In an effort to contain the COVID-19 virus, states have begun issuing in rapid succession “shelter in place” directives that require nonessential businesses to close their doors and nonessential workers to stay home. Depending on the spread of the virus, many other states may follow with similar orders. This alert describes the types of businesses that states are exempting from these directives and the infrastructure sectors that the federal government considers critical to the continued day-to-day functioning of the country.

States have begun shutting down “nonessential” businesses in rapid succession

On March 19, 2020, Pennsylvania Gov. Tom Wolf ordered the closure of all “non-life-sustaining business” and California Gov. Gavin Newsom ordered all residents to stay home and leave only for essential trips. The next day, New York Gov. Andrew Cuomo said that starting March 22, all nonessential businesses must close, and all nonessential members of the workforce must stay home. That same day, New Jersey Gov. Phil Murphy indicated he will sign an executive order requiring all nonessential businesses closed to help slow the spread of the new coronavirus. Illinois has also announced a stay-at-home order, effective March 21, and Connecticut is following suit with a closure order that becomes effective March 23.

These executive orders force the closure of tens of thousands of businesses deemed “nonessential” to the daily lives of tens of millions of residents in those states. In issuing these orders, the states have described what types of businesses can remain open during this extraordinary time.

In New York, essential businesses that can stay open include grocers and restaurants, healthcare providers, pharmacies, gas stations, convenience stores, banks, hardware stores, laundromats and dry cleaners, child care providers, auto repair shops, utility companies, warehouses and distributors, delivery services, plumbers and other skilled contractors, animal care providers, transportation providers, construction companies, and many kinds of manufacturers.

California’s order exempts workers in 16 federal “critical infrastructure sectors,” including Food and Agriculture, Healthcare, Transportation, Energy, Financial Services and Emergency Response. In Pennsylvania, life-sustaining businesses include grocery stores, gas stations, auto parts stores, banks, healthcare providers and social assistance services.

Illinois’ order excludes vital occupations such as healthcare workers, grocery employees, funeral home employees, pharmacists, hardware store workers, plumbers, electricians, day care providers, bank tellers and roles essential to the supply chain. And it is expected that the lists of essential businesses in New Jersey and Connecticut will be similar to the lists in these other states.

States are relying on the federal critical infrastructure sectors list to determine what are ‘essential’ businesses

In developing their lists of essential or life-sustaining businesses exempt from the closure orders, states that have issued statewide closure orders or are considering them are referencing the critical infrastructure list prepared by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA). For example, the executive orders signed by Newsom and Connecticut Gov. Ned Lamont specifically refer to CISA’s critical infrastructure list. The list, available here, names 16 critical infrastructure sectors and the essential workers in those sectors needed to maintain the services and functions Americans depend on daily and will need during the COVID-19 pandemic response. Those sectors, described in more detail by CISA here, include Commercial Facilities, Communications, Critical Manufacturing, Defense Industrial Base, Energy, Financial Services, Food and Agriculture, and Healthcare.

Given the broadly worded descriptions of these 16 critical infrastructure sectors in the CISA guidance documents, state governors have considerable discretion to decide which businesses should be deemed “essential” and thus exempt from closure. In states that have closed or are considering closure of nonessential businesses, an intense lobbying effort is underway at both the federal and state levels over what sectors or specific businesses should be exempt from the closure orders. While some businesses such as grocery stores and pharmacies will certainly qualify as essential businesses that will remain open, many other businesses support the operation of the 16 critical infrastructure sectors in ways that may not be as apparent to politicians and policymakers.

Planning for closure

As the unprecedented wave of statewide closures continues, businesses in all states should carefully consider whether they and their employees operate in the one of the 16 critical infrastructure sectors identified by the federal government. States will continue to look at the federal guideline to help them determine what can remain open during the efforts to halt the pandemic, and businesses will need to be prepared to quickly address these issues with both federal and state officials. Businesses should not assume that they are nonessential, but instead examine the role they play in the continued operation of daily life in America.