors of the State of Maryland and the Commonwealth of Virginia issued new stay-at-home orders to augment or modify existing orders limiting residents’ daily activities outside of their homes, and curtailing non-essential business operations. These various orders have wide-reaching implications for businesses as well as for the professionals who serve them.
Understanding how to stay operational and financially sound, while complying with the ever-changing social and business-related restrictions should be of paramount concern to businesses in the DMV. This is especially true where businesses operate across multiple jurisdictions. Businesses in the area ought to be focused on understanding, among other things, whether your business qualifies as essential, non-essential, or otherwise qualifies for a waiver of the restrictions on non-essential businesses, whether your business has an adequate COVID-19 operational plan, what minimum business operations you may engage in if your business is deemed non-essential, and whether your business is in compliance with your jurisdictions temporary restrictive orders.
On March 30, 2020, the Mayor for the District of Columbia, Muriel Bowser, issued a stay-at-home order (DC Stay-At-Home Order), which serves to reinforce and supplement the Mayor’s prior March 24 order (the DC Order). The DC Order went into effect on March 25 and will remain in place through April 24. The DC Stay-At-Home Order went into effect on April 1, and will likewise be effective through April 24. The DC Order and the DC Stay-At-Home-Order impact the DC business community in a number of important ways, as they apply to all businesses with a presence in the District of Columbia. All businesses (both deemed essential and non-essential) must take “all reasonable steps necessary for employees to work remotely from their residences….” However, there are specific allowances and restrictions for all businesses in Washington, DC.
For those businesses deemed non-essential, the DC Order calls for the temporary cessation of all normal business activities that cannot otherwise be performed safely at home, and for the prohibition of any large gatherings in excess of 10 individuals. Businesses classified as non-essential by the DC Order include tour guides and touring services; gyms, health clubs, spas, and massage establishments; theaters, auditoriums, and other places of large gatherings; nightclubs; hair, nail, and tanning salons and barbershops; tattoo parlors; sales not involved in essential services; retail clothing stores; and professional services not devoted to assisting essential business operations.
While the DC Order requires non-essential businesses to effectively shutter their doors to the public, it does allow non-essential businesses to, among other things, engage in minimum business operations or the minimum necessary steps to secure the value of their business, implement telework and remote-work policies where possible, continue to process employee payroll and benefits, as well as take steps to implement delivery services where applicable. In conjunction with the DC Order requiring the temporary closure of on-site operations of non-essential businesses, the DC Homeland Security Emergency Management Agency (HSEMA) put in place a waiver process that a business may apply for if it does not fall within the list of essential businesses but otherwise provides goods or services necessary to maintain operations at an essential business. However, with the implementation of the DC Stay-At-Home Order, non-essential businesses or businesses that have obtained a waiver to continue operations from HSEMA now face additional restrictions above those put in place by the DC Order. The DC Stay-At-Home Order now subjects those non-essential businesses carrying out minimum business operations to provide their operational plan upon demand. This includes why a business is presently doing what it is doing, how its operations are being conducted, and whether that business is in compliance with the DC Order. Any business which fails to adhere to the DC Order and/or DC Stay-At-Home Order faces severe penalties including:
- Summary closure of the business
- Penalties of up to $1,000 per day, per site of violation
- Penalties of up to $5,000 per day, per site of operation after an order to close
Moreover, the ramifications for employees traveling to businesses deemed non-essential and found to be out of compliance with the DC Order and the DC Stay-At-Home Order may be significant. The DC Stay-At-Home Order notes that any individual who willfully violates the DC Stay-At-Home order may be guilty of a misdemeanor and, upon conviction, subject to a fine not exceeding $5,000, imprisonment for not more than 90 days, or both.
By contrast, essential businesses are encouraged to continue normal operations, subject to social distancing guidelines. Under the DC Order, essential businesses broadly include healthcare service providers; public health operations; public and private utilities; waste collection; purveyors of food and household products/services; social services; news, radio, and television outlets; financial services institutions; educational institutions for the sole purpose of facilitating social distance learning or conversion into public health facilities; transportation; construction; and professional service providers, including law firms, so long as the provision of professional services is in support of essential businesses or essential government functions.
The practical ramifications that the DC Order and the DC Stay-At-Home Order will have on business and professionals will be largely dependent on, and will require a careful examination of, the nature of the work a business is engaged in, and if that work is considered essential. For example, the DC Order provides a list of construction-related businesses that have been deemed essential. While this list is not exhaustive and omits references to several supplier trades integral to the proper functioning of certain specifically exempted trades, these businesses are arguably covered by the DC Order in its further exemption of construction and business trades that provide necessary services for maintaining the safety, sanitation, and operation of residences and essential businesses. Furthermore, the DC Stay-At-Home Order lists “construction” as an essential infrastructure for which residents are permitted to leave their homes to provide services for. Therefore, large swaths of the construction industry are considered essential. For a more complete account of construction-related impacts, please see our publication here.
This appears equally applicable to the realm of government contracting. The DC Order’s definition of essential government functions, not surprisingly, includes first responders, emergency management, 911/311 call centers, and law enforcement functions. However, it also includes any services required to provide for the health, safety, and welfare of the public, or the operation of government agencies, which services are performed by DC, the federal government, or their contractors. Accordingly, private contractors currently performing under a government contract are likely deemed as essential businesses so long as the work performed is reasonably attributable to the proper functioning of a DC or federal government agency or a service exempted under the DC Order. Therefore, businesses engaged in government contracting, as well as their supporting professionals, may be deemed essential based upon the services for which they have been contracted to provide.
