The COVID-19 crisis has highlighted the challenges a multinational enterprise (“MNE”) faces when global supply chains are disrupted. Decisions must be made quickly when a distribution center is temporarily shut down, when employees in key supply chain roles cannot perform their functions in their expected locations and when the source of raw materials or components
On April 29, 2020, the US Department of Defense (DoD) announced that it had exercised its authority under Title III of the Defense Production Act (“DPA”), 50 U.S.C. § 4501 et seq., to fund increased production capacity for swabs in light of the COVID-19 pandemic.
Section 303 of the DPA provides authority to ensure the timely availability of essential domestic industrial resources to support national defense and homeland security requirements through the use of tailored economic incentives. Authorized incentives include direct purchases and purchase commitments, development of emerging technologies, and the authority to procure and install equipment in private industrial facilities. 50 U.S.C. § 4533.
Previously in April, DoD provided $133 million in Title III contracts to bolster production of N95 respirators.
By Executive Order (“EO”) dated April 28, 2020, President Trump invoked the authority of the Defense Production Act (“DPA”) to direct that meat and poultry processing facilities continue operations notwithstanding the COVID-19 pandemic. As explained in our previous Legal Updates,1 the DPA gives the President “an array of authorities to shape national defense preparedness…
In response to the COVID-19 outbreak in the United States, all 50 states, Puerto Rico, and the District of Columbia have adopted certain measures intended to encourage “social distancing” in an effort to limit human contact and thus slow down the spread of the virus. Cities and states have adopted various measures to try to achieve this goal, including by closing schools and/or limiting or prohibiting large gatherings (such as by cancelling concerts, plays, museums, and eating in restaurants and bars). Some governments are also acting to protect people who get sick and cannot work or who are laid off. Several states have recently taken even more aggressive action.
In just the last week, some jurisdictions have issued orders advising their residents to stay in their homes (i.e., “shelter in place” orders). Other states have imposed strict limits on which businesses can remain open and/or have imposed requirements that “nonessential” workers stay home. As of now, these types of restrictions are in effect in, among other places, California, New York, Illinois, Ohio, Pennsylvania, New Jersey, and Connecticut. At present, these types of orders reach one in four Americans. As a result, businesses and workers have been confronted with the critical issue of whether they can operate and who, if anyone, can leave home to work on premises.
These actions are similar to many of those that have been taken by other jurisdictions, such as in China, Italy, and France. As governments have imposed these tight restrictions, they have also recognized the need to allow certain businesses to continue to operate as necessary to provide essential goods and services. These orders have been imposed quickly, responding to the immediate needs of each community, and thus neither the orders nor the exemptions to the orders allowing certain activities to continue are consistent across jurisdictions or always well-defined.
This Update provides guidance on the scope of essential services or businesses in five US jurisdictions that have adopted restrictive measures to fight the spread of the virus: CA, NY, IL, OH and PA. Alerts covering additional jurisdictions across the globe, and updates regarding these jurisdictions, will follow.