By: Lane F. Kelman
, Jackson S. Nichols
, and Zachary D. Sanders
of Cohen Seglias Pallas Greenhall & Furman PC
Updated: March 30, 2020
With the number of reported cases of coronavirus (COVID-19) increasing, the governors of Pennsylvania, New Jersey, New York, and Delaware, among others, continue to increase social distancing measures to reduce the spread of the virus. Updated executive orders and related guidance seems to be issued almost hourly. With the constant barrage of updates and changes in directives, it is difficult for contractors and other stakeholders in the construction industry to keep apprised of the current status of their projects. To assist contractors in navigating this unprecedented and uncharted territory, a summary of the current status of various executive orders and directives in place in the Mid-Atlantic region is provided below.
On March 19, 2020 Governor Wolf issued an executive order requiring all businesses that are not “life-sustaining” to shut down. Under initial guidance, all construction was considered not life-sustaining and was required to cease operations. Since that time, Governor Wolf relaxed restrictions on the construction industry, albeit slightly. While construction remains classified as not life-sustaining, the Governor has implemented exceptions for “emergency repairs” and for the “construction of health care facilities.” Additionally, enforcement of the Governor’s order was delayed from Saturday, March 21 to Monday, March 23rd, effective at 8:00 AM. Pennsylvania has provided a process for businesses to request a waiver to the order, which are granted on a case by case basis (guide to the waiver request process).
On Sunday, March 22, the City of Philadelphia issued a “stay-at-home” order, which took effect on Monday, March 23, and remains in effect until further notice. Additionally, Governor Wolf issued a stay-at-home order for Allegheny, Bucks, Chester, Delaware, Monroe, and Montgomery Counties, effective at 8:00 PM on March 23. As of March 29, Governor Wolf’s stay-at-home order has been expanded to 22 total counties. The stay-at-home requirements do not apply to essential businesses or to essential personal activities previously set forth by the Governor and the Mayor of Philadelphia. The Philadelphia Mayor’s office also made clear that the order did not limit previous guidance given by the City’s Department of Licenses and Inspections, which allowed construction activities to continue until 5:00 PM on Friday, March 27, but only where continued work may help secure the project site or prevent unnecessary property damage. The General Building Contractors Association provides guidelines for the operations to cease or suspend all construction activities.
On March 21, Governor Murphy entered an order closing all businesses in the State of New Jersey with some limited exceptions, including construction, construction-related activities, utility work, and repair work. As a result, contractors may continue their physical construction activities in New Jersey. The Governor also mandated that all New Jersey residents remain in their homes until further notice. The shelter-in-place order has certain exceptions, such as seeking medical attention, securing essential goods and services, and engaging in outdoor exercise activities. In addition, the Governor mandated that all for-profit and not-for-profit entities, where practicable, must accommodate their workforce with remote working arrangements. The Governor’s March 21 direction supersedes all local government orders.
Effective Sunday, March 22 at 8:00 PM, Governor Cuomo ordered the closure of all non-essential businesses in the State of New York. At that time, construction was identified as an essential business in New York and contractors were exempt from the statewide shutdown. On March 27, however, Governor Cuomo issued an updated order halting most construction statewide. Under the new directive, most residential and commercial construction is suspended. Emergency repairs and work on infrastructure, hospitals, and affordable housing is permitted to continue.
As of Tuesday, March 24, all residents of Delaware are to remain in their homes except for essential activities, until May 15th or until the public health threat is lifted by order of Governor Carney. Similarly, the Governor ordered all nonessential businesses to close. The Governor’s guidance makes clear that construction remains an essential industry, and thus, projects may continue unabated.
On Monday, March 23, Governor Hogan issued an executive order, which mandates the closure of all non-essential businesses, establishments, and facilities in Maryland, effective at 5:00 PM on March 23. The Governor also suggested that all residents stay at home and that employers should promote work-from-home arrangements to the greatest extent possible. The Maryland Office of Legal Counsel issued interpretive guidance that provides a non-exhaustive list of businesses that are deemed essential. Under that guidance, Maryland has exempted many businesses in critical infrastructure sectors, including all commercial and residential construction companies, plumbers, electricians, mechanical service contractors, roofers, and landscapers. Consequently, construction projects in Maryland may maintain course and continue field operations. A spokesman for the governor’s office, Michael Ricci, stated: “We classified construction as essential in alignment with federal guidelines.”
On March 30, Governor Hogan issued an additional order mandating that, as of 8 pm that day, all individuals in the state stay at home unless they are engaged in “Essential Activities” (as defined in the order) and ordering the closure of “Non-Essential Businesses” save for critical infrastructure sectors. While construction was not specifically listed as exempt from the Non-Essential Business designation, based on the previous order designating construction as a critical infrastructure sector and earlier guidance from the governor’s office, it appears that Maryland is permitting construction activities to continue for now.
