During the coronavirus (COVID-19) Global Pandemic, we have been engaged by clients faced with the threat of multiple competing orders at the state, county and city levels. Because of the Pandemic, each level of authority is able to create its own directives with the force of law prohibiting and requiring certain commercial conduct. Most businesses are surprised to learn that now they must look not only to the Governor, but to their county and city officials in the response to this crisis. Crises test, and reveal, the flaws in our systems, and the potential for a well-intentioned regulatory cacophony by our leaders is manifesting now. But a proactive approach engaging in dialogue with those authorities can cause a good outcome for the company and the State’s public welfare. For the reasons that follow, this Alert strongly encourages North Carolina businesses to take such an approach.
The Governor, the 100 County Commissions, and North Carolina cities are working diligently to protect public health and welfare during the Pandemic, and all have extensive authority to regulate commercial activity in the interests of doing so. There is, however, great risk to business in North Carolina of being pulled in a multitude of directions. For example, the Governor may give one order and a particular county or city another — for companies with operations in multiple locations, the risk of this issue multiplies. The good faith efforts of our elected officials working to protect us during this crisis is at the same time creating an array of mandates capable of pulling businesses in multiple directions and freezing them as they work through the deep and expanding ink to ensure they are complying with the law.
By way of illustration, the Governor has issued five Executive Orders in two weeks that address a multitude of issues from social spacing, restaurant operations, limiting retail service operations to curbside service, and, most recently, ordering all public schools statewide closed until May 15. As to counties, by way of example, Wake County, Mecklenburg County, Guilford County and Pitt County each have issued their own orders, with the force of law, and each with their unique and well-intentioned syntax that must be examined, and which varies from county to county. The cities too have broad authority, and earlier today, the City of Durham issued its own order.
Other states, where the crisis is more advanced, have moved to “Stay at Home” orders where citizens are ordered to stay and work at home, with exceptions for personal needs (e.g., grocery shopping, medical needs and work in “essential businesses”). As North Carolina moves in that direction, it is more important than ever that businesses immediately initiate dialogue with public officials to ensure uniform treatment. Many businesses rightly point to the guidance from the Department of Homeland Security on the definition of “essential business or infrastructure” and are advocating for uniform adoption of that standard to avoid the budding cacophony. As this evolves, essential businesses will also need guidance on how to ensure that their workers can continue to travel to work. Our firm’s employment lawyers are working to assist clients in providing practical, real-world advice to best address this issue for employees while remaining in compliance with all relevant governmental orders.
We have managed this dialogue for multiple clients at each level of state government authority, and are active in discussions with statewide and local officials and stakeholders. If your business is vulnerable to competing directives or to misclassification if there is a Stay at Home Order, please contact any of the authors of this Alert to develop a strategy to best manage the process.
Smith Anderson has developed the Coronavirus Business Resource Center as a tool to keep our clients and the broader business community informed on key issues that may affect their operations during these challenging times. We encourage you to check back frequently for updates and to reach out to a Smith Anderson lawyer with questions.