Businesses must keep in mind that the DC Order provides for civil, criminal, and administrative penalties for any entity found to knowingly violate the restrictions of the various Orders. Businesses must also pay particular attention to their operational plans and whether they reasonably comply with the DC Stay-At-Home Order and the DC Order in order to avoid the current penalties facing non-essential businesses and their employees.
On Monday, March 30, 2020, the Governor for the State of Maryland, Lawrence J. Hogan, issued an amendment (the MD Stay-At-Home Order) to his March 23 executive order (the MD Order), which mandates the closure of all non-essential businesses, establishments, and facilities in Maryland, and went into effect on March 23. The amendment adds a general stay-at-home order for all Maryland residents that went into effect on March 30 at 8:00 PM. The MD Order will remain in effect until after the Governor’s office has terminated the state of emergency, and after it has rescinded the catastrophic health emergency declared on March 5. The MD Stay-At-Home Order’s mandates are an escalation from the Governor’s prior suggestion that all residents stay at home and that employers should promote work-from-home arrangements to the greatest extent possible.
Though the MD Stay-At-Home Order puts into place additional restrictions on the daily activities of Maryland residents, it exempts, with certain limitations, an individual’s travel to work. It also specifically calls for the closure of certain businesses, including senior centers, restaurants and bars, fitness centers, theaters, malls, and certain other recreational and other miscellaneous establishments. Like the DC Order, the MD Order divides businesses into categories: essential and non-essential. Maryland’s approach to categorizing businesses, however, is slightly different from DC’s. The MD Order relies upon the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency’s (CISA) list of critical infrastructure sectors to classify a business as essential or non-essential. If a business falls outside of this list, it is deemed non-essential. On March 23, however, the Office of Legal Counsel (OLC) issued interpretive guidance providing a non-exhaustive list of businesses that are deemed essential. Guidance has also come from the Governor’s office. For example, on March 28, a spokesman for the Governor’s office, Michael Ricci, stated, “We classified construction as essential in alignment with federal guidelines.”
For those businesses unsure of whether they qualify as an essential or non-essential business, the OLC has established guidelines for how businesses should proceed. Specifically, if a business is still unclear after a thorough review of the guidance provided by CISA and all interpretive guidance provided for by the OLC, it must make a good faith determination as to whether it is a non-essential business by considering:
- The purpose of the MD Order
- How similar businesses, organizations, and facilities are treated under the MD Order
The OLC goes on to note that, if a business decides to remain open pending more detailed legal advice, it must strictly adhere to all applicable guidance addressing social-distancing and environmental cleaning and disinfection. This is particularly important as any person who knowingly and willfully violates the MD Order is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding one year or a fine not exceeding $5,000 or both.
On March 30, 2020, the Governor for the Commonwealth of Virginia, Ralph Northam, issued an executive order containing a temporary stay-at-home order (the VA Stay-At-Home Order), which went into effect on March 30 and will remain in full force and effect until June 10. The Governor issued this order as an amendment to his March 23 executive order (the VA Order), which outlines temporary restrictions on the operations of restaurants, recreational entertainment, public gatherings, non-essential retail businesses, and the closures of K-12 schools. The VA Order, as it applies to non-essential businesses, went into effect on March 24, and, by virtue of the VA Stay-At-Home Order, will remain in effect until June 10, unless otherwise superseded. It is primarily concerned with the closure of all recreational and entertainment-related businesses/activities that would otherwise promote large gatherings of the general public or otherwise run afoul of social distancing guidelines. However, restaurants may still offer take-out and or delivery services.
Like the DC and MD Orders, the VA Order goes on to prohibit public or private gatherings that include more than ten individuals. Notably, this prohibition is specifically applied to retail outlets that are not listed as essential retail businesses, but it does not otherwise apply to businesses that have not been required to close their doors to the public. All other businesses not otherwise specifically listed in the VA Order, such as construction companies, may continue business operations, subject to social distancing guidelines provided by the Commonwealth and federal governments, as well as the Governor’s Stay-At-Home Order. Business operations offering professional services, however, such as law firms or and financial services firms, are encouraged to utilize teleworking as much as possible.
Effectively, if a business is not specifically identified for closure or identified as a non-essential business, it may continue operations uninterrupted, subject to social distancing and other guidelines set forth in the VA Order and the VA Stay-At-Home Order.
The ongoing public health emergency caused by COVID-19, and the drastic impacts resulting therefrom, continue to evolve by the day. As a result, novel problems will continue to arise for all businesses. This is especially so if your business has locations across the DMV, for each locality has taken a nuanced approach to combat COVID-19. As you chart a course for your business to weather COVID-19, be proactive. If there is any question as to whether your business qualifies as an essential or non-essential business, would benefit from seeking an official waiver from restrictions placed on non-essential businesses, has an adequate COVID-19 operational plan in place, is in compliance with the various temporary restrictive orders, or you simply have questions about what minimum business operations your business may engage in if deemed non-essential, seek legal counsel now rather than later to best protect yourself, your employees, and your business.