On March 19, 2020, California Governor Gavin Newsom issued Executive order NN-33-20, ordering “immediately” that the residents of the world’s fifth-largest economy stay inside their homes “except as needed to maintain continuity of operations of the federal critical infrastructure sectors.” The order follows on the heels of a slew of similar county-level orders that went into effect earlier this week. While the order as it currently stands has some ambiguity and appears to diverge from the county-level orders enacted earlier this week, additional guidance and clarification is anticipated to be issued on March 20 or 21, which will clarify that the order’s intended effect is an expansion of the earlier county level “shelter-in-place orders.” The end result is forty million Californians are required to stay home, and a wide array of businesses are required to suspend operations.
As currently drafted, the order excepts “16 critical infrastructure sectors,” referencing the Cybersecurity and Infrastructure Security Agency (CISA) guidance. More specifically, the order provides that “Californians working in these 16 critical infrastructure sectors may continue their work because of the importance of these sectors to Californians’ health and well-being.” Notably, the order is intended to be consistent with the March 19, 2020, Memorandum on Identification of Essential Critical Infrastructure, issued by CISA  (the CISA Memo). The CISA Memo contains an expansive list of persons deemed to be “essential critical infrastructure workers,” across a wide range of industries, including health care/public health, public safety, food and agriculture, water and wastewater, transportation and logistics, public works, communications and information technology, critical manufacturing, hazardous materials, financial services, chemical, defense and “other community-based government operations and essential functions.”
Some of these sectors are as anticipated, mirroring the “essential businesses” identified in the county-level orders. However, other “critical” infrastructure sectors identified by CISA are surprising and in contradiction to county-level orders. For example, the “commercial facilities sector,” which encompasses a wide range of industries, including entertainment, gaming, lodging, retail, real estate, and sports. While this sector is critical to a working economy, it seems unlikely that the governor intends to allow this sector to continue its work. The state website, where the order is posted, lists “essential services” there to include gas stations, pharmacies, food (grocery stores, farmers’ markets, food banks, convenience stores, take-out and delivery restaurants), banks, and laundromats/laundry services.
While more guidance from the governor’s office is almost certainly forthcoming, in the meantime this will mean that many businesses that employ “essential services” or critical infrastructure workers will be able to continue operations, while all other businesses need to review the CISA critical infrastructure sectors and determine if they are applicable, or stay home. Even if applicable, businesses should consider working from home options, staggered schedules, and social distancing feasibility. For example, grocery stores, pharmacies and retail stores that sell food and beverage will be largely unaffected by the order, while other “non-essential” stores and businesses will have to suspend operations, restaurants are required to cease “dine-in” services (but can continue providing carry-out and delivery options), and construction of critical infrastructure will continue, with plumbers and electricians permitted to continue traveling to job sites as needed to maintain the essential operations and safety of residences.
Moreover, while the order does not provide great clarity as to what activities persons who are not considered essential critical infrastructure workers can engage in, guidance from the state suggests that “essential travel” is permitted, which includes traveling to get food and fuel, care for relatives and friends, and get necessary health care. Governor Newsom’s comments additionally suggest that people are permitted to continue exercising in public places while keeping good social distancing practices and staying at least six feet from one another. At present, unlike many of the county-level orders issued earlier this week, there is no criminal liability for violating the order. For businesses not involved in critical infrastructure, we recommend an immediate evaluation of key contracts and insurance policies to determine necessary actions. We also recommend taking steps to enable employees to work from home and analyzing the myriad of employment-related issues that will arise from the order.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.
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