Bay Area Counties Impose Additional COVID-19-Related Restrictions on Construction Activities

04.01.2020

By coordinated orders issued on March 31, 2020, six Bay Area counties modified and extended their prior stay at home orders, including putting additional restrictions on construction activities. The counties issuing the coordinated orders (“Orders”) include Alameda, Contra Costa, Marin, Santa Clara, San Francisco, and San Mateo counties. Although there may be differences in the wording of the Orders, we understand that these Bay Area counties intend that the Orders will be substantively the same.

The primary purpose of the Orders is to further strengthen and extend requirements for people to stay at home and thereby reduce person to person contact, with the goal of further slowing the spread of the virus that causes COVID-19 and mitigating the potential overwhelming impact on critical healthcare services. In that regard, the Orders acknowledge that there has been a significant increase in COVID-19 cases throughout the Bay Area, and that individuals without symptoms may easily spread the virus. Thus, further restricting person to person contact is intended to assist in further slowing the spread of the virus.

Relevant Provisions of the Orders

Although the statewide stay at home order issued by Governor Newsom exempts construction, including, among others, residential construction, the Bay Area county restrictions on construction go much further in limiting the construction activities that may proceed, and may in some cases result in projects being shut down prior to full completion. The Orders include construction, among a wide range of other businesses, as an “Essential Business” that, subject to certain conditions, may continue operations. (Click this link for a full list of Essential Businesses.) However, the types of construction activities that may proceed are limited to only:

Projects immediately necessary to the maintenance, operation, or repair of Essential Infrastructure;
Projects associated with Healthcare Operations, including creating or expanding Healthcare Operations, provided that such construction is directly related to the COVID-19 response;
Affordable housing that is or will be income-restricted, including multi-unit or mixed-use developments containing at least 10% income-restricted units;
Public works projects if specifically designated as an Essential Governmental Function by the lead governmental agency;
Shelters and temporary housing, but not including hotels or motels;
Projects immediately necessary to provide critical non-commercial services to individuals experiencing homelessness, elderly persons, persons who are economically disadvantaged, and persons with special needs;
Construction necessary to ensure that existing construction sites that must be shut down under this Order are left in a safe and secure manner, but only to the extent necessary to do so; and
Construction or repair necessary to ensure that residences and buildings containing Essential Businesses are safe, sanitary, or habitable to the extent such construction or repair cannot reasonably be delayed.

Also included among the many Essential Businesses identified in the Orders are:

Plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the habitability, sanitation, and operation of residences and Essential Businesses, but not for cosmetic or other purposes;
Arborists, landscapers, gardeners, and similar service professionals, but only to the limited extent necessary to maintain the habitability, sanitation, operation of businesses or residences, or the safety of residents, employees, or the public (such as fire safety or tree trimming to prevent a dangerous condition), and not for cosmetic or other purposes (such as upkeep); and
Educational institutions—including public and private K-12 schools, colleges, and universities—for purposes of facilitating distance learning or performing essential functions, provided that social distancing of six-feet per person is maintained to the greatest extent possible.

The Orders require that each Essential Business:

Maximize the number of employees who work from home;
Assign only those employees who cannot perform their job duties from home to work outside the home; and
Not later than 11:59 p.m. on April 2, 2020, prepare, post, and implement, at each of their operating facilities, a “Social Distancing Protocol” that conforms to the requirements of the Orders. (Click this link for more regarding the Social Distancing Protocol requirements.)

With respect to public agency activities, the Orders provide that “[N]othing in this Order shall prohibit any individual from performing or accessing ‘Essential Governmental Functions,’ as determined by the governmental entity performing those functions in the County. Each governmental entity shall identify and designate appropriate employees, volunteers, or contractors to continue providing and carrying out any Essential Governmental Functions, including the hiring or retention of new employees or contractors to perform such functions. Each governmental entity and its contractors must employ all necessary emergency protective measures to prevent, mitigate, respond to and recover from the COVID-19 pandemic, and all Essential Governmental Functions shall be performed in compliance with Social Distancing Requirements to the greatest extent feasible.” (Click this link for more regarding the Social Distancing Requirements.)

Potential Impacts on Construction Activities

As evident from the provisions of the Orders described above, construction activities in the Bay Area counties that have issued the coordinated Orders will be significantly limited, compared to what was permitted statewide by executive order of Governor Newsom. Not only will construction activities in these counties be limited to only certain types, but additional employee-related restrictions and social distancing requirements may be applicable.

The possibility certainly exists that COVID-19-related restrictions implemented in one area of California may shortly thereafter be effected statewide. Thus, it is possible that areas outside of the Bay Area may soon be subject to similar restrictions. In addition, if there subsequently is a perceived need to further slow the spread of the virus that causes COVID-19, or a perceived lack of good-faith compliance by public and/or private owners with the restrictions in the Orders, it is possible that even more draconian restrictions could be put in place. For example, some private owners and contractors may deliberately read the Orders broadly to argue that their particular projects qualify as “immediately necessary to the maintenance, operation, or repair of Essential Infrastructure.”

In what might be considered a worst-case scenario, it is possible that currently ongoing construction projects may need to be suspended prior to completion, if they are not one of the permitted types of construction activities. Public agencies (as opposed to private owners) will be able to determine which construction activities are Essential Governmental Functions that will be permitted to proceed, but presumably not all public work will be essential. But whether the public or private sector, there will be significant ramifications associated with suspending a project prior to completion, including, among possible others, securing the work site, missing scheduled milestone and/or completion dates, addressing stop payment notices and mechanic’s liens (click this link to view AALRR’s March 30 Alert), and carrying costs arising from incomplete work — not to mention the uncertainty that will result from not knowing if and/or when the project might be completed.

Because the facts associated with each project will be different from other projects, it will be important to consult with legal counsel to determine the impacts of the Orders on your ongoing and planned construction activities. If you have questions regarding the impact of these Orders, contact the attorneys at AALRR.