Ben Deninger, Associate, Troutman Sanders
James Diwik, Partner, Troutman Sanders
Matthew Dials, Associate, Troutman Sanders
Robert A. Gallagher, Partner, Pepper Hamilton
Michelle Beth Rosenberg, Associate, Pepper Hamilton
Jamey B. Collidge, Associate, Pepper Hamilton
As of April 8, the governors of 42 states and the Mayor of the District of Columbia have taken executive action to combat the spread of the coronavirus (COVID-19) which affects the construction industry by (i) ordering non-essential businesses to cease physical operations – except minimum basic operations such as securing facilities or processing payroll; (ii) ordering all individuals within their jurisdictions to shelter-in-place, which may include the duty to self-quarantine, unless performing exempt functions; or (iii) both. This analysis highlights the impact of state executive orders on the construction industry and demonstrates the importance of reconciling state and local government regulations.
The federal government has yet to close businesses, instead opting to issue relevant guidance materials. For example, the United States Department of Homeland Security’s guidelines identify 16 sectors as “Critical Infrastructure” during the pandemic, which have been adopted by various states in their executive orders. The following construction industry workers commonly are included in the list of “critical trades” exempt from most states’ executive orders:
- Building, construction, and other trades, including, but not limited to, plumbers, electricians, exterminators, operating engineers, cleaning and janitorial staff for commercial and governmental properties, security staff, HVAC, painting, moving and relocation services, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, essential activities, and essential businesses and operations.[i]
Federal guidelines also include large portions of the construction industry, specifically employees supporting the following construction-related activities:
- Construction of renewable energy infrastructure or energy sector fuels supporting the mining, processing, manufacturing, construction, logistics, transportation, permitting, operation/maintenance, security, waste disposal/storage and monitoring;
- New and existing pipeline or on/offshore drilling projects and construction of natural gas, propane, natural gas liquids, and other liquid fuel processing plants;
- Construction of critical or strategic infrastructure, traffic signal maintenance, emergency location services for buried utilities, maintenance of digital systems infrastructure supporting public works operations, and other emergent issues;
- Plumbers, electricians, exterminators, builders, contractors, HVAC technicians, landscapers, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, businesses, and buildings such as hospitals, senior living facilities, any temporary construction required to support the COVID-19 response;
- Engineers, technicians and associated personnel responsible for infrastructure construction and restoration, including contractors for construction and engineering of fiber optic cables, buried conduit, small cells, other wireless facilities, and other communications sector-related infrastructure;
- Ensuring continuity of building functions, including but not limited to security and environmental controls (e.g., HVAC), the manufacturing and distribution of the products required for these functions, and the permits and inspections for construction supporting essential infrastructure;
- Essential maintenance, manufacturing, design, operation, inspection, security, and construction for essential products, services, and supply chain and COVID-19 relief efforts; and
- Housing construction related activities to ensure additional units can be made available to combat the nation’s existing housing supply shortage.
Despite the Federal exemptions above, some jurisdictions have broadly restricted construction. In Pennsylvania, both residential and non-residential construction businesses may NOT continue physical operations EXCEPT for emergency repairs, health care facilities, and other limited exemptions.[ii] Similarly, New York has restricted all construction except (i) Emergency Construction (e.g. a project necessary to protect health and safety of the occupants, or to continue a project if it would be unsafe to allow it to remain undone until it is safe to shut the site); or (ii) Essential Construction (e.g. roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters.) The map below illustrates the different levels of state restrictions nationwide: Except in Pennsylvania and New York, nearly all private and public construction projects nationwide can remain in operation and workers can leave their homes to work. However, many local jurisdictions have also issued Orders restricting business or ordering individuals to shelter-in-place which could affect construction projects. Because most statewide Executive Orders do not specifically preempt potentially conflicting local orders, it is generally recommended to comply with whichever Order is most restrictive. The following are several examples of how local jurisdictions have regulated business to combat COVID-19:
- Boston, MA – Construction Prohibited
On March 16, 2020, the City of Boston announced a temporary two-week pause on non-essential construction with certain limited exemptions such as most utility work, work on the transportation network, public health and health care facility work, and small residential construction work. Recognizing the significant economic impact, the Governor of Massachusetts directed that any local policies in conflict with the State’s March 24 Order shall be withdrawn. The Mayor of Boston doubled down and announced he was affirmatively extending the City’s construction shutdown until further notice.
