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A small business in Pennsylvania says orders to close “non-essential” establishments and force workers to stay home to stop the spread of the coronavirus are violating the rights of the company and its employees.
Schulmerich Bells, a Hatfield, Pa. maker of handbells for musicians, filed a class-action lawsuit alleging that the way the state imposed its closure orders is wrongly taking away business and wages — and it’s happening during the 85-year-old company’s most important time of year.
“It shocks the conscience, and is arbitrary and capricious, to allow employees — and the small businesses that employ them — to privately bear without compensation the cost of the COVID-19 closure orders, orders which were issued for the public purpose of slowing the spread of the novel coronavirus across Pennsylvania,” the Philadelphia federal lawsuit said.
The orchestral-quality bell maker is suing, along with two laid-off workers, who say they have specialized skills that may not transfer to other lines of work. The company, which is the world’s largest producer of handbells, had to lay off nine of its 20 workers.
The machinist and assembly floor workers started the month of March at work, but now they are “solely concerned with surviving day-to-day and left to wonder whether they will ever be allowed to return to work — or if their employers and their jobs will still exist once the governor’s orders are finally lifted.”
Gov. Tom Wolf ordered the temporary closure of non-essential businesses on March 19, joining approximately 30 states with similar orders. The state had 4,087 confirmed cases and 49 deaths from the coronavirus as of Monday, according to the state’s Department of Health.
America now has the world’s largest number of confirmed cases of COVID-19, 144,672 as of Monday. 2,575 people have died from the virus, according to data tracked by Johns Hopkins University’s Center for Systems Science and Engineering.
The owner of Schulmerich Bells, Jonathan Goldstein, told MarketWatch he’s not trying to challenge the state’s authority or question its need to close down non-essential business given the circumstances. The closures are an “important and necessary and vital part” of the fight against the outbreak, he emphasized.
“But I’m here to tell you if the government came to you and told you we have to level your house to save this city, you would find it most unsatisfying to get a no-interest loan to rebuild your house,” said Goldstein, an attorney, who is also representing his company.
Schulmerich Bells’ busiest time for repair and refurbishment is after the Christmas season concerts and before Easter, so the closure now hurts even more, he said.
Goldstein filed the case just before the $2 trillion stimulus bill became law last week.
The stimulus package provides $350 billion in forgivable loans for small businesses, along with extra $600 weekly unemployment payments on top of state payments and $1,200 direct checks to many Americans. The federal government forgives the principal amount in the stimulus’ small business loans if the business uses the money for approved purposes and maintains the average size of its workforce.
Goldstein is looking into how the stimulus applies to Schulmerich Bells, but notes he’s suing the state for damages, not the federal government.
Goldstein said it was “devastating” to have to issue layoffs to people who lost their job through no fault of their own.
Across the country, a record 3.28 million workers filed jobless claims between March 15 and March 21. Almost 379,000 of those claims came from Pennsylvania, according to Labor Department statistics. That’s a 2,354% increase in statewide claims from two weeks earlier, data show.
Businesses find out if they are “essential” or not by emailing the state, Goldstein said. The state doesn’t offer reasons for its determinations, he said, calling the process an “arbitrary black box and it doesn’t pass constitutional muster.”
Many small businesses have just a only a matter of weeks to stay afloat without cash flow, experts say.
“Like many small businesses in Pennsylvania and across the country, we did not anticipate this sort of shutdown,” Goldstein added. “Most small businesses operate on a month or two of cash and beyond that, we’ll really struggle.”
A spokeswoman at Wolf’s office said the office hadn’t been formally served yet, and it would review the suit at that point.
