The Governor’s Stay-At-Home Order Challenges California Employers
By Procopio Senior Associate Brook T. Barnes
Every employer wishes their employees to be healthy and safe, and that has never been truer than during the current COVID-19 pandemic. Most employers also require many if not all employees to work at onsite business locations. So it was a shock to many California employers when nearly all state residents were recently ordered to immediately (and indefinitely) stay at home.
California Governor Gavin Newsom issued that stay-at-home order–Executive Order N-33-20–on March 19, 2020. The only exceptions he made were for employees needed to maintain continuity of operations of “essential critical infrastructure sectors,” as well as additional sectors as the State Public Health Officer may designate. As a result, businesses throughout California were immediately left wondering if they could remain open, and employees were left questioning whether they needed to show up for work.
In the midst of dealing with many other important issues during the COVID-19 pandemic, California employers must determine if their business is part of, or provides support to, an Essential Critical Infrastructure sector.
A. Is My Business Considered “Essential”?
Governor Newsom specifically exempted 16 Critical Infrastructure Sectors as recognized by the Cybersecurity and Infrastructure Security Agency’s (CISA) from the stay-at-home order, meaning some workers in the following industries may be required to report to work:
- Chemical Sector
- Commercial Facilities Sector
- Communications Sector
- Critical Manufacturing Sector
- Dams Sector
- Defense Industrial Base Sector
- Emergency Services Sector
- Energy Sector
- Financial Services Sector
- Food and Agriculture Sector
- Government Facilities Sector
- Healthcare and Public Health Sector
- Information Technology Sector
- Nuclear Reactors, Materials, and Waste Sector
- Transportation Systems Sector
- Water and Wastewater Systems Sector
Importantly, even if a business operates in one of the enumerated sectors explicitly recognized as essential, employers must still use telecommuting (remote work) when possible to implement social distancing and comply with Executive Order N-33-20.
Subsequently, on March 22, 2020, the State Public Health Officer designated the list of Essential Critical Infrastructure Workers. While not exhaustive, the list does provide specific examples of sector “profiles” and “workforces” for each critical sector. Despite this clarification, however, many California employers still face the challenge of determining whether their businesses may continue to operate if they do not fit neatly into one the 16 enumerated sectors. In those circumstances, we recommend consulting with counsel to determine if your business is an “industry partner” with or supports one of the enumerated sectors’ “assets, systems, [or] networks” that could permit continued operation of your business. For example, with the assistance of counsel, businesses could request clarification from the Governor’s office to assess whether an exemption applies.
Many employers will face tough decisions regarding layoffs, furloughs, or cessation of operations if their business is deemed non-essential to the “assets, systems, [or] networks” of critical sectors. In contrast, businesses that deliberately defy the Order without a good-faith belief an exemption applies could face a misdemeanor, a fine not to exceed one thousand dollars ($1,000), or imprisonment not to exceed six months. As such, we caution all employers to work with counsel to make sure their business operations are not only compliant with the Order, but continued in a manner to safeguard their workforce in these unprecedented times of the COVID-19 pandemic.
B. Potential Employer Liability
In the wake of the Governor’s Order, employers may encounter employees who refuse to report to work because they believe they might violate the stay-at-home order. Employers should proceed with extreme caution before imposing any disciplinary action on such employees for refusing to report to work. Such a refusal by the employee may constitute protected activity under Labor Code section 1102.5. Specifically, that statute prohibits an employer from retaliating against employees for “refusing to participate in an activity that would result in a violation of or noncompliance with a local, state, or federal rule of regulation.”
Instead, we recommend employers work with counsel to determine if remote work is possible, and if so, implement remote work agreements that clearly define the employer’s expectations of productivity while performing remote work as well as determining which expenses may be reimbursable pursuant to Labor Code section 2802.
Employers find themselves in many uncharted territories during the COVID-19 pandemic, and new developments will continue to arise. Following best employment practices will continue to serve California employers well: Be conscientious of your workforce’s needs; be considerate and transparent as possible with your communications to your employees; and seek counsel when facing unexpected employment challenges.