NY District Court Expands the Reach of the FFCRA

By Opinion and Order dated August 3, 2020 in the case of State of New York v. United States Department of Labor, Judge J. Paul Oetken, of the United States District Court for the Southern District of New York, invalidated four key components of the regulations issued by the Department of Labor (“DOL”) clarifying the rights and obligations of employees and employers under the Families First Coronavirus Response Act (“FFCRA”). Employers should be aware of these recent changes in the law, as the court’s ruling may dramatically expand the reach of the FFCRA.

Background

First, a quick chronology. As addressed in our earlier client alert, the FFCRA, which includes the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) and the Emergency Paid Sick Leave Act (“EPSLA”), was enacted to provide federally subsidized paid leave to employees who are unable to work due to the effects of COVID-19.

On April 1, 2020, the same day the FFCRA was enacted, the DOL published its final rules interpreting the FFCRA (“Final Rules”). Subsequently, New York State filed the instant suit in the Southern District of New York challenging specific sections of the Final Rules as exceeding the DOL’s authority under the Administrative Procedure Act.

Finally, in its elaborately reasoned August 3 Opinion and Order, the district court vacated various segments of the Final Rules relating to (1) the work-availability requirement, (2) the definition of health care provider, (3) intermittent leave, and (4) documentation requirements.

1. Work-availability Requirement

The EPSLA provides paid leave to employees who are “‘unable to work (or telework) due to a need for leave because’ of any of six COVID-19-related criteria” and the EFMLEA provides paid leave to employees who are “unable to work (or telework) due to a need for leave to care for . . . [a child] due to a public health emergency.” The DOL’s Final Rules, however, exclude leave eligibility for employees whose employers “do[] not have work[,]”which the court refers to as the “work-availability requirement.” The DOL reached this conclusion by interpreting the terms “due to” and “because” as requiring a strict but-for causal relationship between the employee’s need for leave and the qualifying condition. The DOL rationalized that if the employer lacks work for the employee, the employee could not be found to have left work for any qualifying condition because “the employee’s qualifying condition would not be a but-for cause of their inability to work”. Applying the long-standing Chevron standard (see Chevron U.S.A. Inc., v. Natural Resources Defense Council, 467 U.S. 837 (1984)), the court rejected that reasoning and found instead that, among other reasons, the work-availability requirement “is an enormously consequential determination that may considerably narrow the statute’s potential scope.” Thus, the fact that there may not be sufficient work for the employee under the current economic environment will not, alone, disqualify the employee from receiving additional paid leave benefits.

2. Definition of Health Care Provider

Under the FFCRA, an employer may elect to exclude a “health care provider” from receiving paid leave benefits. The definition of “health care provider” under the FMLA includes doctors and “any other person determined by the [DOL] to be capable of providing health care services.” The DOL regulation expanded the definition of health care provider—thus, significantly narrowing the scope of the statute—to be “anyone employed” at a doctor’s office, medical school, health care center, etc., and “any individual employed by an entity that contracts with any of these institutions.” Indeed, the DOL candidly conceded that the definition would extend to “an English professor, librarian, or cafeteria manager at a university with a medical school.” The court, however, held that the statutory definition of “health care provider” forecloses the DOL’s extremely liberal interpretation because Congress required that “the person is capable of providing healthcare services; not that their work is remotely related to someone else’s provision of healthcare services.” By significantly narrowing the scope of the statutory “health care provider” exclusion, the court greatly extended the reach of the paid leave benefits to many in the healthcare industry.

3. Intermittent Leave

The Final Rules permit the employee to take paid sick leave intermittently “only if the Employer and Employee agree,” and only for specific qualifying conditions. The court agreed with the DOL and found that the Final Rules do not require the employee to forfeit any days as a result of taking intermittent leave. Nevertheless, the court vacated the Final Rules to the extent that they prohibit intermittent leave without the employer’s consent for all qualifying reasons – not just those that “correlate with a higher risk of viral infection.” The court explained that, for example, there is no justification for requiring the consent of the employer when the employee takes intermittent leave “solely to care for the employee’s son or daughter whose school or place of care is closed” and there are no confirmed or suspected cases of COVID-19 in the employee’s home.

4. Documentation Requirements

The Final Rules require that employees submit to their employers prior to taking FFCRA leave specific documentation indicating their reason for leave, the duration of the requested leave, and other relevant information. The court invalidated this requirement because it greatly amplified, to the employee’s disadvantage, the unambiguously simple and less-demanding notice requirements under the EPSLA and EFMLEA. Specifically, the EFMLEA only requires that an employee provide the employer with notice of leave “as is practicable.” Similarly, the EPSLA allows an employee to take one day of paid sick leave before the employer can require the employee to provide notice in order to continue receiving such paid sick leave. By upholding the more generic, and less stringent, notice requirements already contained in the existing legislation, the court was able, once again, to pave the way for more easily accessible paid leave benefits.

Takeaways

As of now, the full impact of the August 3 decision in State of New York v. United States Department of Labor is unclear, and there is a high probability it will be appealed. While the FFCRA is set to expire on December 31, 2020, employers should consult with their labor and employment counsel to ensure they remain updated on all current and future court decisions affecting the Final Rules. If the August 3 decision by Judge Oetken stands, employers may be on the hook for paid leave that would have been denied under the DOL’s work-availability requirement, exemption of health care workers, restrictions on intermittent leave or more stringent notice requirements. Furthermore, employers should consult with their counsel to determine whether to amend any existing policies requiring prior notice and to expand their practice of granting paid leave under the FFCRA going forward.

If you have questions regarding these recently enacted federal and state laws or are presented with employment-related issues during these challenging times, please contact our Employment Litigation team or your regular Kleinberg Kaplan contact.