What Is An “Essential” Business Under a Shutdown Order? It May Depend on Where You AreSeveral states and municipalities are moving to shutdowns in an attempt to curb the spread of COVID-19. These shelter-in-place orders usually allow “essential” businesses to stay open. Unfortunately, like much of the current COVID-19 situation, there are many questions about how those exceptions will be applied. While this is a moving target, this blog post shows how some states are using federal guidance to define the scope. It is important that you examine your own state or locality’s rulings, but this may help answer some questions. We hope to update with new information as it arises.

Generally, determining an essential business is a question of state and local law. However, many jurisdictions seem to be looking to federal guidance as a basis for making this determination. The Cybersecurity and Infrastructure Security Agency (CISA) recently issued “Guidance on the Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response,” which provides guidance to state, local, tribal, and territorial jurisdictions and the private sector on defining essential critical infrastructure workers. CISA executes the Secretary of Homeland Security’s responsibilities as assigned under the Homeland Security Act of 2002 to provide strategic guidance, promote a national unity of effort, and coordinate the overall federal effort to ensure the security and resilience of the nation’s critical infrastructure. The workers identified in this guidance generally represent the workforce related to the 16 critical infrastructure sectors’ assets, systems, and networks, whether physical or virtual, that are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof. These sectors include:

  1. Chemical
  2. Commercial facilities
  3. Communications
  4. Critical manufacturing
  5. Dams
  6. Defense industrial base
  7. Emergency services
  8. Energy
  9. Financial services
  10. Food and agriculture
  11. Government facilities
  12. Healthcare and public health
  13. Information technology
  14. Nuclear reactors, materials, and waste
  15. Transportation systems
  16. Water and wastewater systems

CISA’s guidance, however, is not binding, and states and local governments are establishing the specific parameters for their respective restrictions. Some states such as California are simply adopting CISA’s guidance. Similarly, Illinois and Louisiana have created their own definitions that reference and incorporate CISA’s guidance. Conversely, New York created its own definition and left open the option of seeking an opinion for businesses that have been excluded. Some states have gone as far as Pennsylvania to develop a spreadsheet of which specific businesses and industries are covered. Many other states and local governments have already closed bars, dine-in restaurants and other entertainment-related businesses with a view that these are non-essential businesses. Although different jurisdictions are taking different approaches, they are all making determinations about what is “essential” and “non-essential.”

Whether you are in a state or community with a pending shutdown order or one may be looming, it is important to be proactive and ensure that your critical business operations are deemed “essential.”  The government officials and staff that are making key decisions and determining the parameters of a shutdown may or may not fully understand your business or how critical it is. Accordingly, it is important that you engage your state and local officials and staff sooner rather than later.

Bradley can advise you on how these determinations apply to your business and counsel you on how to comply with them. The Governmental Affairs Practice Group is actively monitoring and engaging with Congress and the administration on these issues and is actively engaging state and local governments on behalf of clients to make sure their businesses are considered essential. Please contact Ryan Robichaux or David Stewart if you have any questions or would like to engage in the COVID-19 policy process.