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The COVID Project

The interconnected economy and the broken leg

This industry is the interconnected economy in its purest form. It sells its labor into every other industry and into government; its people work on premises it does not own; it hires through fingerprint sites, licensing offices, clinics and consulates it does not control; it moves its workers through transit it does not run; and its revenue is set by the operating level of customers whose operating level the orders fixed. An order on any of those is an order limiting commerce, travel or group meetings, and an operation of this industry delayed, interrupted or terminated because of it is suspended due to it. The orders of 2020 and the first half of 2021 compelled this industry to dismantle its operation placement by placement, contract by contract, post by post, crew by crew and seat by seat; the orders' own reopening steps show that the restoration ran into and through the third quarter of 2021; and the clause's grammar, Tri-State's definition and the Notice's own words make the continuing suspension a suspension "during the calendar quarter."

The mechanisms

Six mechanisms carried orders addressed to others into this industry's operation. Supply chain and borders: the consular suspension, the H-2B rules, the entry proclamations, the land-border notices and the Title 42 order closed the cross-border movement of the industry's seasonal labor from March 20, 2020 to March 31, 2021 and rationed it to September 30, 2021; the Defense Production Act orders and the HHS scarce-materials designation governed the personal protective equipment that every reopening order required the industry to furnish its cleaners, guards and placed workers.168 Workforce, schools and child care: the school closures of the spring of 2020 and the remote and hybrid year of 2020-21 removed the industry's hourly workers, disproportionately parents, from their assignments; the FFCRA mandate through December 31, 2020 and the State paid-leave mandates compelled the industry to pay them not to work; the isolation and quarantine orders removed every infected and exposed worker from every assignment for ten to fourteen days through the third quarter of 2021.169 Travel and gatherings: the interstate traveler quarantines of New York, New Jersey, Connecticut, Massachusetts, Hawaii, Alaska, New Mexico, Kentucky, Pennsylvania and Chicago reached every traveling placement and event crew, and the gathering limits of every State and metro ended the event calendar on which event security and hospitality staffing run, from March 2020 through the spring of 2021 and, in Honolulu, through the quarter.170 The trade shows, seasons and recurring events those orders cancelled are listed in the Library's meetings collection, with the venue orders in force on their dates. Courts and public offices: the closures and access limits of every courthouse, county building, clerk's office, motor-vehicle office and fingerprint site converted or closed the venues in which the industry's guards are posted, its buildings are cleaned and its hiring paperwork is processed; the Fayette County Clerk, through which every vehicle transfer and deed in that county passes, was closed to the public from March 17, 2020 to April 12, 2021.171 Transit: the transit agencies' service cuts, rider caps and rear-door boarding of 2020 and the conveyance order and TSA directives from February 1, 2021 conditioned every commute of a transit-dependent workforce.172 Health care as counterparty: the visitor bans and elective-procedure suspensions of 2020 idled hospital, clinic and nursing-home placements and housekeeping contracts; the nursing-home testing rule reached staff "under arrangement" from September 2, 2020; the Healthcare ETS bound every "healthcare support service" from June 21, 2021; and the health-care-worker mandates of August and September 2021 named the industry's people as "contract staff," "contractors" and providers of "custodial services."173

Counterparty orders as orders

The statute's object is "commerce, travel, or group meetings," not the employer's premises. The Notice's Q&A-12 applies the clause exactly so, making an employer eligible "because its operations have been suspended due to the governmental order that suspended operations of its supplier," and the United States told the Ninth Circuit the same:174

a business may be suspended 'due to' a government order addressing a third partyBr. for Appellees at 41

For this industry the counterparty is not a supplier of parts; it is the premises on which the industry's product is delivered. The supplier of a staffing agency is the customer's plant, office or hospital; the supplier of a janitorial contractor is the building it cleans; the supplier of a security company is the venue it guards; the supplier of a landscaper is the consulate that issues its crew's visas and the garden center that sells its plant material; the supplier of a call center is the customer's contract and the building that houses the floor. Each was closed, emptied, capped or conditioned by order, and the operations that depended on it were suspended in part because of the order in the only sense the statute uses. The essential-list classifications state the point in the orders' own words: Maryland admitted "Staffing and/or payroll services" only as "Supporting Firms" to businesses on the critical-infrastructure list, which is a legal statement that the staffing agency's permission to operate was its customer's permission to operate.175

The textual point

The clause reads "is fully or partially suspended during the calendar quarter due to orders." The phrase "during the calendar quarter" modifies "suspended"; it asks whether the suspension existed at any time in the quarter, not whether an order was issued in or addressed to the quarter. Congress did not write "orders in effect during the calendar quarter."176 Tri-State holds that a suspension includes a "delay" and that causation is but-for.177 The Notice recognizes both propositions: Q&A-22 makes an employer whose suspension ends in the middle of a quarter eligible for the whole quarter, and Q&A-16 treats the time an employer needs to move between modes of operation as part of the suspension where the delay exceeds two weeks.178 A placement terminated in March 2020 because the customer's plant was ordered closed, restored only when the customer rehired under the plant's reopening order, and re-terminated by the winter order was delayed by those orders on every day between, and the delay did not end on the day the last order lifted; it ended when the customer's headcount returned, which the orders' step dates fix as the earliest possible day.

