Defense Production Act: Order Directing Continued Operation of Meat and Poultry Processing Facilities for the National Defense

By Executive Order (“EO”) dated April 28, 2000, President Trump invoked the authority of the Defense Production Act (“DPA”) to direct that meat and poultry processing facilities continue operations notwithstanding the COVID-19 pandemic. As explained in our previous Legal Updates,¹ the DPA gives the President “an array of authorities to shape national defense preparedness programs and to take steps to maintain and enhance the domestic industrial base.” 50 U.S.C. § 4502(a)(4).

The Executive Order

The EO makes the determination required by DPA section 101(b) (50 U.S.C. § 4511 (b)) to activate the President’s powers under the statute to intervene in the commercial meat and poultry market. The EO makes the policy finding that it is important to national defense that processors of beef, pork, and poultry carry on operations and fulfillment of orders to ensure a continued supply of protein for the American people. The EO notes that recent outbreaks of COVID-19 have led to reduction in production capacity at such facilities. It also notes that some state actions have led to the complete closure of large processing facilities. According to the EO, those actions may differ from, or be inconsistent with, recent joint guidance from the Centers for Disease Control (“CDC”) and the Occupational Safety and Health Administration (“OSHA”) regarding operation of meat and poultry facilities.

The CDC/OSHA Interim Guidance ("Guidance") issued on April 26, 2020, recognizes that meat and poultry processing facilities are a part of the nation’s critical infrastructure. The Guidance contains a detailed explanation of measures necessary to ensure safe operations of meat and poultry processing facilities.

Given the EO invoking the DPA, the Department of Labor ("DOL") issued a Statement of Enforcement Policy (“Statement”) on April 28, 2020, to "clarify the effect of the Joint Meat Processing Guidance." DOL indicates that OSHA will use "enforcement discretion" for employers that adhere to the Guidance. DOL notes expressly that "[i]t is important that employers seek to adhere to this [Interim] Guidance." Employers who determine that certain measures are not feasible "should document" their reasons. OSHA will take into account "good faith attempts" to follow the Guidance and "does not anticipate" citing employers who do so. In particular, DOL states that because of the DPA invocation, no part of the Guidance "should be construed to indicate that state and local authorities may direct" closure of a processing facility or operation of such a facility with procedures other than the Guidance. DOL points out that courts likely will consider compliance with OSHA guidance as evidence favoring the employer in the event of litigation. DOL states specifically that given the DPA invocation, where an employer has "demonstrated good faith attempts" to comply with the Guidance and is sued for workplace exposures, DOL will consider participating in that litigation. However, DOL also will consider participating in litigation by workers, if their employer has not taken good faith steps to comply with the Guidance.

Key Actions

Section 2 of the EO delegates authority to the Secretary of Agriculture (“Secretary”) under the DPA to issue rated orders and allocate resources with respect to “food supply chain resources, including meat and poultry” during the national emergency caused by the outbreak of COVID-19 in the United States.

Section 2 of the EO further instructs the Secretary, in consultation with other agencies, to determine the proper nationwide priorities and allocation of all the materials, services, and facilities necessary to ensure the continued supply of meat and poultry consistent with the CDC and OSHA guidance referenced above.

Finally, the EO directs the Secretary to issue orders and adopt and revise rules and regulations such as may be necessary to implement this order.

Analysis

The authorities delegated to the Secretary, include, for example, the authority to allocate and prioritize personal protective equipment to meat and poultry processing facilities and to adjust or augment processing equipment, transportation, and other resources to facilitate continued and safe supply. However, the EO does not address certain potential issues that it presents. For example:

• The EO does not address employees in the meat processing facilities, although the CDC/OSHA Interim Guidance identifies specific measures to be taken to ensure safe operations and related considerations and the DOL Statement sheds light on the position DOL will take with regard to litigation if the Interim Guidance is followed. How the Interim Guidance interacts with the priorities and allocations of resources as necessary is within the delegation to the Secretary.
• Although the DPA generally provides for immunity from liability for complying with DPA orders, rules, and regulations (50 U.S.C. § 4557) (for example, disputes about priorities in filling orders), the EO does not address potential employer liability for employees who must report to previously closed facilities. The DOL Statement indicates that DOL may participate in subsequent litigation. The authority under the Act is broad such that, for example, resources to modify working conditions and add protective measures can be made available quickly.

We anticipate that USDA may issue further guidance or instruction with regard to the application of the DPA to meat and poultry processing facilities