From the start of the unprecedented closure of the New York State Courts to new, “non-essential” filings until yesterday, commercial tenants had no remedy against a landlord seeking to terminate a lease as a result of a covenants or payment default.  The so-called Yellowstone Injunction, named after a 1968 Court of Appeals case, has protected tenants served with a notice of termination for over 50 years by preserving the status quo and staying any cure period, thereby giving tenants an opportunity to litigate the propriety of any alleged default before the lease was terminated.  Because once terminated a lease cannot be revived, tenants relied on this widely used and often granted injunction to preserve their interest in the leased premises.

Administrative Order 78/20 (AO/78/20), however, which remains in effect and which bars the submission of any “non-essential” new filings, was silent as to whether Yellowstone applications were considered “essential.”  As such, tenants effectively were precluded from seeking Yellowstone relief.  This is in stark contrast to Executive Order 202.8, which bars eviction proceedings, but did not bar lease terminations.  In essence, tenants were therefore forced to sit and watch their lease terminate, and hope that once the Courts open up, they would be able to seek relief from a terminated lease, despite longstanding caselaw to the contrary.

Yesterday, however, the Supreme Court, New York County, permitted the filing of an application for a Yellowstone Injunction. In Philippe MP LLC v. Sahara Dreams, LLC (no index number assigned), the Plaintiff, a restaurant in Defendant/landlord’s hotel, requested “essential” filing status for its application for a Yellowstone Injunction.  Specifically, the restaurant argued that as a result of the various Executive Orders prohibiting restaurants from offering table service, it was forced to lay off employees and cease operations.  As a result, the restaurant argued that the “casualty” clause in its lease was triggered, its rent was abated, and thus the amount the landlord sought in its notice to cure was defective rending the notice itself a nullity.

In its affidavit seeking “essential” filing status, the restaurant cited both its inability to operate, and also the potential hypocrisy created by the ban on evictions, without a corresponding moratorium of lease terminations.  The Hon. Lynn R. Kotler agreed, and deemed the filing essential.  As of the date and time of this publication, the request for a temporary restraining order has not been decided either way, but, at a minimum, the tenant was able to get into the Courthouse.  We will continue to monitor the progress of this case and update this article accordingly.


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

New Jersey Governor Phil Murphy signed Executive Order #142 on Wednesday, May 13, 2020, permitting suspended non-essential construction projects to resume starting, Monday, May 18, 2020 at 6:00 a.m. In his briefing this afternoon, Governor Murphy commended the efforts and progress the State has made to date against the spread and impact of the COVID-19 pandemic. While careful to note that the crisis is not over and that diligent social distancing efforts remain crucial, the Governor cited improved infection and hospitalization numbers as the basis to begin a measured re-opening of the State’s economy.

Beginning Monday morning, all construction projects not designated as essential under Executive Order 122 may resume, as may drive-in/drive-thru events and curbside pick-up for non-essential retail businesses. Jobsite restrictions will remain in place, however. The Executive Order requires that, at a minimum, active construction sites must institute the following policies:

a. Prohibit non-essential visitors from entering the worksite;

b. Engage in appropriate social distancing measures when picking up or delivering equipment or materials;

c. Limit worksite meetings, inductions, and workgroups to groups of fewer than 10 individuals;

d. Require individuals to maintain six feet or more distance between them wherever possible;

e. Stagger work start and stop times where practicable to limit the number of individuals entering and leaving the worksite concurrently;

f. Identify congested and “high-risk areas,” including but not limited to lunchrooms, breakrooms, portable restrooms, and elevators, and limit the number of individuals at those sites concurrently where practicable;

g. Stagger lunch breaks and work times where practicable to enable operations to safely continue while utilizing the least number of individuals possible at the site;

h. Require workers and visitors to wear cloth face coverings, in accordance with CDC recommendations, while on the premises, except where doing so would inhibit the individual’s health or the individual is under two years of age, and require workers to wear gloves while on the premises;

