When news first hit that the COVID-19 outbreak was requiring the shutdown of businesses and that personal care services had been deemed non-essential, Larry and Jill Cromwell were unaware how deeply their Sacramento hair salon chain would be impacted.
“What’s worrisome is whether we are collateral damage in some sort of political or ideological battle because PPP doesn't work due to the rules attached and to my knowledge that’s the only fix available to correct the situation,” Cromwell told the Southern California Record.
Prior to the coronavirus plague, the Cromwells had three bustling hair salons in Folsom called Maribou serving 5,000 customers a month with 85 employees. Today, the couple is $100,000 in debt despite having received Paycheck Protection Program (PPP) money on May 4. PPP was created to help businesses hold on to their employees during the coronavirus plague.
Having hair styled at a hair salon
| Pixabay
“We have eight weeks to use it to qualify for forgiveness,” said Cromwell, whose salons had been in business since 2006.
“Seventy-five percent must be used to fund payroll but our salons aren’t open so we would have to take our staff off unemployment, pay them less than what they're receiving on unemployment and they don't want to come off unemployment. That’s part of what’s factored in for forgiveness eligibility. Otherwise, PPP money becomes a two-year turnaround loan at a super high rate.”
The Cromwells are among the 500,000 hair salon owners who are members of the Professional Beauty Federation of California (PBFC), which has sued Gov. Gavin Newsom and 13 other state officials in the Western Division of the Central District of California in a bid to re-open sooner rather than later.
“A business that’s shut down because it's been deemed nonessential is akin to taking property without just compensation,” said attorney Bilal A. Essayli of Newport Beach. “Many of these business owners have no alternative source of income and some don't qualify for the aid that's been made available or unemployment benefits. The only way they can survive is to actually be open and accept clients.”
At the core of the lawsuit is Gov. Newsom’s Executive Order N-33-20, which was issued on March 19, in response to the coronavirus and which deemed personal care services, such as hair salons and barbershops non-essential.
“The Governor’s Order has no sunset provision or expiration date,” wrote plaintiff’s attorney Harmeet Dhillon in the May 12 complaint. “The Governor nevertheless continues to use the emergency to exercise unlimited power over Plaintiffs, having declared their professions, without evidence or due process, as 'non-essential,' and therefore prohibited, subject to criminal prosecution and license revocation.”
As of May 19, the Department of Health reported 84,057 positive coronavirus cases statewide and 3,436 fatalities.
“We strongly believe that these orders violate substantial constitutional rights and property interests,” said Essayli who sued Gov. Newsom on behalf of a City of Newport Beach councilman over beach closures. “It’s the government that has the burden of showing that these orders are justified and we don't believe they've met that burden.”
As previously reported, Gov. Newsom’s Resilience Roadmap for how industries will reopen in 4 stages was unveiled on April 28. The State is currently in Stage 2 while hair and nail salons and similar establishments are slated to remain closed until Stage 3 along with other alleged higher risk business segments, such as gyms, movie theatres and church services.
“The government has broad discretion to protect lives in cases of emergency,” said Los Angeles attorney Dylan Ruga. “Here, the plaintiffs will need to prove that Governor Newsom's decisions were arbitrary and not narrowly tailored to further the government's interest of reducing the spread of COVID-19.”
On May 20, John D. Echeverria, the state of California's deputy attorney general, opposed the Professional Beauty Federation of California's request for an order that would temporarily, preliminarily and permanently enjoin and prohibit the state from enforcing Gov. Newsom’s executive order as to practicing their profession.
“The staged reopening plan is carefully crafted, based on data and public-health expertise, to mitigate and manage the risks of the reopenings,” Echeverria wrote on behalf of Gov. Newsom in his Defendants’ Opposition to Plaintiffs’ Ex-Parte Application for a Temporary Restraining Order. “Without such a measured approach, the risk of a resurgence is significant; and with such a resurgence comes the likelihood of significant increases in new cases and deaths, and the potential to overwhelm our health system that California has thus far been able largely to avoid.”