April 30, 2020
On April 28, 2020, President Trump invoked powers under the Defense Production Act of 1950 (50 U.S.C. 4501 et seq.), finding that COVID-19 has significantly disrupted the food supply chain with regard to the meat and poultry industry. President Trump specifically determined that the beef, pork and poultry industries manufacture critical materials and need to remain operational during the COVID-19 emergency. In an executive order, the president vested authority with Agriculture Secretary Sonny Perdue to take any appropriate action under his authority to ensure that the meat and poultry industries remain operational.
The Defense Production Act of 1950 gives the president considerable power to require businesses to prioritize performance under contracts necessary for the national defense, such as fulfilling contracts for the production and supply of meat and poultry products. This law was designed to ensure businesses deemed critical for national defense remain operational and produce the most critical products. With the closure of several large meat-processing facilities, the nation’s grocers, restaurants and distributors have become increasingly concerned about the industry’s ability to maintain an adequate supply of products.
Secretary Perdue is required to promulgate guidance on how the U.S. Department of Agriculture (USDA) plans to enforce this executive order. McGuireWoods will continue to monitor the situation. So far, the USDA has stated the following.
Questions remain as to how USDA will select specific companies to remain operational and how industry will respond if there is a shortage of workers to maintain normal plant operations.
Even more important is whether regulations stemming from the executive order will extend protections to the meat and poultry industry from downstream liability resulting from operation during COVID-19, from either a products liability or employment standpoint. The industry should continue to implement safety procedures for the workforce and monitor any lapses of USDA inspectors in facilities that are required to remain open.
Because discretion is vested with Secretary Purdue, McGuireWoods will continue to monitor any guidance promulgated by USDA that may clarify industry’s options to remain open or closed.
McGuireWoods’ food and beverage team has specific regulatory, compliance and litigation experience assisting USDA-regulated industry and stands ready to assist clients with compliance. We have published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.
CDC: Implementing Safety Practices for Critical Infrastructure Workers Who May Have Had Exposure to a Person with Suspected or Confirmed COVID-19
CISA: Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response
McGuireWoods has a 24-hour hotline to answer time-sensitive food safety/labeling and product labeling inquiries. This service provides real-time answers to questions on topics such as product labeling, manufacturing practices and regulatory compliance, among others. Email firstname.lastname@example.org or call +1 804 775 7878. Learn more about McGuireWoods’ food and beverage industry team.