Can We Or Can’t We – Operate, That Is!

Written by Susan Kohn Ross and Thea Rogers

The State of California issued a new stay at home order on November 19, 2020, in advance of the Thanksgiving holiday and some degree of tumult has ensued.  This latest order supersedes the one we covered last week, which you can see here.  As much as 94% of the State is in the most restrictive or purple tier due to the spike in COVID cases. The State’s order does not change those which are defined as “essential” at the State level, but does require that as of November 21, 2020, all non-essential work and activities stop between 10:00 p.m. and 5:00 a.m. for those operating in counties in the purple tier. The Statewide curfew applies to “all activities conducted outside the residence, lodging or temporary accommodations with members of other households …. except for those activities associated with the operation, maintenance, or usage of critical infrastructure or [as] required by law…” In what category does your business fall?

The State’s latest order can be found here. What remains confounding is the determination of whether a given business may remain open is ultimately decided by what additional orders are enacted at the county and city level where the business operates. Whichever order provides the most restrictions is the one to follow, which will no doubt create a lot of disruption because, in the end, there is some inconsistency between the State’s order and what some localities have decided.

For example, the announcement from LA County imposes the curfew from 10:00 p.m. to 6:00 a.m. (one hour longer than the State’s order). The original announcement issued by LA County took the form of a press release, and imposed on non-essential businesses a 25% maximum occupancy cap for in-person operations, plus other limits, on retail stores, offices and personal care services, and a 50% occupancy limitation on outdoor restaurants, breweries and wineries, cardrooms, outdoor mini-golf, go-karts and batting cages. 

The subsequent order by LA County goes further. The order itself states that, for example, for any non-essential office-based businesses, all indoor portions and operations must cease in-person operations. Only what are called Minimum Basic Operations (see definition below) may be conducted in person. Everything else is to be done via telework.  Whereas the original press release allowed 25% in-person occupancy across the board, by the time the actual order was published, that 25% was limited to those conducting Minimum Basic Operations.  

An exemption of even greater concern which is part of LA County’s order reads the 25% limitation applies to essential operations, but not if they fall into the categories of healthcare operations, essential infrastructure or essential government operations. So, being clear under which definition a business qualifies as essential becomes even more critical.

The definition of Minimum Basic Operations in the County’s order reads:

Operators of businesses that are required to cease in-person operations may conduct Minimum Basic Operations, which means:

(a) The minimum necessary activities to maintain and protect the value of the business’s inventory and facilities; ensure security, safety, and sanitation; and process payroll and employee benefits;
(b) The minimum necessary activities to facilitate the business’s owners, employees, and contractors being able to continue to work remotely from their residences, and to ensure that the business can deliver its services remotely.

Right now, the State’s order expires on December 21, 2020, unless otherwise extended! None of the “major” counties have assigned an expiration date, waiting rather to see what more develops.  

For purposes of this Alert, we also looked at (a) Alameda, (b) San Diego, (c) San Francisco and (d) Santa Clara, and asked three questions:

    1. Is industry subject to any curfew and, if so, what are those parameters?
    2. Are there any capacity limitations imposed on businesses?
    3. Is there a distinction drawn between essential and non-essential operations?

(a) Alameda

Whereas other counties did not change what are considered as “essential activities”, Alameda does, and so, for example, the latest order suspended until further notice a number of what are otherwise considered essential activities, such as television, radio and other media services, as well as logistics and warehousing! Otherwise, Alameda’s order is consistent with the Statewide order. The most recent order published by the City of Oakland is the Statewide order.

(b) San Diego

The San Diego County order is also consistent with the Statewide order. As of this morning, the city had not published its own order.

(d) San Francisco

The SF Order (County and City jointly) specifically states that only essential businesses, outdoor businesses, healthcare operations and certain additional businesses are allowed to operate onsite.  Any which do continue to operate must do so in accord with local protocols. All other businesses are only permitted to operate ‘Minimum Basic Operations.’ The definition of Minimum Basic Operations is a bit broader than that published by LA County, but is focused in the same direction – the function needs to be key to the continued survival of the business.

(e) Santa Clara

The Santa Clara County order is consistent with the Statewide order. Palo Alto republished the Statewide order.

If you have reviewed the orders issued applicable in your area, and still are not sure what is permitted, feel free to reach out to the MSK attorney with whom you regularly work or to MSK’s COVID Response Team by emailing us at reopen@msk.com.  

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