i. Require infection control practices, such as regular hand washing, coughing and sneezing etiquette, and proper tissue usage and disposal;

j. Limit sharing of tools, equipment, and machinery;

k. Where running water is not available, provide portable washing stations with soap and/or alcohol-based hand sanitizers that have greater than 60% ethanol or 70% isopropanol;

l. Require frequent sanitization of high-touch areas like restrooms, breakrooms, equipment, and machinery;

m. When the worksite is an occupied residence, require workers to sanitize work areas and keep a distance of at least six feet from the occupants; and

n. Place conspicuous signage at entrances and throughout the worksite detailing the above mandates.

The Executive Order also specifically notes that the protective equipment required under item h above must be provided by the employer at its expense. Construction site visitors who refuse to comply must be denied entry.

As with permitting essential vs non-essential construction projects, we expect that enforcement of the on-site safety procedures will be delegated to local authorities, with each municipality responsible for ensuring that all projects within its borders meet the State standards.

This represents a significant step in returning the economy to a more normal footing since April 8, 2020, when the Governor issued Executive Order 122 pausing all non-essential construction projects, other than emergency and make-safe work, beginning April 10, 2020.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

Since first issuing declarations of emergency in early March, the Governors of New York, New Jersey and Connecticut have been coordinating their COVID-19 response measures fairly closely, in recognition of the physical proximity and economic dependency of their States.

Each State is among each other’s top trade partners, and hundreds of thousands of people cross state lines for work every day (including over 400,000 residents of New Jersey and Connecticut who commute into New York City).  These connections have taken on a whole new significance with the arrival of the novel coronavirus — the single most significant measure being implemented to fight the spread of the virus is social distancing.

Since early March, as COVID-19 began to take hold in New York, Governor Cuomo has emphasized the challenges created by regional inconsistency in the imposition of social restrictions.  The Governors of New Jersey and Connecticut, along with four other states, acknowledged the risk in disparate approaches at various points, most recently announcing their intention to coordinate the gradual reopening of businesses over the coming months.

However, while the Governors have been aligned on many social distancing measures, their treatment of the construction industry has fallen increasingly out of sync since the initial implementation of workplace restrictions.

When the initial social distancing restrictions were put in place, New York, New Jersey and Connecticut were consistent in treating construction work as essential, enabling work to continue largely unfettered.  That changed for New York on March 27, 2020 when Governor Cuomo imposed significant restrictions on the scope of permissible construction work, but Connecticut and New Jersey remained the same.  The discrepancy between New York and New Jersey was the subject of an earlier post.

Two weeks later, New Jersey followed New York’s approach of narrowing the extent of permitted construction.  Again, no change was made by Connecticut.  In addition, even though both New York and New Jersey were on the same page about restricting non-essential construction, they were not aligned as to what constituted “essential” construction.  Plus, even if New Jersey had adopted New York’s criteria, the consensus would not have lasted long.  New York ended up making substantial changes to its essential business criteria just two days later.

So, as of now, the construction industry looks different in each of New York, New Jersey and Connecticut.  For reference, each State’s description of permissible construction is listed below.  But don’t get too comfortable. The criteria is expected to change in mid-May, as New York and New Jersey are expected to begin the transition to reopening businesses.

New York’s social distancing framework is currently scheduled to expire May 15, 2020, per Executive Order 202.18.  Governor Cuomo has begun laying out New York’s plan for reopening in a staged manner, both based on geography (areas with low infection rates first) and business type (safer businesses like construction and manufacturing).

Governor Murphy has not specified a date for terminating his “stay-at-home” order, but has confirmed his intention to coordinate with other states, which he believed would be a matter of weeks, not months.  What that coordination will look like is unclear.  Governor Murphy was asked about his plan earlier this week, when he announced the State’s “road map” of 6 principles to evaluate in determining whether the State is ready for business.  He said that New Jersey may consider opening the entire State at once, rather than by geographic area, and is also considering staging the opening of businesses based on significance to the economy and virus transmission risk level, giving manufacturing as an example of a less risky business sector.  It is not clear whether construction restrictions will be lifted early.

