Arizona - Can My Business Stay Open?
March 25, 2020
By Adam Lang and Helen Goldstein
The number of COVID-19 cases continues to rise in Arizona and some are suggesting that cities and counties institute further restrictions to respond to this threat, as have been put in place both nationally and internationally. In anticipation of any such local orders, on March 23, 2020, Governor Doug Ducey issued Executive Order 2020-12 ("EO 12"). By that date, Governor Ducey had already issued numerous executive orders addressing the COVID-19 emergency. Most recently, in EO 12, Governor Ducey defined "essential services" and prohibited any Arizona localities from ordering closure of such essential services.
Why Did the Governor Issue This Order?
Across the nation, several severely impacted localities and states have issued stay-at-home (or otherwise called shelter-in-place) orders. Although each of these stay-at-home orders are nuanced, at the core they require businesses and workers to work from home except for those businesses or workers deemed essential. Each stay-at-home order has its own idiosyncrasy. Jacksonville, Florida, for example, issued a two-page order that requires businesses to allow employees to work from home unless they are essential or the employee is not able to work from home to perform the functions of his or her job, without truly defining what essential means. California, after providing some needed clarification, has ordered all residents “to stay home or at their place of residence, except as needed to maintain continuity of operation of the federal critical infrastructure sectors.” California defined “Essential Critical Infrastructure Workers” by looking to a fairly intricate list of 16 sectors identified by the U.S. Department of Homeland Security Cyber & Infrastructure Security Agency. In Illinois, Governor Pritzker delineated numerous activities and businesses considered essential in his stay-at-home order.
In conjunction with EO 12, Governor Ducey noted at his press conference that a stay-at-home order for the state was not yet appropriate. However, Governor Ducey, either (a) in anticipation of a forthcoming statewide stay-at-home order, (b) to prevent localities in the state, in potential future orders, from being overly inclusive as to which employees would be required to work from home or which businesses would have to close their brick-and-mortar operations, or (c) both, issued EO 12, delineating a detailed and expansive list of “Essential Businesses” and “Essential Functions” that counties, cities, or towns cannot restrict in any future stay-at-home order. In essence, Governor Ducey preempted local control over what functions and businesses are considered essential.
While Arizona’s statistics do not currently show the same number of COVID-19 cases or deaths as New York or California, most people, experts and government officials alike, expect that the number of cases will rise in this state, either as a result of additional testing or, unfortunately, new cases. When that happens, the state, counties, cities, and towns may decide to put in place stay-at-home orders. With EO 12, the Governor underscored what activities and types of businesses he considers essential and therefore protected, and made clear to localities that they could not prevent businesses or individuals participating in certain activities from working outside of the home.
Will My Locality Issue Stay-At-Home Orders?
While the prevalence of COVID-19 cases in Arizona to date is impossible to completely know, the consensus among experts is that cases in Arizona will continue to exponentially increase. If cases do continue to rise in Arizona, it is possible that several cities in Arizona will enact additional regulations, potentially including stay-at-home orders, to further improve social distancing. How cities continue to react to a rise in cases has yet to be seen. Flagstaff, through Coconino County, was first to take steps to close recreational facilities and restaurants for dine-in. Tucson, Tempe, and Phoenix followed, although Phoenix’s order was opposed by various members of the City Council, and with enough votes, could have been overruled. Shortly after, the Governor himself ordered similar closures on a statewide basis in any county that has a confirmed case of COVID-19.
If the cases continue to rise in Arizona, it is possible that we may see stay-at-home orders being issued throughout the state. While the Governor stated in his March 23, 2020 press conference on EO 12 that the state was not prepared to issue a stay-at-home order on that date, if the cases continue to rise, the Governor may decide that a statewide stay-at-home order would then be appropriate.
If My Locality Issues A Stay-at-Home Order Can My Business Stay Open?
It is important to take note that EO 12 is extensive. In fact, it expressly states that it should be broadly construed. Further, some of the businesses designated as essential are not obvious. Accordingly, before taking any action or preparing for a possible stay-at-home order in your locality or statewide, you may wish to check with counsel.
In determining whether a business is essential, questions to consider may include, among others, whether the business supports or is ancillary to any essential service, is part of the supply chain for an essential service, or the business has any government contracts that support essential government services.
While not an exhaustive list, EO 12 broadly refers to some of the following businesses and functions as essential:
- Healthcare-Related Operations
- Human Services Operations
- Essential Infrastructure
- Essential Government Functions
Complementing, and in addition to these categories, the following categories of businesses, among others, are deemed essential by the order:
- Stores that sell groceries and medicine including cleaning products
- Food production
- Outdoor recreational facilities where social distancing can be practiced, including golf courses
- Charitable organizations providing necessities of life for vulnerable individuals
- Gas stations and businesses needed for transportation including auto-supply and repair
- Banks and financial institutions
- Hardware stores
- Critical trades (e.g., plumbers and electricians)
- Mail and logistics companies
Before making any decision on conducting future business operations in the current climate, we encourage businesses to review EO 12 and consult with counsel.
What Can My Business Do To Prepare For A Stay-At-Home Order?
The Governor’s decision to proactively issue a detailed list of essential businesses and functions provides the business community with a head start. It gives a business time to develop a plan, consult with counsel to determine if it does or potentially could fit within the definition of essential, and make decisions on how it could move forward. But for anyone that has been following the constantly changing COVID-19 situation, time is of the essence. A stay-at-home order could be issued by any locality or the s tate without much time for a business to analyze next steps.
Now may be a good time to review EO 12 and consider whether your business or its activities could be deemed essential.
If you intend to stay open, consider consulting with counsel and drafting a short statement that explains, in layman’s terms, why your business, or its functions, is or are essential, or whether you should reach out to the relevant authorities to obtain some clarification to determine if they consider your business or functions essential.
For your convenience, EO 12 can be found here.
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