What to Do If Your New York Business Has Been Deemed Non-Essential

APRIL 14, 2020

With his issuance of the “New York State on PAUSE” Executive Order 202, which became effective on March 22, Governor Andrew Cuomo suspended all “non-essential” businesses within New York in an attempt to flatten the curve and fight COVID-19. Along with his order came a list of businesses considered “essential” and allowed to continue operation, while enacting certain social distancing guidelines as best possible. Since then, the list of essential businesses has expanded, with the Empire State Development Corporation (ESDC) issuing further guidance toward that end on April 3.

Of course, if the type of business you operate is among those specifically listed as essential within the PAUSE order or subsequently by way of ESDC guidance, you are free to continue operations in New York. But what if your business has not been specifically enumerated as such by the governor or otherwise? In that instance, can you operate in any capacity? Here, Michelman & Robinson provides some clarity.

Classifications in Flux

It must be understood that with the PAUSE order, Governor Cuomo shut down in-person operations of non-essential businesses only. That being said, there are still services that some of these non-essentials can continue to provide—at least virtually or through third-party fulfillment centers—that may be considered acceptable. Likewise, whether a business is or is not essential is something of a moving target.

By way of example, the ESDC’s guidance on the PAUSE order adjusted Governor Cuomo’s initial listing and deemed the real estate business to be essential—albeit with caveats. Real estate brokers can transact business in their offices only, and have to show properties virtually. The ESDC declared law firms to be essential businesses too, though legal services must be rendered remotely whenever possible. The point here is that both of these businesses were not originally listed as essential in the governor’s PAUSE order. As such, there is some fluidity to an entity’s classification. Note, however, that this can work both ways, and if your business is currently operating under the belief that it is essential, you must be prepared for unexpected closure if the state finds that your business does not meet the criteria for such designation.

Reclassifying Your Business

There are some establishments that have been specifically called out as non-essential—golf courses, for instance, which were previously operating after the governor’s order have now been forced to close by the ESDC. Other businesses that have been shuttered by the PAUSE order (and are ineligible for reconsideration discussed below) involve gatherings, such as concert halls, theaters, conference venues, restaurants (for on-premises dining) and bars, casinos, gyms, salons, barbershops, public amusement facilities, and malls.

Assuming you do not operate one of the foregoing (or similar type) establishments—which cannot be open to the public at this time under any circumstances—but your business has nevertheless been left off the essential list compiled by the ESDC, you may have recourse. In fact, if you have determined that your business has not been labeled as essential pursuant to the ESDC’s guidance, you can still request that your business be so designated by the organization.

To successfully do so, you must demonstrate that your business should be deemed essential because it is in the best interests of New York to have your workforce continue at full capacity as the state responds to the COVID-19 emergency. If yours is not one of those businesses set forth above that are flatly ineligible for essential business consideration, it may be worthwhile to apply for designation as essential on the ESDC website. This is particularly true if your business provides any of the offerings on the ESDC’s list of essential services, even partially. If so, then you may be a strong candidate to be classified as essential

We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.