Thomas Lee and Hope Goldstein, Bryan Cave Leighton Paisner

As a growing number of states proceed with unprecedented stay-at-home orders, including the closing of nonessential businesses, general counsel are struggling with the definitions as they guide their companies to comply.

Connecticut, Michigan and Wisconsin this week are the latest of at least 15 states, four cities and one territory that ordered nonessential businesses to close. The other states are California, Delaware, Illinois, Kentucky, Louisiana, Maryland, Nevada, New York, New Jersey, Ohio, Pennsylvania and Rhodes Island, plus Puerto Rico; Dallas; Kansas City, Missouri; Nashville, Tennessee; and St. Louis.

Nearly all states have closed public schools and most have urged people not to gather in groups. Many have also closed bars and restaurants and recommended, but not yet ordered, nonessential businesses to close.

So what is a nonessential business? The definition can vary from state to state, and even city to city.

For this reason, employment law firm Fisher & Phillips over the weekend created an Essential Business Task Force to help general counsel and their companies navigate state and local government closure orders.

On Monday two attorneys at Bryan Cave Leighton Paisner offered a short webinar on shutdown and shelter in place orders, including the important role of in-house counsel in guiding the company. The law firm said mostly in-house counsel are registering for its series of coronavirus-related webinars.

Thomas Lee, a partner in the law firm's San Francisco office, stressed that the situation is fluid, and more governments are issuing orders or revising guidance daily. Businesses need to stay on top of new developments, Lee said.

Lee along with employment attorney Hope Goldstein from the New York office, hit these points:

  • The definition of an essential business can vary widely, depending on the order. Some adopt the 16 critical infrastructure sectors announced March 19 by the federal government, but many also add their own categories. The specifics of each order must be studied and applied.
  • Companies need to know where their operations are located, and what critical work is done there, and what part of the workforce can work remotely. Those are the facts that counsel will use to evaluate whether each facility qualifies as essential.
  • If a company thinks a shutdown order is likely coming in its area, it can reach out to the government and make a case for being included in essential services. Such efforts have received varied responses, some successful.
  • Businesses need to keep abreast of employment law changes that also are coming rapidly, including what qualifies for paid leave or immediate unemployment pay.
  • Violations of orders usually result in a misdemeanor offense, which can mean a fine, imprisonment or both. So far it is unclear how the orders will be enforced.

Lee told Corporate Counsel that once a company has decided to keep operating, in-house counsel can continue playing a key role by providing essential service letters for employees to carry in transit, as well as letters for facility personnel to provide to inspectors if they visit a facility.

He said the company also should reach out "to key upstream suppliers to ensure supply chain stability, and to customers to confirm continued operations."

Lee recommended implementing the Centers for Disease Control and Prevention cleaning guidance, social distancing and teleworking where possible.

He said to "make sure that all relevant levels of the company understand what the decision is with respect to a facility, and manage feedback from employees who may have concerns."