- San Francisco Bay Area – Specific Construction Exempt
Although California’s Executive Order directed all residents to stay home; on March 22, the State Public Health Officer exempted construction workers by classifying them as “Essential Critical Infrastructure Workers.” However, many local jurisdictions, including Northern California Bay Area Counties, significantly narrowed the type of construction activities allowed during their stay home orders. Alameda County, for example, amended its order on March 31 by limiting allowable construction activity to essential infrastructure, creating or expanding health care operations related to COVID-19, affordable housing that includes income-restricted units, public works specifically designated as an essential governmental function by the lead governmental agency, construction necessary to cure immediate issues of safety, sanitation, or habitability, in addition to activities necessary to shut-down non-exempt construction projects.
- Harris County, TX (Houston) – Most Construction Exempt
The Texas Executive Order is not as clear as others and, rather than prohibiting business or ordering residents to stay at home, it directs citizens to minimize social interaction/contact.[iii] Harris County Judge Lina Hidalgo issued an Order directing all non-essential businesses to cease physical operations and directing all individuals to stay home. Fortunately, the Order classifies most types of construction – including but not limited to commercial, residential, manufacturing and public works construction – as “Essential Business” meaning they are exempt from its effect.[iv]
Employers should also consider that in most states, social distancing measures – to the extent possible – are still required and out-of-state laborers may be required to self-quarantine for up to 14 days before commencing physical operations.
- General Social Distancing Requirements:
Most states still require Essential Businesses to mandate their employees to practice social distancing to the extent possible; meaning (i) maintaining a distance of six feet between people; (ii) washing of hands with soap and water for at least 20 seconds as frequently as possible; (iii) covering coughs or sneezes into the sleeve or elbow; (iv) regularly cleaning high-touch surfaces; and (v) not shaking hands.[v]
- New York-Specific Social Distancing Requirements:
Pre-shift meetings and orientations must include information on protecting against infection, and employers must (i) provide personal protective equipment and required training to employees; (ii) require 100% compliance with protective eyewear and work glove policies; (iii) limit crew size to the extent possible; (iv) maintain a robust sanitizing schedule for all frequently touched surfaces throughout all work shifts; and (v) designate a contact person for employees to address COVID-19 questions and concerns.[vi]
- New York-Specific Social Distancing Requirements:
- Self-Quarantine for Out-of-State Labor:
In Alaska, Florida, Hawaii, Maine, Rhode Island and Vermont, all individuals traveling from states with substantial community spread are required to self-isolate for 14 days with exceptions for those persons performing essential activities.[vii]
The Executive Orders in effect in most states currently expire at some point in April; however, some states have longer expiration dates:
- Six states (Delaware, Hawaii, Massachusetts, New Hampshire, Ohio and Washington) run through May;
- Virginia’s Order runs through June 10, 2020; and
- 11 states run through the duration of the State of Emergency in their respective states (California, Florida, Kentucky, Maryland, Minnesota, New Jersey, New Mexico, Oregon, South Carolina and West Virginia).
[ii] See Pennsylvania Emergency Proclamation and Industry Operation Guidance issued by Governor Wolf, available at: https://www.scribd.com/document/452553026/UPDATED-4-00pm-April-1-2020-Industry-Operation-Guidance (last visited on 4/3/20 at 9:30 AM).
[iii] See Executive Order GA-14, available at: https://gov.texas.gov/uploads/files/press/EO-GA-14_Statewide_Essential_Service_and_Activity_COVID-19_IMAGE_03-31-2020.pdf (last visited on 4/7/20 at 3:00 PM).
[v] See Wisconsin Emergency Order #12 § 16, available at: https://evers.wi.gov/Pages/Newsroom/Executive-Orders.aspx (last visited on 4/3/20 at 9:30 AM).
[vi] See REBNY & BCTC Industry Standards for Construction Safety, available at: https://www.rebny.com/content/dam/rebny/Documents/PDF/News/REBNY_BCTC_Industry%20Standards.pdf (last visited on 4/3/20 at 1:00 PM).