Auto Sales Remain Subject to State and Local Orders Despite Designation as Essential by CISA

The Guidance now specifies that amongst those essential individuals needed “to maintain the services and functions Americans depend on daily and that need to be able to operate resiliently during the COVID-19 pandemic response” are “Workers critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers.”

This has led many dealers to question if the Guidance allows, or will cause, restrictions to loosen in those states where an existing government order limits auto sales to online transactions with restricted delivery or designates auto sales as “non-essential.”

The Guidance provides clarity that dealership sales are permitted in jurisdictions with orders that specifically reference the CISA regulations in defining what constitutes an “essential service.” Put more simply, if a particular jurisdiction gets its definition of “essential” from CISA, then automobile sales can be considered an essential service in that jurisdiction. With that being said, even if your state’s executive order adopts the CISA Guidance, dealers should still carefully examine their local orders to see if showrooms may be re-opened as local orders may be more restrictive.

In sum, if an executive order does not explicitly reference CISA, the Guidance does not change any existing order issued by a state, county or city. Restrictions or prohibitions against auto sales are governed by executive order in the state where a dealership is located. Additionally, some counties and cities have issued stay-at-home orders that are more restrictive than statewide orders. An advisory memorandum issued on March 28, 2020, by CISA specifies that the Guidance is “advisory in nature,” and should not be considered “a federal directive or standard.”

The memorandum further confirms that “jurisdictions should add or subtract essential workforce categories based on their own requirements and discretion.” Thus, the mandates contained in any state, county or city order remain in effect until modified or lifted by the issuing jurisdiction, or clarified through interpretive guidance issued by that authority. While the Guidance may influence the contents of a future state, county, or city order, it should not be relied upon by a dealership to conduct auto sales where such activity is presently restricted or prohibited.

The CISA advisory memorandum and Guidance version 3.0 can be found here.