State Governments Order the Shutdown of Non-Essential Businesses to Reduce the Spread of Coronavirus (COVID-19)

Understanding Which Businesses are Classified as "Essential" Under Current and Future "Stay-at-Home" Orders
Client Alert
March 25, 2020

As the novel coronavirus ("COVID-19") continues to spread rapidly, a number of states have ordered the closure of all non-essential businesses to limit further transmission of this disease. As of March 24, 2020, nearly 20 states have issued orders to this effect. As a result, many businesses already faced with a challenging economic environment must now determine whether they are classified as "non-essential" and therefore required to close. Businesses located in states not yet subject to these orders must also confront the uncertainty of not knowing whether they too will become subject to a mandatory closure of non-essential businesses.

Although the federal government has not issued orders restricting business activities, it has issued guidance relating to this issue. Most notably, on March 19,  the Cybersecurity & Infrastructure Security Agency ("CISA") issued guidance concerning Essential Critical Infrastructure Workers. This list builds on earlier guidance released by CISA that identified 16 “critical infrastructure sectors” necessary to the preservation of the national welfare. CISA’s March 19 list of Essential Critical Infrastructure Workers identifies critical infrastructure workers in 14 discrete industries, each of which has been deemed necessary to the continued operation of the services and functions Americans will depend on during this public health crisis.

To date, the stay-at-home orders issued by the states have largely conformed with CISA’s guidance concerning critical industry sectors and the workers essential to their continued operations. Generally, the states have classified workers in the following sectors to be "essential" and, therefore, exempt from any stay-at-home order:

Importantly, at the federal level, CISA’s classifications are not binding. Practically, however, states implementing stay-at-home orders seem to be relying heavily on CISA’s guidance. For example, the guidance issued by Massachusetts Governor Charlie Baker in tandem with his March 24 shutdown of all non-essential services in Massachusetts enumerates 14 "COVID-19 Essential Services"; these services directly align with CISA’s guidance concerning Essential Service Critical Infrastructure Workers. Although there are differences among the orders issued by each of the states to date, businesses can generally expect that any future stay-at-home orders will generally parallel the exemptions enumerated in CISA’s guidance. As a result, the guidance issued by CISA may help businesses located in states that have yet to implement stay-at-home orders anticipate whether they’ll be permitted to operate.

 It is critical that firms correctly determine whether they are classified as "essential" for purposes of stay-at-home orders. Businesses that remain open in contravention of such orders risk the imposition of legal liability as well as negative press coverage, as video game retailer GameStop recently discovered after it characterized itself as “essential.” If you operate a business in a state subject to a stay-at-home order, or if you do not and would like advice as to the potential implications of such an order on your operations, please contact the lawyer at Sullivan & Worcester LLP with whom you regularly consult, or any of the lawyers listed above.

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