COVID-19: Information for Colorado Businesses

COVID-19: Information for Colorado Businesses

Client Alert

Read more in our Coronavirus (COVID-19) Center.

On March 22, 2020, Colorado Governor Jared Polis issued a statewide Executive Order mandating that all employers operating in the State of Colorado reduce their in-person workforce by fifty percent. The next day, Denver Mayor Michael Hancock went a step further, issuing a city-wide “Stay at Home” order, to take effect at 5:00 pm on March 24. Shortly thereafter, the City of Boulder and Pitkin County issued similar orders. These orders, summarized below, have sweeping implications for individuals and businesses in Colorado. 

Statewide Orders

Governor Polis declared a state of disaster emergency on March 11, 2020. (Colo. Ex. Order 2020-003). In so doing, Governor Polis set forth a wide array of executive declarations and directives aimed at curbing the spread of COVID-19. Among other actions, he activated the National Guard, allocated $4 million for COVID-19 response activities, and convened the Expert Emergency Epidemic Response Committee. 

In the days following this declaration, a series of additional statewide orders was issued, with increasingly restrictive policies: 

  • March 14: Governor Polis ordered the closure of downhill ski resorts. (Colo. Ex. Order 2020-004)
  • March 18: Governor Polis closed public and private elementary and secondary schools. (Colo. Ex. Order 2020-007)
  • March 18: The Colorado Department of Public Health and Environment (CDPHE) issued an order prohibiting gatherings of more than ten individuals. (CDPHE Order 20-23)
  • March 19: Governor Polis ordered the cessation of all elective and non-essential surgeries. (Colo. Exec. Order 2020-009)
  • March 20: Governor Polis temporarily suspended Colorado regulations so as to allow for the delivery of alcoholic beverages and marijuana (Colo. Exec. Order 2020-011), and issued an order limiting evictions, foreclosures, and public-utility disconnections. (Colo. Exec. Order 2020-012)

On March 22, Governor Polis issued the most recent, and most restrictive, order, to “reduce the number of people congregating in the workplace, and to enable the services, businesses, and travel necessary to protect public health and safety.” Although relatively short, the Order, which is in effect until at least April 10, provides as follows:

  1. All Colorado employers are ordered to reduce in-person workforces by at least fifty percent and are ordered to implement tele-work or other work-from-home capabilities to the greatest extent possible. 
  2. The CDPHE is instructed to issue an order clarifying exempt businesses and entities. 
  3. “Critical Businesses” are exempted, and in fact “encouraged to remain open.” The CDPHE Order contains the following categories of “Critical Businesses,” with several subcategories and specific examples under each:
    • Healthcare operations
    • Critical infrastructure (including utilities, roads, oil and gas extraction, hotels, telecommunications, etc.)
    • Critical manufacturing (including food processing, computers, medical equipment, telecommunications, etc.)
    • Critical retail (including grocery stores, gas stations, hardware stores, etc.)
    • Critical services (including trash collection, mail services, laundromats, childcare, etc.)
    • Media
    • Financial institutions
    • Providers of basic necessities to economically disadvantaged populations
    • Construction
    • Defense
    • Critical services necessary to maintain the safety, sanitation, and critical operations of residences or other critical businesses
    • Vendors providing critical services (including logistics and technology support)
  4. “Critical Government Functions”—such as police and fire stations, and correctional facilities—are also exempted. 

Noncompliance with the Order is punishable by a fine of up to $1,000 and/or imprisonment in a county jail for up to one year.

Denver Stay at Home Order

  1. Denver’s Stay at Home Order is the latest in a series of actions aimed at slowing the transmission of COVID-19 in Denver, including prohibiting gatherings of ten people or more (March 20) and cancelling public events at city venues (March 16). The Order requires “all individuals anywhere in” Denver “to stay at their place of residence” unless they are engaging in Essential Activities, Essential Governmental Functions, or Essential Businesses. The Order further states that all non-essential businesses with a facility in Denver must “cease all activities at facilities located within Denver, except Minimum Basic Operations.”
  2. Business Exemptions

