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Stay-At-Home Orders – 10 Step Evaluation Process For Manufacturers

In the week following our initial client alert regarding the effect of government stay-at-home orders on your manufacturing operations, approximately 27 states (and many other local authorities) have implemented a version of a stay-at-home order.  Many of these same states have issued subsequent updates or clarifications to their initial orders in an effort to provide the public with as much guidance as possible.  As governments gear up to combat the global pandemic, there is every indication that other states, if not all, will follow suit.  To help businesses navigate the new reality of conducting business alongside the spread of Coronavirus (COVID-19), we have developed a general process for evaluating orders as follows.

  1. Determine if the Order is Mandatory, or simply guidance.
  2. Determine if your business has any physical operations in the jurisdiction at issue, including whether any of your employees live in the jurisdiction.
  3. Know the specifics of your operations in the jurisdiction at issue, what you are manufacturing, how many employees are necessary to operate the facility in person, and the industries your customers are in.
  4. Fully read the Order and official guidance, and do not rely on media reports or interpretations of the Order.
  5. Focus on the definitions and exceptions or exemptions in the Order.  This includes reading over any mandatory social distancing requirements the Order is imposing on all businesses, even if you fall under an exception.
  6. Determine if the Order has an exception for non-essential businesses that supply products or services to essential businesses, as this may be a more straight forward  way to justify continued operations.
  7. If you determine your business is non-essential, determine if the Order has a minimum business operations provision, and if your business needs a minimum number of in person workers to preserve the value of your inventory or the business itself.
  8. Consider involving legal counsel in your analysis, especially if the exceptions you are relying upon are ambiguous or restrictive.  Strongly consider consulting with counsel if you are considering requesting an exemption or waiver from an Order, and understand that filing such a request could be deemed an admission that your business is non-essential.
  9. Keep a written record of the process your business has engaged in to determine if your business is essential so that it will be readily available to present to enforcement authorities if they challenge your operations.  Having evidence of good faith operations can often be the difference between mild and more severe penalties.
  10. Check back daily to look for updates and clarifications of existing Orders.

In evaluating orders, businesses should be aware that states with a significant number of cases tend to have more restrictive orders.  For example, with over 56,000+ cases, New York has one of the more restrictive orders issued in the United States.  Likewise, surrounding states such as Pennsylvania and New Jersey have issued similarly restrictive orders in an effort to flatten the curve.  Michigan and Washington also have fairly restrictive orders that should be carefully evaluated.  These more restrictive orders tend to have an accompanying detailed list of critical or essential businesses.  It is important that these lists, along with the order, are carefully evaluated.  At the other end of the spectrum, Texas has not issued a stay-at-home order, but is instead relying on city and county orders.  In addition to state-by-state orders, businesses should be aware that foreign governments are also taking action.  Last week Mexico issued its own stay-at-home Order, with many similar restrictions and guidelines as those seen in the U.S.  In these cases, it’s important to obtain a reliable translation of such orders and seek legal experts familiar with the jurisdiction at issue.

© 2020 Bracewell LLP

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About this Author

Manuel Vera, Bracewell Law Firm, Mergers Acquisitions Attorney
Partner, Foreign Legal Consultant

Manuel Vera represents U.S. investors in the acquisition of companies and assets in Mexico and other Latin American countries, and represents their interests in cross-border project finance transactions and joint ventures. He also provides legal counsel to U.S.-based financial service institutions, energy companies and investment firms doing business in Mexico and other Latin American countries. Mr. Vera’s practice focuses on Mexican and international corporate and commercial law, particularly foreign investment, project finance, banking, energy, real estate...

713-221-1325
Richard Whiteley, Bracewell Law Firm, Construction and Real Estate Litigation Attorney
Partner

Richard Whiteley, co-chair of the firm's construction litigation practice group, enjoys solving complex problems for his clients in an adversarial context, and believes an aggressive strategy of always preparing a case like it will ultimately go to trial is the best way to achieve the most favorable outcome. Richard has a wide range of experience in trial work and arbitration, with an emphasis on construction litigation, intellectual property litigation, products liability litigation, real estate litigation, and other types of commercial litigation. Richard has tried and arbitrated cases involving general contractual disputes, patent infringement, construction defects, manufacturing issues, trade secret misappropriation, trademark and copyright infringement, products liability, defamation, fraudulent transfers, real estate disputes, business disputes, deceptive trade practices, personal injury, and premises liability. In addition, Richard has experience with obtaining extraordinary and injunctive relief for clients, including temporary restraining orders, temporary injunctions and other writs.

713-221-1123
Sylvia Cherem Energy & Finance Attorney Bracewell
Associate

Sylvia Cherem represents energy companies, financial institutions and investment firms in acquisitions, joint ventures and project finance transactions in Latin America. Her experience includes representing major oil and gas companies and the Mexican government in energy-related matters, including mergers and acquisitions, tax planning, and domestic and cross-border investments in the Mexican upstream and midstream sectors. Sylvia played an integral role in the recent biddings and regulatory compliance involving Mexico’s upstream sector. She advised international oil companies in...

713.221.1423
Paula Toro Complex Commercial Litigation and Trial Litigation Attorney Bracewell Houston, TX
Associate

Paula Toro focuses her practice on matters related to complex commercial litigation and trial litigation. She represents plaintiffs and defendants in state and federal courts across the country. 

Prior to joining Bracewell, Paula was a legal intern with the Texas Innocence Network and the Fort Bend District Attorney’s Office.

Industries

  • Energy

Practices

  • Litigation
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