The restoration arithmetic for this industry

What the orders compelled this industry to dismantle is recorded in the orders themselves and in the public payroll series. Placements: temporary-help payrolls fell from 2,888,100 in February 2020 to 1,950,400 in April 2020, a loss of 937,700 in two months, because the plants, offices, stores, hotels and venues in which the workers were placed were ordered closed; the customer sites were readmitted by steps the orders fixed (manufacturing under written-plan and screening rules from May 2020; offices at twenty-five and fifty percent between May 11 and June 22, 2020, cut again between October 14 and December 26, 2020, and freed between April 4 and June 30, 2021; venues closed through the summer of 2020, capped or closed through the winter, and freed between April and July 2021); and no placement could return to an office before that office's cap lifted, to a venue before that venue's, or to a call floor before the telework command that emptied it ended, so that the last of the dates on which restoration could begin fell between April 4 and July 1, 2021, and the restoration itself, which runs at the pace of the customer's rehiring, ran into and through the quarter.179 Contracts: janitorial contract volume is tied to occupancy, and the offices whose occupancy the orders held to zero, twenty-five, fifty and ten percent between March 2020 and June 2021 were not reoccupied on the day the caps lifted; New York's exposure-prevention plans and the workplace standards of California, Virginia, Oregon and Washington fixed the protocols under which they were cleaned through the quarter. Posts: the venues at which event security is billed reopened at full capacity between April and July 2021 in most metros and in Honolulu not at all in the period, and the proof-of-vaccination orders of August and September 2021 changed what the post at the door did. Crews: the landscaping labor pathway was closed from March 20, 2020 to March 31, 2021, through the hiring windows of two seasons, and the May 25, 2021 rule rationed the replacement to 22,000 visas nationwide through September 30; a crew that could not be hired in the hiring window was not on the job on July 1, 2021. Seats: call floors ordered to zero in New Mexico, closed in Delaware, marked "No" in Pennsylvania and ordered remote in a dozen States between March 2020 and June 2021 were reoccupied at the pace the telework commands' expiry allowed (April 4, 2021 in Pennsylvania; May 24 in Michigan; June 4 in New Jersey; June 15 in California; June 30 in Maine; in Oregon the office prohibition was last applied in any county on May 6, 2021 under a framework that ran to June 30, 2021) and were placed under face-covering orders, airborne-transmission controls on every indoor workplace, and workplace standards through the quarter. Credentials: security-guard permits extended by order in 2020 because the issuing offices were closed came due for renewal in 2021 at offices that reopened by appointment; fingerprint checks suspended by order in North Dakota to April 30, 2021 and in Minnesota to May 27, 2021 were taken thereafter at sites that had been closed for a year; the Fayette County Clerk resumed in-person transactions on April 12, 2021, and Lexington's government buildings reopened to walk-in business on June 11, 2021. An employer whose operation was ordered suspended through June 30 was not walking normally on July 1, and the orders' own step dates fix the arithmetic.180

What was still in force when the general restrictions ended

When the last office and customer-site caps lifted in June 2021, the following were in force on July 1, 2021 and are relied on as the orders they are: the Healthcare ETS at every health-care customer site; the federal contractor, workplace and building orders; the CDC conveyance order and TSA directives; the entry proclamations, land-border notices, Title 42 order and inbound-testing order; the FY2021 H-2B rule; the CMS testing, vaccination-offering and visitation rules; the State workplace standards of California, Virginia, Oregon and Washington; the State emergencies, twenty-five of which were still in force on September 21, 2021; the isolation and quarantine orders; and the paid-leave mandates of three States. To them the quarter added, each from its own date: the New York HERO Act plans (August 5, 2021) and their activation (September 6, 2021); the vaccination and testing mandates of fourteen States and the District of Columbia and of the largest metros, issued in July, August and September 2021, whose definitions reach contract staff; the Delta-wave face-covering orders of the States and metros, airborne-transmission controls on every indoor workplace and customer site; and the school face-covering, testing and staff-vaccination orders of the 2021-22 year.181 The quarters section states them with dates. They are not the residue of a suspension; they are orders limiting commerce, travel and group meetings in force during the calendar quarter, and for this industry the largest of them were written to reach its people by name.