On Tuesday, March 24, 2020, Mayor Muriel Bowser issued an order temporarily directing the closure of all non-essential businesses and prohibiting gatherings of 10 or more people, effective from March 25 through April 24, 2020. Non-essential businesses include tour guides and touring services; gyms, health clubs, spas, and massage establishments; theaters, auditoriums, and other places of large gatherings; nightclubs; hair, nail, and tanning salons and barbershops; tattoo parlors; sales not involved in essential services; retail clothing stores; and professional services not devoted to assisting essential business operations.
Rather than categorically exempt the construction industry as essential business, the order provides a list of specific building trades that is comprehensive enough that it appears intended to exempt all commercial and residential construction from the closure order. While many supplier trades are not specifically listed, their crucial role in the function of the other exempted trades likely means that they are meant to be part of the exemption as well and can continue to operate. Importantly, even essential businesses are not permitted to staff any aspect of their operations with workers who are sick, defined as “an individual who is suspected or confirmed to be infected with COVID-19 or any other transmissible infectious disease or who has symptoms of a cold or influenza.” Essential businesses are also expected to take all reasonable steps necessary to allow employees to work remotely.
On March 30, Mayor Bowser issued a stay-at-home order for the District putting in place further restrictions and requiring individuals to stay at home if they are not engaged in “Allowable Recreational Activities” or Essential Activities” (as defined in the order). The definition of Essential Activities includes traveling to work and engaging in activity for Essential Businesses. The March 30 order did not disturb the March 24 order’s listing of numerous construction trades as Essential Businesses. As such, the District is permitting construction activities to continue for now.
On March 23, 2020, Governor Ralph Northam of Virginia issued an executive order limiting public gatherings and events to 10 or fewer people and encouraging social distancing. The order went into effect from 11:59 pm on March 24, 2020 until April 23, 2020. Under the order, recreational and entertainment businesses must close, and restaurants and other restaurants providing food and beverage services may only offer take-out and delivery. Other businesses that remain open must utilize telework as much as possible and otherwise adhere to social distancing recommendations, enhanced sanitizing procedures, and apply relevant workplace guidance from state and federal authorities, including CDC, OSHA, and the Virginia Department of Labor and Industry. As such, construction continues and contractors may continue their operations both in the field and at the office as long as they follow those guidelines.
On March 30, Governor Northam issued a temporary stay-at-home order that required all individuals in Virginia to remain at home unless engaged in permissible activity such as seeking food, medical attention, or permissible travel subject to social distancing requirements. Permissible travel includes traveling to and from one’s place of work. The March 30 order also extended the duration of the above restrictions to June 10, 2020. The new order did not articulate any changes to the business closures outlined in the March 23 order.
Details surrounding COVID-19 continue to unfold day-by-day, hour-by-hour, and even minute-by-minute. These ever-changing circumstances present many novel questions for contractors, suppliers, and owners alike. Questions like:
- Can my construction project continue?
- Can I obtain an exemption to a shut-down order for my business?
- Who bears responsibility and liability for delays? Disruptions? Increased costs?
- What do I need to do to ensure the safety of my employees?
- Should I update my safety manual?
- Should my office employees be telecommuting?
As you navigate these uncertain waters, be proactive, not reactive. Seek legal counsel now rather than later to best protect yourself, your employees, and your business from the unwanted effects of coronavirus.
Lane Kelman is a Partner in the Philadelphia office of Cohen Seglias Pallas Greenhall & Furman PC and Chair of the firm's Green Building Group. He has an active and diverse construction litigation practice, representing developers, general contractors and trades in complex construction matters throughout the United States and internationally. He has extensive experience with both private and public projects. His work ranges from contract negotiations to claim prevention and management, construction defects, and suspension and debarment proceedings. He can be reached at firstname.lastname@example.org or 267.238.4728.
Jackson S. Nichols is an Associate in the Washington, DC office of Cohen Seglias Pallas Greenhall & Furman PC. In his construction practice, Nichols advises general contractors, subcontractors, sureties, owners, and other construction industry entities in navigating complex commercial disputes that arise during projects. He regularly prosecutes and defends claims involving mechanic’s liens, bond claims, Miller Act claims, and arbitration disputes, among others. He can be reached at email@example.com or 202.587.4756.
Zachary D. Sanders is an Associate in the Philadelphia office of Cohen Seglias Pallas Greenhall & Furman PC. He serves as counsel to a broad range of clients in the construction industry, including general contractors, subcontractors, suppliers, sureties, and owners. He can be reached at firstname.lastname@example.org or 267.238.4732.