Pub. 8 2019-2020 Issue 3

10 San Diego Dealer DEALERSHIPS IN THE TIME OF COVID-19: PREPARING FOR TODAY’S AND TOMORROW’S CHALLENGES T he initial shock of the COVID-19 virus and the resulting shelter in place orders is beginning to wear off, and dealerships are asking themselves: what next? This article addresses the legal landscape for vehicle sales in San Diego County, what dealers must do now to operate their showrooms in a compliant manner, and how they can prepare for an uncertain future. The good news is that investments today in sound safety practices and legal compliance will pay dividends as prevention methods are likely to be our new normal. Understanding the Legal Situation On March 19, 2020, Governor Newsom issued Executive Order N-33-20 directing all residents to stay home and for businesses to cease on-site operation, except as needed to maintain continuity of operations of essential critical infrastructure sectors. The Order stated that these essential sectors included those designated by the Cybersecurity and Infrastructure Security Agency (“CISA”) of the Department of Homeland Security and additional sectors as the State Public Health Officer may designate as critical. Both CISA and the State Public Health Officer have always designated service and parts departments as essential sectors. However, neither CISA’s original designations nor the State HealthOfficer’s March 22 designations listed vehicle retail as an essential sector. Then on April 17, 2020, CISA designated personnel essential to sell and lease vehicles as essential critical infrastructure. On May 7, 2020, Governor Newsom’s office released the Phase 2 guid- ance of the California Resilience Roadmap for “lower-risk workplaces” detailing the steps businesses in specific industries must take to reopen. This guidance became effective May 8, the same day when designated lower-risk workplaces could open across the state with modification. The auto dealer guidance includes some specific requirements, but largely shifts to dealers the burden of assessing risk and developing plans to mitigate risk. San Diego County’s updated Order of the Health Officer dated June 18, 2020, requires that any business not meeting the definition of an essential business OR of a reopened business, defined as a business opening in compliance with the Governor’s Phase 2 guidance, remain closed, with exceptions for telecommuting. The prevention protocol requirements for essential businesses and reopened businesses differ to some degree. Because dealerships may legally qualify as essential businesses or as