OKLAHOMA CITY (CN) – Crafts chain Hobby Lobby announced the closure late Friday of all stores and furlough of nearly all its employees after authorities in three states disputed claims that it should remain open during the coronavirus pandemic.
The Oklahoma City-based company said it is letting go of “nearly all store employees and a large portion of corporate and distribution employees” so they can take full advantage of enhanced unemployment benefits and rebates under the $2 trillion federal Coronavirus Aid, Relief and Economic Security Act passed into law last month.
“[W]e are ending emergency leave pay and suspending use of Company provided paid time off benefits (PPTO and Vacation) in accordance with the requirements outlined in the CARES Act (subject to State law requirements),” Hobby Lobby said in a written statement. “However, we will maintain medical, dental, life, and long-term disability benefits for employees while furloughed through at least May 1, 2020, and will pay the cost of employee premiums for these benefits on behalf of employees while furloughed without pay.”
The company said that returning employees will keep their original hire dates and any accrued paid time off and vacation benefits.
Hobby Lobby stores originally complied with local authorities’ orders to shelter-in-place and close non-essential businesses, but they reopened with signs stating stores were “operating as an essential business” and was “offering PPE mask supplies, educational supplies, office supplies and various components for at-home small businesses.”
Dallas authorities warned Hobby Lobby employees Thursday to “lock up and leave as soon as possible” as sheriff’s deputies physically closed its stores.
Dallas County Judge Clay Jenkins said the defiance “is a slap in the face to the businesses that are following this order, that a few outliers are putting the community in danger … if they have a lick of sense, they will close down before we get there.”
Jenkins said craft stores do not qualify as an essential business under federal law. His Safer at Home order limits the designation to healthcare, government, critical infrastructure, grocery stores and restaurants. He said violators face up to six months in jail and $1,000 in fines per day.
“There are plenty of places to buy yarn in your neighborhood that are in compliance with the order,” he said.
Also Thursday, Colorado authorities sent a cease-and-desist letter demanding the closure of all Hobby Lobby stores in the state.
“For the avoidance of doubt, and as you have been previously notified, Hobby Lobby is not a ‘critical business,’” Colorado Attorney General Phil Weiser wrote. “You are directed to immediately close all Hobby Lobby locations within the State of Colorado.”
Hobby Lobby agreed Wednesday to close its stores in Ohio after its attorney general, Dave Yost, sent a similar cease-and-desist letter.
“Hobby Lobby properly closed its stores during Ohio’s stay-home order. Now they’re open again — what’s changed?” Yost tweeted Wednesday. “Neither the order, nor the seriousness of the health threat, for sure.”
Hobby Lobby said it will reopen “in a responsible way” when the situation improves.
“We know our customers relied on us to provide essential products, including materials to make personal protective equipment, such as face masks, educational supplies for the countless parents who are now educating their children from home, and the thousands of small arts and crafts businesses who rely on us for supplies to make their products,” the company said in a statement.
It added, “Over the past several weeks, we implemented several best practices to provide a safer shopping environment, including the installation of physical barriers between customers and cashiers, enhanced cleaning, and the enforcement of social distancing measures.”
Hobby Lobby has over 800 stores and more than 37,000 employees.