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Pennsylvania Governor Orders Closure of Non-Life-Sustaining Businesses Effective March 19, 2020

On March 19, 2020, Governor Tom Wolf signed an executive order requiring all non-life-sustaining business in Pennsylvania to close their physical locations as of 8 PM to slow the spread of COVID-19 (ORder of the Governor of the Commonwealth of Pennsylvania Regarding the Closure of All Businesses That Are Not Life Sustaining).  Section 1, entitled “Prohibition on Operation of Business that are not Life Sustaining,” contains mandates that are applicable to the operation of automobile dealerships.

Specifically, Section 1 states, “No person or entity shall operate a place of business in the Commonwealth that is not a life-sustaining business regardless of whether the business is open to members of the public.” It goes on to clarify, “This prohibition does not apply to virtual or telework operations (e.g. work from home), so long as social distancing and other mitigation measures are followed in such operations.” Section 1 also instructs, “Life-sustaining businesses may remain open, but they must follow, at a minimum, the social distancing practices and other mitigation measures defined by the Centers for Disease Control to protect workers and patrons,” adding that, “A list of life-sustaining businesses that may remain open is attached to and incorporated into this Order.” Finally, Section 1 contains a clear warning that “Enforcement actions will be taken against non-life sustaining businesses that are out of compliance effective March 21, 2020, at 12:01 a.m.” It should be noted that Section 3 of the Order specifies that “This Order is effective immediately and will remain in effect until further notice.”

A press release published in conjunction with the Order and listed on the Governor’s website contains a hotlink entitled “A list of life-sustaining businesses.” It links to a document entitled “Industry Operation Guidance” (IOG), which appears to be updated on a regular basis. The IOG contains a comprehensive list of industries, sectors, and subsectors drawn from the classifications of the North American Industry Classification System (NAICS), and specifies whether or not specific “Industry Groups” listed “May Continue Physical Operations” while the Order is in effect.

In other words, if an Industry Group is designated to continue physical operations in the IOG, it is considered a life-sustaining business under the Governor’s Order. Conversely, i) if an Industry Group is specifically designated to not continue physical operations in the IOG, or ii) if a business that might be thought of as an Industry Group is not actually listed in the IOG, then either is considered a non-life-sustaining Industry Group under the Order.

Of relevance to automobile dealerships, the IOG confirms that each of the following specifically named Industry Groups may continue physical operations under the Governor’s Order: i) “Automotive Repair and Maintenance;” ii) “Automotive Equipment Rental and Leasing;” and iii) “Automotive Parts, Accessories, and Tire Stores.” However, the IOG specifies that “Automobile Dealers” and “Other Motor Vehicle Dealers” may not continue physical operations under the Order. Similarly, since the IOG’s Industry Group column does not contain descriptions such as “Automotive Sales” and “Motor Vehicle Retailers,” it appears that the physical operations of selling vehicles at a dealership may not continue. This creates uncertainty as to why leasing is allowed but retail sales apparently are not.

Furthermore, it is unclear under the IOG if internet sales and home delivery are allowed under the Governor’s current Order. The IOG contains a “Notes” column for further explanations, but no further information is included with respect to any of the aforementioned automotive-related Industry Groups.

The Governor’s press release states that private businesses “that fail or refuse to comply with the governor’s orders that protect the lives and health of Pennsylvanians will forfeit their ability to receive any applicable disaster relief and/or may be subject to other appropriate administrative action.” It then states, “Such action may include termination of state loan or grant funding, including Redevelopment Assistance Capital Project (RACP) grant funding and/or suspension or revocation of licensure for violation of the law.” Finally, it warns that “in addition to any other criminal charges that might be applicable, the Department of Health is authorized to prosecute noncompliant entities for the failure to comply with health laws, including quarantine, isolation or other disease control measures,” adding that “Violators are subject to fines or imprisonment.”

Governor Wolf has also published “Life-Sustaining Business FAQs” which appear to be updated regularly. The publication indicates that a business not listed as life-sustaining may qualify for a waiver if it “provides goods or services necessary to maintain operations of a business on the life-sustaining list.” Here is a link to the Request for Waiver/Exemption to Business Closure form.

Further information regarding the availability of working capital and low-interest loans to, and further guidance for, businesses impacted by COVID-19 is included in Governor Wolf’s press release, which can be found here.

A copy of Governor Wolf’s Executive Order can be found here.

The Industry Operation Guidance, including life-sustaining businesses, can be found here.

The Governor’s Life-Sustaining Business FAQs can be found here.

For further information regarding working capital loans that could be of assistance to businesses impacted by COVID-19, see the DCED website here.

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