Business Considerations Related to Governor Hogan's "Maryland Strong: A Roadmap to Recovery"

5 min

On April 24, 2020, Governor Larry Hogan announced his plan, Maryland Strong: Roadmap to Recovery (the Plan), to gradually reopen Maryland as it continues to manage the effects of the COVID-19 pandemic.1 In a press release, the governor stated that the reopening of the state could begin as soon as early May.

Overview of the Plan

The Plan is divided into three stages: (1) Low Risk, (2) Medium Risk, and (3) High Risk. Moving from one stage to the next will require the evaluation of different "gating benchmarks" by the governor. Those benchmarks will be data driven and include, among others: the current hospitalization rate and the current intensive care bed usage rate for COVID-19 patients, and the number of daily deaths associated with COVID-19. The Plan does not contemplate specific dates or set forth specific targets that must be met for the State to move from one stage to the next. Each stage will have sub-phases and threshold standards that will increase from stage to stage.

All three stages of the Plan will be subject to certain "stop signs" that would require the easing of restrictions to stop, slow, or be suspended. These stop signs include the following: an unexpected increase in hospitalizations or a sustained increase in cases involving intensive care, indications that individuals and/or businesses are disregarding physical distancing guidelines, and significant outbreaks of community transmission that cannot be measured through contact tracing techniques.

Although the Plan is focused on the reopening of the economy from a statewide perspective, the Plan provides that county health officers will be allowed to order local businesses to restrict service or order closed those businesses that are "deemed to be operating in a manner dangerous to the public health, regardless of whether said business falls within a category generally opened statewide."

Stage 1: Low Risk

The Low Risk stage involves "business, community, religious, and quality of life improvements." Specifically, the first stage of the recovery could include, among other things, the lifting of Governor Hogan's March 30, 2020 stay at home order, as well as the opening up of small shops and certain small businesses; curbside pickup and drop-off businesses; elective medical and dental procedures at ambulatory, outpatient, and medical offices; car washes; limited outdoor gym and fitness classes; outdoor work with appropriate physical distancing measures; and some personal services.

Stage 2: Medium Risk

Pursuant to the Plan, the Medium Risk stage will be the "stage when a large number of businesses and activities come back online." The Plan dictates that any businesses that reopen during the Medium Risk stage will need to comply with "strict physical distancing and appropriate masking requirements." The Plan outlines several changes that could be implemented during the Medium Risk stage, including raising the cap on social gatherings; the opening of indoor gyms and fitness classes, childcare centers, and restaurants and bars (with restrictions); and the implementation of normal transit schedules.

Stage 3: High Risk

The third and final stage includes "the more ambitious and long-term goals." Pursuant to the Plan, "[t]here is no realistic timeline yet from any of the scientific experts for achieving this level, as this requires either a widely available and FDA-approved vaccine or safe and effective therapeutics that can rescue patients with significant disease[.]" The Plan does not provide specific examples of the changes we can expect once we reach the High Risk stage.

Business Considerations in Light of the Plan

Given that the Plan will be implemented in stages and subject to several "stop signs" that are difficult to predict, Maryland businesses should be prepared to have their operations limited for the foreseeable future. These restrictions, and general health concerns, are likely to have continuing adverse impacts. Accordingly, businesses should consider thoughtful ways to raise and preserve cash and be proactive in anticipating possible challenges, such as covenant defaults under existing debt facilities. Our Corporate Practice Group is available to help businesses evaluate all of their options as they navigate this tumultuous economic environment.

Maryland businesses should pay close attention to the categories of businesses that are permitted to continue operations as the governor eases restrictions. It will be important to be mindful of any direction from local health officials. Even though a business may be allowed to open from a statewide perspective, that same business may not be allowed to open on a county or local level. When a particular category of business is permitted to open, owners and operators should ensure that they adhere to all physical distancing and masking requirements. This may require businesses to reassess and amend company policies related to employee conduct, i.e., adding provisions related to physical distancing measures, and revisiting existing policies relating to remote work.

With regard to all of these considerations, we are happy to discuss your questions.

As our clients across the state of Maryland continue to grapple with the economic effects of the COVID-19 pandemic – the shuttering of non-essential businesses, loss of revenue, creeping illiquidity, and the many difficult decisions that lie ahead – the lawyers at Venable remain dedicated to serving Maryland businesses through this difficult period, offering guidance and support as we collectively navigate these challenges.

For other back to business considerations, including employee considerations, please click here.


Footnote

On March 16, 2020, Governor Hogan ordered the closure of bars and restaurants and banned mass gatherings of over 50 people. On March 23, 2020, Governor Hogan ordered the closure of all non-essential businesses. On March 30, 2020, Governor Hogan issued a statewide stay at home order explicitly requiring individuals living in the state of Maryland to remain in their homes or places of residence, with certain exceptions. For more information on Governor Hogan's stay at home order, please see our March 31, 2020 client alert, "Maryland's Stay at Home Order and Maryland Businesses," available at https://www.venable.com/insights/publications/2020/03/marylands-stay-at-home-order-and-maryland.