Mexican Companies Face New Challenges as Operations Resume

Foley & Lardner LLPWhile essential companies continue to operate in the midst of the COVID-19 pandemic, a new set of challenges has appeared on the horizon. Those new challenges come from certain states that have enacted prohibitions to or additional restrictions on essential activities. These restrictions include, for example, reductions in the number of permitted employees, no more than 30% of its employees, etc.  So far, the states of Puebla, Nuevo Leon, and Chihuahua have issued such ordinances, though many other states are following on the same path.

The reality is that a state’s authority is limited to certain activities, not including the ability to forbid or restrict activities already acknowledged as essential by the federal government, nor the ability to further restrict those activities as informed in other prior alerts. This has been confirmed by a former Justice of the Supreme Court of Justice, where he clearly stated that only the federal government is authorized by the Federal Constitution to impose or lift such restrictions. Hence, an affected company may challenge such prohibitions or restrictions on essential activities imposed by any state, by seeking federal injunctive relief against such measures, or an award of damages. 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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