How In-House Counsel Can Handle a Government Shutdown

By Casey C. Sullivan, Esq. on October 01, 2015 | Last updated on March 21, 2019

A government shut down over Planned Parenthood has been averted. Yesterday, Congress went to the brink of shutting down the federal government over Planned Parenthood funding and pulled back at the last minute. But the compromise could only be temporary, according to The Washington Post. And of course, there's always the possibility that another political disagreement could lead to a funding impasse in the future and subsequent shutdown.

What is in-house counsel to do when the government shuts down?

Some Fed Workers Remain, but Few

First, a government shutdown doesn't signal a vacation from the rule of law, so don't go telling John in engineering that now's a great time to slip in those defeat devices. The EPA, IRS, and SEC don't board up their windows and take off, though they do send most of their workers home.

Indeed, there are federal laws governing federal shutdowns. Regulations divide government workers into "essential" and "non-essential" categories (or "excepted" and "non-excepted," if you're being overly polite). Essential workers stay on, non-essential workers go home. There are 1.3 million essential employees, including government lawyers and high-level regulators, who will stick around in the event of a shutdown. They'll be swamped, but they'll be present.

Agencies that conduct federal inspections will likely slow to a crawl, but not disappear. In 2013, for example, OSHA's inspection force was reduced over 90 percent by the shutdown. The NLRB simply shutdown, as all but 11 employees were furloughed. The USDA, however, maintained regular food safety inspections.

What You Need to Do

As best you can, continue acting like you always would. If your company is working with federal regulators or authorities, continue to meet deadlines and carryout pre-planned schedules as you otherwise would. If you have existing business, contact your federal point person so that you'll be informed of any disruptions. (Make that call before the shutdown, in case your go-to is non-essential.)

If your business is itself a federal contractor, well, you might be temporarily out of work. Similarly, if you rely on small business loans, consider alternatives during a shutdown. You can expect significant delays processing small business loans from the SBA.

Is shutting down the federal government irresponsible? Sure. But you and your company can't follow suit.

Planning is the best approach to dealing with a government shutdown. (They seem to be coming every two years now, so you can go ahead and mark your calendar.) If your company depends directly on the government for revenue, it should have a financing plan in place. If you are engaged in regulatory or legal work with the feds, you should be ready for those matters to be delayed. A shutdown won't be pretty, but the greatest impacts can be avoided if you're prepared.

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