Coronavirus And Residential Construction In Washington State

Like most industries in Washington State, the construction industry has suffered at the hands of the Covid-19 pandemic.  Virtually everyone in the chain from material suppliers, general contractors, subcontractors, individual construction workers, and project owners feel the toll inflicted by risks, obstacles, and uncertainties as they try to preserve and advance construction projects.  On March 23, 2020, Governor Jay Inslee issued  Proclamation 20-25, commonly referred to as the “Stay Home- Stay Healthy” order, which prohibited a large swath of commercial activity deemed “non-essential,” in order to prevent the spread of Covid-19.  Proclamation 20-25 prohibits all non-essential businesses in Washington State from conducting business, except as allowed by the order.  The proclamation allows “essential employees” to perform work for an essential business as identified in a list ( which can be found here ) of “Essential Critical Infrastructure Workers” (“ECIW List”).  The ECIW List specifies subcategories of essential workers under the topic headings of

  • Healthcare/Public Health
  • Emergency Services Sector
  • Food and Agriculture
  • Energy
  • Water and Wastewater
  • Transportation and Logistics
  • Communications and Information Technology
  • Other Community-Based Government Operations and Essential Functions
  • Critical Manufacturing
  • Hazardous Materials
  • Financial Services
  • Chemical
  • Defense Industrial Base

Most construction activities fall under the topic heading of “Other Community-Based Government Operations and Essential Functions” in the ECIW List.  Particularly relevant subcategories of the essential workforce in construction include:

  • Workers to ensure continuity of building functions;
  • Security staff to maintain building access control and physical security measures;
  • Construction workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction) for all essential facilities, services and projects included in this document, and for residential construction related to emergency repairs and projects that ensure structural integrity;
  • Workers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of construction sites and construction projects (including those that support such projects to ensure the availability of needed facilities, transportation, energy and communications; and support to ensure the effective removal, storage, and disposal of solid waste and hazardous waste);
  • Workers providing, maintaining, and repairing heating, cooling and refrigeration services.

Ambiguities in Proclamation 20-05 threw the construction industry into a panic.  Construction industry business owners wondered whether they could continue to operate and whether they would be risking sanctions if they mistakenly interpreted Proclamation 20-25 too broadly to include their business as “essential”.  On one hand, the ECIW List implies that residential construction may be entirely exempt under the ECIW List’s phrases, “to ensure continuity of building functions,” and “workers who support the construction, operation, inspection of . . . construction projects (including housing construction) . . .”  But other language in the ECIW List suggested a more limited scope of permitted residential construction activities, such as “emergency repairs,” “projects that ensure structural integrity,” and “continuity of building functions.”

The next day on March 24, 2020, the Building Industry Association of Washington (“BIAW”) interpreted Proclamation 20-25 to mean that “housing and residential construction and construction workers that support [housing and residential construction] are exempt [from Proclamation 20-25] and therefore are permitted to continue operating, as long as they implement appropriate social distancing and sanitation measures.”  Part of the BIAW’s reasoning was that the phrase “construction workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction) . . .” was directly taken from the California shelter in place order which had been consistently interpreted as allowing residential construction as an essential business exempt from stay at home provisions.  Many business owners took solace in this well-reasoned opinion, feeling that it gave them some protection to at least argue they were acting reasonably and in good faith by continuing construction activity despite Proclamation 20-05.

However, on March 25, 2020, likely in response to the BIAW’s opinion letter, Governor Inslee upended the BIAW’s interpretation by issuing a “construction guidance” memorandum, clarifying that, “In general, commercial and residential construction is not authorized under [Proclamation 20-25] because construction is not considered to be an essential activity.”  The memorandum went on to state that the construction exceptions to Proclamation 20-05 apply only in the following limited circumstances:

  1. Construction related to essential activities as described in the order;
  2. To further a public purpose related to a public entity or governmental function or facility, including but not limited to publicly financed low income housing, or
  3. To prevent spoliation and avoid damage or unsafe conditions, and address emergency repairs at both non-essential businesses and residential structures.

Taking this guidance from Governor Inslee as binding, a contractor wishing to perform work in residential construction must be able to make a good faith argument that its activities are “essential” by falling into one of the three categories above.  While the aforementioned guidance is general in nature, contractors can seek more specific guidance from the Governor’s Office by submitting an “Essential Business Inquiry” online form, which requests clarification inclusion as an essential business and can be found here.  The Governor’s Office has thus far responded to numerous contractor inquiries.  Although each response is geared towards the individual contractor and publicized, we can analyze responses which filter in to extrapolate and more confidently predict how the government might apply Proclamation 20-25 to similar situations.  Due to the volume of inquiries, one would expect bureaucrats (i.e., the “Business Response Team”) rather than high ranking officials, to issue the responses; one must therefore exercise caution in giving too much weight to individual guidance as binding industry-wide precedent.  Furthermore the Business Response Team states that “no state or local agency will be providing special certification that an activity is essential.”  In other words, receiving a response to an Essential Business Inquiry does not appear to bind the government to the position taken in the response.  That said, a response to an Essential Business Inquiry which interpreted a business or activity as essential would provide the requestor with persuasive authority and proof of good faith.

The common theme coming from the guidance responses thus far is that the Governor’s Office is taking a fairly restrictive approach to determining what is “essential.”  For example, some guidance responses directed towards residential construction have included the following or similar language:

“Under Proclamation 20-25, commercial construction and related contractor work will be deemed essential if it supports a business or activity that is itself essential.  The only permitted residential construction is the work necessary to restore a single bathroom or kitchen in order to preserve access to hygiene and nutrition.” (emphasis added).

The italicized language above suggests an overly narrow interpretation which seems to ignore other categories of permitted activities.   Making a good faith argument for your business activity may require getting creative.  Brainstorm about all the ways your activity is related to public and individual health and safety.  For example, landscaping may not feel too “essential” before one considers impacts on health and safety: that dying tree limb might need to be cut because it could fall on someone, or that brush cover near the house should be cleared out to prevent a fire hazard.  The air conditioning system may require replacement or refurbishing to prepare for dangerous summer heat waves.  You may need to finish construction on your home to have a place to live because your right of occupancy in your present residence is about to terminate.  For construction projects already underway, consider making an argument that not making minimal effort to finish them may cause “spoliation,” or create an “unsafe condition” sufficient to justify finishing the project.

What’s on the horizon?  The residential construction industry seems bound to return to normal at some point, but on what timeframe?  On April 14, 2020, a coalition of industry representatives wrote to Governor Inslee proposing a plan to phase in construction activities.  We are currently awaiting a more concrete plan.  In the meantime, your business may benefit from consulting with the lawyers of Beresford Booth to discuss the possible approaches you might take to maximize business productivity in these challenging economic times.

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