  1. Ex. FED-327; Ex. SEC-19-018; Ex. SEC-19-005; Ex. SEC-19-006; Ex. SEC-19-007; Ex. SEC-19-008; Ex. FED-200; Ex. FED-207; Ex. FED-208; Ex. FED-232; Ex. FED-255; Ex. FED-037; Ex. FED-042; Exec. Orders No. 13909, 13910, 13911 and 13917 (Ex. FED-070; Ex. FED-071; Ex. FED-072; Ex. FED-073); HHS, Notice of Designation of Scarce Materials or Threatened Materials (Ex. FED-074). ↩
  2. Ex. FED-170; Ex. FED-171; Ex. AGY-ST-LABOR-WORKPLACE-003; Ex. AGY-ST-LABOR-WORKPLACE-005; Ex. AGY-ST-LABOR-WORKPLACE-004; Ex. MET-SAN-023; Ex. MET-SAN-024; Ex. MET-SAC-016; Ex. MET-RIV-017; the school orders stated in the layers section (the counterparties). ↩
  3. The traveler-quarantine instruments stated in the layers section (the interconnected economy: travel and gatherings); Haw. traveler quarantine (Ex. HI-003); Chicago Emergency Travel Order (Ex. MET-CHI-019); Pa. Sec'y of Health, Order for Mitigation Relating to Travel (Nov. 17, 2020; eff. Nov. 20, 2020) (Ex. PA-021); Honolulu Emergency Orders No. 2021-11 and 2021-13 and the Safe Access O'ahu order (Ex. MET-HNL-032; Ex. MET-HNL-033; Ex. MET-HNL-037). ↩
  4. The sector regulators and the counterparties (courts and public offices) in the layers section; Fayette County Clerk closure notice (Mar. 27, 2020) (Ex. MET-SDF-021); notice that the office remains closed to the public until at least July 6, 2020 (May 19, 2020) (Ex. MET-SDF-022); reopening for in-person transactions (Apr. 12, 2021) (Ex. MET-SDF-036) (the Clerk's closure from Mar. 17, 2020, first noticed Mar. 16-19, 2020, is described in the text without an exhibit for the first notice). ↩
  5. The transit instruments stated in the layers section (the counterparties: transit); Ex. FED-020; Ex. FED-051; Ex. FED-052. ↩
  6. CMS, QSO-20-13-Hospitals (screening of every entrant) (Ex. FED-096); Ex. FED-092; Ex. FED-168; Ex. FED-094; Ex. FED-156; Ex. SEC-19-009; Ex. SEC-19-023; Ex. SEC-19-027; Ex. SEC-19-026; Ex. SEC-19-024; Ex. SEC-19-025; Ex. MD-058; Ex. RI-072; Ex. CT-051; Ex. MA-067. ↩
  7. Notice 2021-20, 2021-11 I.R.B. 922, Q&A-12, at 928-29; Br. for Appellees at 41. ↩
  8. Ex. SEC-19-035, ¶ o; Ex. PA-004; Ex. DE-005. ↩
  9. CARES Act § 2301(c)(2)(A)(ii)(I), 134 Stat. at 347-48; I.R.C. § 3134(c)(2)(A)(ii)(I). ↩
  10. Tri-State at 9, 19. ↩
  11. Notice 2021-20, Q&A-22, at 932; Q&A-16, at 930. ↩
  12. Bureau of Labor Statistics, Current Employment Statistics, seasonally adjusted series CES6056132001 (temporary help services), mirrored at FRED series TEMPHELPS (Ex. SEC-19-040) (context; the 937,700 figure); the step dates of the office, manufacturing and venue orders, with exhibit identifiers, are stated in the layers section (the fifty States; the winter re-tightening and the 2021 transition) and quarter by quarter in the quarters section. ↩
  13. Ex. NY-136; Ex. NY-127; Ex. CA-024; Ex. VA-037; Ex. OR-041; Ex. AGY-ST-LABOR-WORKPLACE-055 (the protocols through the quarter); Ex. SEC-19-016; Ex. MET-MSY-029; Ex. MET-SFO-011; Ex. MET-HNL-035; Ex. MET-SEA-001 (the proof-of-vaccination orders); Ex. FED-327; Ex. SEC-19-005; Ex. SEC-19-006; Ex. SEC-19-007; Ex. SEC-19-008 (the labor pathway); Ex. PA-033; Ex. MI-054; Ex. NJ-051; Ex. CA-029; Ex. OR-043; Ex. ME-060 (the telework expiry dates); Ex. MS-012; Ex. NY-014; Ex. ND-018; Ex. MN-011; Ex. MET-SDF-021; Ex. MET-SDF-035 (the credential and office instruments). ↩
  14. The quarters section, the third quarter of 2021 (each instrument with issuer, date, operative clause, enforcement and status); Kaiser Family Foundation, State COVID-19 Data and Policy Actions (Sept. 21, 2021) (Ex. LAW-247) (the twenty-five emergencies on Sept. 21, 2021). ↩