  3. As a threshold matter, no business is required to close completely. As noted, Businesses may remain operational to the extent necessary to complete “Minimum Basic Operations,” defined as:
    • The minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions.
    • The minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences; and
    • The minimum necessary activities to facilitate employees of the business being able to continue filling online product orders and to process customer orders remotely.
  4. “Essential Businesses” are exempt entirely from the Order, and thus may continue operating fully (although Essential Businesses shall comply with social distancing requirements to the greatest extent possible). Those businesses are:
    • Healthcare Operations, Essential Infrastructure, and Essential Government Functions (defined below);
    • Grocery stores and businesses that deliver food and groceries; 
    • Farming;
    • Media services;
    • Gas stations, auto-supply, auto-repair;
    • Banks and related financial institutions;
    • Hardware stores, plumbers, electricians, exterminators, etc.;
    • Businesses providing mailing and shipping services;
    • Educational institutions (with restrictions);
    • Laundromats, dry cleaners, and laundry service providers;
    • Restaurants and other facilities that prepare and serve food (only takeout and delivery);
    • Businesses that supply products needed for people to work and learn from home;
    • Businesses that supply other essential businesses with the support or supplies necessary to operate;
    • Medical marijuana stores and (with extreme physical distancing) other marijuana stores
    • Transportation providers;
    • Home-based care for seniors, adults, or children;
    • Residential establishments including hotels, motels, and shelters;
    • Professional services, such as legal, insurance, accounting, or tax preparation services, when necessary to assist in compliance with legally mandated activities;
    • Faith-based establishments;
    • Childcare facilities;
    • Liquor stores (with extreme physical distancing);
  5. Exemptions for Particular Activities

  6. Denver’s Order allows individuals to leave their homes for the purpose of engaging in certain “Essential Activities,” such as obtaining medical supplies, groceries, and outdoor exercise.
  7. Individuals may also leave their homes to provide services for the operation of “Essential Infrastructure,” which includes oil and gas refining, utilities, water, sewer, gas, and electrical services, construction, airport operations, public transportation, waste collection and removal, and internet and telecommunication systems.
  8. Finally, the Order categorically exempts individuals who are performing or accessing “Essential Government Functions,” including public safety, law enforcement, emergency response, and state and local government personnel. 

Denver’s municipal enforcement authority allows for civil penalties of up to $999 for a violation of a health order. When announcing the Order, however, the mayor stressed that the city is not, in the first instance, planning to resort to punitive enforcement. Instead, the mayor explained that park rangers, police officers, and business inspectors would seek to “educate and inform” those in violation of the Order. The possibility remains, however, that the city could resort to punitive enforcement if needed. 

Boulder Stay at Home Order

On March 23, 2020, the City Manager of the Boulder, Colorado issued a Stay-at-Home Order, effective at 5:00pm the following day. The Boulder Order is substantively identical to its Denver counterpart, except that it does not define “Oil refining, oil and gas operations” as “Essential Infrastructure,” as Denver does.

Pitkin County Stay at Home Order

  1. The Pitkin County Order is also similar to the Denver Order, prohibiting individuals from leaving their residences to perform anything other than “Essential Activities” (as defined in the Denver Order) or to assist with “Essential Infrastructure” (defined similarly as in Denver Order). Businesses operating within Pitkin County are similarly required to cease all operations except for “Minimum Basic Operations” (as defined in Denver Order). Unlike the Boulder Order, the Pitkin County Order includes oil and gas operations in its definition of exempted “Essential Infrastructure.”
  2. Unlike the Denver and Boulder orders, however, the Pitkin County order includes a provision requiring all visitors to Pitkin County to return home immediately. It further directs all “persons considering visiting Pitkin County” to remain at home. While it does not require non-resident homeowners to vacate or stay away, the Order states that non-resident homeowners are strongly encouraged to leave or not travel to Pitkin County.”

Potential Conflict Between State and Local Law

Both state and local governments in Colorado are authorized to promulgate rules to address public health crises. Businesses operating in Colorado must therefore comply with both statewide regulations and with their particular county or municipal regulations. In most cases, both state and local regulations will be valid and enforceable.

Differences between state and local regulations, however, create the potential for confusion and inconsistencies. These differences will need to be analyzed on a case-by-case basis to determine whether a conflict exists. Even if a state and local order do not explicitly conflict, a local order may still be found to conflict with state law if the local law “materially impedes” a state interest. In Colorado, a state regulation will preempt a local regulation so long as the local regulation does not relate to a matter of purely local concern. Such a determination, however, requires an analysis of the regulation itself and the history of local regulation in that area.