Connecticut’s Governor Lamont extended his State’s social distancing measures until May 20, 2020, but, as the Governor pointed out in an interview this week, it will not have any impact on the construction industry, which has never been subject to restrictions.

Stay tuned.

NEW YORK PERMITTED CONSTRUCTION:

Emergency construction, (e.g. a project necessary to protect health and safety of the occupants, or to continue a project if it would be unsafe to allow it to remain undone, but only to the point that it is safe to suspend work).

Essential construction:

  • construction for, or your business provides necessary support for construction projects involving, roads, bridges, transit facilities, utilities, hospitals, or healthcare facilities, homeless shelters, or public or private schools;
  • construction for affordable housing, as defined as construction work where either (i) a minimum of 20% of the residential units are or will be deemed affordable and are or will be subject to a regulatory agreement and/or a declaration from a local, state, or federal government agency or (ii) where the project is being undertaken by, or on behalf of, a public housing authority;
  • construction necessary to protect the health and safety of occupants of a structure;
  • construction necessary to continue a project if allowing the project to remain undone would be unsafe, provided that the construction must be shut down when it is safe to do so;
  • construction for projects in the energy industry in accordance with Question No. 14 in the FAQ at: https://esd.ny.gov/sites/default/files/ESD_EssentialEmployerFAQ_033120.pdf;
  • construction for existing (i.e. currently underway) projects of an essential business; or
  • construction work that is being completed by a single worker who is the sole employee/worker on the job site.

NEW JERSEY PERMITTED CONSTRUCTION:

Essential construction projects:

  1. Projects necessary for the delivery of health care services, including but not limited to hospitals, other health care facilities, and pharmaceutical manufacturing facilities;
  2. Transportation projects, including roads, bridges, and mass transit facilities or physical infrastructure, including work done at airports or seaports;
  3. Utility projects, including those necessary for energy and electricity production and transmission, and any decommissioning of facilities used for electricity generation;
  4. Residential projects that are exclusively designated as affordable housing;
  5. Projects involving pre-K-12 schools, including but not limited to projects in Schools Development Authority districts, and projects involving higher education facilities;
  6. Projects already underway involving individual single-family homes, or an individual apartment unit where an individual already resides, with a construction crew of 5 or fewer individuals. This includes additions to single-family homes such as solar panels;
  7. Projects already underway involving a residential unit for which a tenant or buyer has already entered into a legally binding agreement to occupy the unit by a certain date, and construction is necessary to ensure the unit’s availability by that date;
  8. Projects involving facilities at which any one or more of the following takes place: the manufacture, distribution, storage, or servicing of goods or products that are sold by online retail businesses or essential retail businesses, as defined by Executive Order No. 107 (2020) and subsequent Administrative Orders adopted pursuant to that Order;
  9. Projects involving data centers or facilities that are critical to a business’s ability to function;
  10. Projects necessary for the delivery of essential social services, including homeless shelters;
  11. Any project necessary to support law enforcement agencies or first responder units in their response to the COVID-19 emergency;
  12. Any project that is ordered or contracted for by Federal, State, county, or municipal government, or any project that must be completed to meet a deadline established by the Federal government;
  13. Any work on a non-essential construction project that is required to physically secure the site of the project, ensure the structural integrity of any buildings on the site, abate any hazards that would exist on the site if the construction were to remain in its current condition, remediate a site, or otherwise ensure that the site and any buildings therein are appropriately protected and safe during the suspension of the project; and
  14. Any emergency repairs necessary to ensure the health and safety of residents.

