North Carolina's Stay at Home Order Affects Businesses Across the State

27
Mar 2020
North Carolina's Stay at Home Order Affects Businesses Across the State

On March 27, 2020, Governor Roy Cooper issued a Stay at Home Order for the entire State of North Carolina (Executive Order No. 121, “State Order” or “E.O.”)  The order takes effect in all 100 counties on March 30, 2020 at 5:00 P.M. for thirty (30) days.  

It is important to note that cities and counties have enacted ordinances and issue state of emergency Declarations based on the more significant spread of the virus in urban areas.  The Order states that it is not intended to limit or prohibit counties and cities in North Carolina from enacting ordinances and issuing state of emergency declarations which impose greater restrictions or prohibitions to the extent authorized under North Carolina law.” E.O. 121, §5.  At this point, it is unclear how the varying definitions and text of these local orders will interact with the State Order.

The State Order (and all local proclaimations) require “non-essential business and operations must cease.”  E.O. 121, at §2(A).  Unless a business is defined as a “COVID-19 Essential Business and Operation” it is required to cease all activities within the State except Minimum Basic Operations.  E.O. 121, at §2(A).  A non-essential business can undertake Minimum Basic Operations such as “The minimum necessary activities to maintain the value of the business's inventory, preserve the condition of the business's physical plant and equipment, ensure security, process payroll and employee benefits, or related functions.” E.O. 121, at §2(G)(i).  Those non-essential businesses “may also continue operations consisting exclusively of employees or contractors performing activities at their own residences.” E.O. 121, at §2(A). Therefore, the order also allows “The minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences.”  E.O. 121, at §2(G)(ii).

The first thing to understand about the State Order and the local orders is that they are endeavoring to maintain the essential critical infrastructure workforce as defined by CISA (the Cybersecurity & Infrastructure Security Agency within the Department of Homeland Security).  This list published on March 19, 2020 (link) which is the basis of devising the definition of Essential Businesses followed by the State Order and local declarations. See E.O. 121, at §2(C)(2).  The list of sectors and identified essential critical infrastructure workers by the CISA are:

  1. Communications
  2. Chemical
  3. Critical Manufacturing
  4. Commercial Facility
  5. Dams
  6. Defense Industrial Base
  7. Emergency Services
  8. Energy
  9. Financial
  10. Food & Agriculture
  11. Government Facilities
  12. Healthcare and Public Health
  13. Information Technology
  14. Nuclear Reactors, Materials, and Waste
  15. Transportation Systems
  16. Water

The State Order and local proclaimations are trying to limit amount of personal interaction, while still preserving “the critical infrastructure sectors and the essential workers needed to maintain the services and functions Americans depend on daily and that need to be able to operate resiliently during the COVID-19 pandemic response.”  CISA report, at 3

Focusing on the decision of whether a particular business or industry is considered an essential business should first look to the CISA for guidance.  This is referenced in the State Order in §2(C)(2).  However, even these businesses must maintain Social Distancing Requirements between employees and between employees and customers.  These essential businesses are also directed to direct employees to work from home or telework.  

The State defines Essential Business and Operation to include:

  • Healthcare and Public Health Operations 
    • Includes traditional healthcare
    • Naturopathic healthcare providers
    • Manufacturers, technicians, logistics, and warehouse operators and distributors of medical equipment, personal protective equipment (PPE), medical gases, pharmaceuticals, blood and blood products, vaccines, testing materials, laboratory supplies, cleaning, sanitizing, disinfecting or sterilization supplies, and tissue and paper towel products
    • Likely including those operations which have switched to manufacture any of these items above
    • Veterinary care and all healthcare services provided to animals
  • Human Services Operations
    • Care homes and facilities
    • Childcare centers
    • Social service agencies
    • Charities providing assistance
  • Essential Infrastructure Operations
    • Food and beverage production and distribution
    • Storage facilities
    • Construction (see discussion below)
    • Building and grounds management and maintenance including landscaping
    • Utilities
    • Transportation
    • Trash collection and recycling
    • Internet
    • Video and telecommunications systems
  • Essential Governmental Functions
    • Needed to ensure the continuing operation of the government agencies
    • Support the health, safety and welfare of the public
    • Does not affect Federal Governmental operations
  • Stores that sell groceries and medicine
    • Farmer’s markets and farm stands
    • Prepared food 
    • Alcoholic and non-alcoholic beverages (should include breweries or distilleries with take-out)
  • Food, beverage production and agriculture
    • Manufacturing, production, processing, and cultivation
    • Farming, livestock
    • Fishing
    • Forestry
    • Baking
    • Services and other necessities of life for animals

A number of businesses listed in the State Order are specific examples as clarification of the categories described above.

  • Organizations that provide charitable and social services
  • Religious entities (Limited to gatherings of 10)
  • Media
  • Gas stations and businesses needed for transportation
  • Financial and insurance institutions
  • Home improvement, hardware and supply stores
  • Critical trades (see below)
  • Mail, post, shipping, logistics, delivery, and pick-up services
  • Educational institutions
  • Laundry services
  • Restaurants for consumption off-premises (with take-out or delivery)
  • Supplies to work from home
  • Supplies for COVID-19 Essential Businesses and Operations
  • Transportation
  • Home-based care and services
  • Residential facilities and shelters
  • Professional services
  • Manufacture, distribution, and supply chain for critical products and industries
  • Defense and military contractors
  • Hotels and motels
  • Funeral Services
  • Electronic retailers that sell or service cell phones, computers, tablets, and other communications technology
  • Lawn and garden equipment retailers
  • Book stores that sell educational material
  • Beer, wine, and liquor stores
  • Retail functions of gas stations and convenience stores
  • Retail located within healthcare facilities
  • Pet and feed stores

The Department of Revenue has the authority to include other businesses upon request. (link)

 

If you have an questions about the State or Local Orders affecting your business, contact Allen Stahl + Kilbourne

By James Kilbourne and Derek Allen

 

Updated: March 27, 2020

 

 

 

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