On Monday March 23, 2020, President Donald Trump signed an executive order aimed at preventing hoarding and price gouging.  Attorney General William H. Barr indicated that the order is authorized under the Defense Protection Act, which allows the United States to compel private industry to assist in meeting national defense needs in response to national emergencies.

The new executive order empowers the Health and Human Services Secretary to designate supplies as “critical.”  Hoarding – accumulating quantities beyond those reasonable to satisfy personal or business needs – or price gouging is prohibited with respect to these “critical” supplies.  Presently, the Health and Human Services Secretary has not designated any supplied as “critical,” It is, however, anticipated that the order will be directed toward medical supplies, as opposed to traditional consumer goods like toilet paper or cleaning products that have also been the subject of supply shortages in the face of COVID-19.

Businesses already required to comply with various state anti-price gouging laws (see previous post) will need to confront the additional challenge presented by this new executive order. This is particularly true, given that the executive order carries with it the possibility of criminal penalties.  Employers should vigilantly ensure that the necessary personnel are aware of these additional requirements being imposed by various levels of government.

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