Reed Smith Client Alerts

On March 19, Pennsylvania Governor Tom Wolf issued an Executive Order, effective immediately, mandating that “no person or entity shall operate a place of business in the Commonwealth that is not a ‘life sustaining business’ regardless of whether the business is open to members of the public.” Attached to the Order was a five-page listing of categories of businesses that may continue physical operations and those that may not. The summary was organized first by industry, with subcategories broken down by sector, subsector, and industry group.

Authors: John M. McIntyre Ronald L. Francis

While the listing of businesses deemed to be life sustaining initially appears to be relatively straightforward, the application may prove to be more complicated. For example, while “other general merchandise stores” may continue operations, clothing, sporting goods, and department stores may not.  Likewise, certain categories of manufacturers will not be permitted to continue physical operations even though they supply businesses that are deemed life sustaining. These perceived incongruities are likely to require further clarification, particularly if the prohibitions under the Order last for a significant period of time.

The Order relies heavily on the authority granted to the governor as a result of Pennsylvania’s declaration of a “disaster emergency” on March 6, 2020 following the first two reported cases of COVID-19 in the Commonwealth. 35 Pa. C.S. section 7301 grants the governor the authority to issue executive orders, proclamations and regulations which shall have the force and effect of law following emergency declarations. The Order also relies on the authority granted to the Secretary of Health to determine and employ the most efficient and practical means for the prevention and suppression of disease. 71 P.S. section 532(a), 71 P.S. section 1403(a).

The Order explicitly superseded all prior orders and guidance regarding business closure and specified that its prohibitions do not apply to virtual or telework operations (e.g., work from home), so long as social distancing and other mitigation measures are followed in such operations.

Each business will need to make its own determination as to how it is impacted by the governor’s Order based on the products and/or services it provides and the client base that it serves. Those determinations can impact issues ranging from labor and employment to potential insurance coverage. For example, businesses continuing with operations under the governor’s Order must be alert to possible employment and insurance coverage issues in the event that an employee or customer contracts COVID-19 that is traceable to the business. For that reason, we suggest that you contact your Reed Smith relationship lawyer with any questions and he or she can connect you with our dedicated COVID-19 response team.

Our Reed Smith Coronavirus team includes multidisciplinary lawyers from Asia, EME and the United States who stand ready to advise you on the issues above or others you many face related to COVID-19.

For more information on the legal and business implications of COVID-19, visit the Reed Smith Coronavirus (COVID-19) Resource Center or contact us at COVID-19@reedsmith.com

 

Client Alert 2020-122