CONNECTICUT PERMITTED CONSTRUCTION:

The State’s original workplace distancing restrictions issued on March 20, 2020 by Executive Order 7H incorporated the Federal guidance on essential businesses, which included construction within its 16 “critical infrastructure sectors.”  Similar to Governor Cuomo’s approach, Governor Lamont directed Connecticut’s Department of Economic and Community Development (DECD) to issue specific guidance on what businesses were deemed essential.  Construction work is within the scope of several essential business categories on the DECD list, and comprises its own category as well, described as:

Construction including:
• all skilled trades such as electricians, HVAC, and plumbers
• general construction, both commercial and residential
• other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes
• planning, engineering, design, bridge inspection, and other construction support activities

The full DECD list of essential business can be found here.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

As we previously blogged, the New York City Council has introduced an expansive COVID-19 relief package, which includes a proposed bill requiring large “essential businesses” to pay premiums to certain essential, non-salaried workers.

Specifically, the proposed legislation would apply to “essential businesses,” as defined by the Empire State Development Corporation in accordance with Governor Andrew Cuomo’s Executive Order 202.6, that employ (or are permitted to employ) 100 or more persons.  Under the proposed legislation, such “large essential employers” must pay their employees premiums of (1) $30 for any shift of less than four hours; (2) $60 for any shift of between four and eight hours, inclusive; and (3) $75 for any shift of greater than eight hours.

Construction businesses who meet the definition of “large essential employers” are likely to wonder whether they must pay these premiums to employees covered by a collective bargaining agreement.  The short answer, at least as the proposed bill is drafted, is yes.

The City Council’s proposed legislation states that essential employees entitled to premium pay do not include employees “covered by a collective bargaining agreement,” but only if the subject collective bargaining agreement “expressly waives the provisions of this local law and provides comparable or superior benefits for essential employees.” (emphasis added).

Although it is not clear whether this legislation will be passed in its current form, several observations about the text of the proposed bill will be of interest to construction firms.

First, even if a collective bargaining agreement is amended in an effort to opt-out of the provisions of the new legislation, essential unionized employees must likely be paid the same or similar premiums payable to non-unionized employees.  As noted above, the bill in its current form would require large essential employers to provide “comparable or superior benefits,” even where the collective bargaining agreement waives the provisions of the new law.  Note, however, that the proposed legislation does not indicate what a “comparable or superior benefit” entails, and it remains to be seen how this provision will be interpreted if the legislation is passed in its current form.

Second, and by way of comparison, the proposed legislation goes a step further, in terms of influencing the contents of collective bargaining agreements, than does the New York City Earned Safe and Sick Time Act.  That law does not apply to employees in the construction industry covered by a valid collective bargaining agreement so long as the provisions of the law are expressly waived in the collective bargaining agreement.  The proposed premium pay legislation, by contrast, requires not just an express waiver of the new law in the collective bargaining agreement, but also the provision of “comparable or superior benefits” for essential employees.  Therefore, as written, the new legislation would not allow the union to opt-out of the law by simply agreeing to a waiver of premium pay.

Third, and as a practical matter, the concept of “essential workers” under the Governor’s Executive Order arises out of interim, emergency-type measures necessary to address the current COVID-19 pandemic.  Given the (hopefully) relatively short period of time that the Executive Order will remain in effect going forward, parties to few, if any, collective bargaining agreements will be able to realistically negotiate a timely and specific carve-out of the proposed legislation before its relief measures become moot.

We will continue to monitor the New York City Council’s pending legislation and provide additional updates as they become available.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

The New Jersey Housing and Mortgage Finance Agency (NJHMFA), a state agency dedicated to increasing the availability of and accessibility to safe, decent and affordable housing, unanimously voted to temporarily suspend rent increases at all eligible properties within the agency’s portfolio as a result of the COVID-19 pandemic.

This temporary suspension of rent increases will expire at the end of the State of Emergency upon rescission of Governor Murphy’s Executive Order No. 103. Thereafter, eligible properties within the agency’s portfolio seeking rent increases of up to 1.4% may do so only after providing 30-days prior notice to NJHMFA and residents. Any rent increases in excess of this amount must first be reviewed and approved by NJHMFA.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.