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Essential vs. Nonessential Businesses

As government agencies strive to take all available measures to slow the spread of the COVID-19 pandemic, a topic of great interest to the public and to business owners has been which businesses are deemed “essential” versus “nonessential” in light of shelter-in-place orders and social distancing rules. Entities providing critical infrastructure, such as medical centers and food retailers, have generally remained open in most states, but businesses providing services or products that are considered to be recreational or less critical have mostly been ordered to close or operate remotely. Disputes have been associated with closures of certain categories of businesses, such as gun retailers.

Shelter-In-Place Orders

States and cities across the country have been issuing and updating emergency orders requiring residents to stay at home unless they are accessing essential services or going outside while maintaining an appropriate degree of social distance. Most jurisdictions, such as the State of California, are providing detailed lists of businesses and services that are considered essential, as well specific guidelines for how members of the public should interact with these entities. The federal government has also provided guidance with respect to determining essential versus nonessential businesses.

Essential Businesses

Among the more than 30 states that have issued guidance mandating that only certain businesses remain open during the coronavirus outbreak, there are some clear areas of agreement as to which businesses or activities are deemed essential. Grocery stores, health care providers, banks, hardware stores, utilities, transportation providers, and gas stations are almost universally included in the list of entities that may remain open pursuant to shelter-in-place mandates. Government orders may also allow businesses that serve to support essential businesses or workers to remain open. For example, the City of San Francisco has ordered that daycares may remain open, but only for the purpose of supporting the ability of parents who work in essential industries to report for duty. Businesses that remain open also tend to be subject to mandates that they implement social distancing, sanitization, and other public health protocols.

Nonessential Businesses

There is similar agreement among many states that certain categories of businesses should be considered nonessential, namely those geared toward recreation and entertainment. These generally include places such as gyms, shopping malls, theaters, and sporting or concert venues. In many locations dine-in restaurants are allowed to remain open, but only for take-out or delivery. Nonessential businesses that have the ability to conduct their operations remotely may generally do so, and take steps to ensure that their employees are equipped to work from home.

Disputed Categories

Businesses in some sectors of the economy have disputed whether they should be deemed nonessential. For example, a gun retailer, along with individual and nonprofit organization plaintiffs, sued the government officials in California, alleging that the decision to categorize gun stores as nonessential was a violation of the constitutional right to bear arms. Similar legal disputes related to gun stores have arisen in other states, including New Jersey and Pennsylvania. However, the federal government has since issued guidance designating gun retailers as essential businesses. This change led to officials in California and New Jersey reversing course and allowing gun stores to remain open under COVID-19 emergency orders, subject to certain limitations.

Violations of Government Orders

Government agencies are taking the enforcement of shelter-in-place and related public health orders very seriously, and are penalizing nonessential businesses that do not comply. For example, in Washington, failure to close a business in accordance with emergency orders is a gross misdemeanor, which can carry a $5,000 fine and almost a year in jail. A similar violation in Arizona is a Class 1 misdemeanor, which can lead to six months in jail and business fines of up to $20,000.

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