Court Rules That DOL Exceeds Authority in Its Coronavirus Paid Leave Regulations

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Snell & WilmerOn Monday, August 3, 2020, a federal judge in New York ruled that the U.S. Department of Labor (DOL) exceeded its authority by limiting employees’ eligibility for paid coronavirus leave under the Families First Coronavirus Response Act (FFCRA). While portions of the DOL’s regulations are out, it is unclear what—if anything—is “in.”

New York’s Challenge

In New York v. U.S. Department of Labor, CV No.1:20-cv-03020 (S.D.N.Y.), New York State challenged four provisions of the DOL’s Final Rule related to FFCRA including: (1) a provision denying workers’ benefits when their employers “do … not have work” for them (the “work-availability” requirement); (2) the DOL’s interpretation of the law’s exclusion for health care providers; (3) the Final Rule’s limits on taking intermittent leave, which required employer consent; and (4) the Final Rule’s documentation requirements. Broadly speaking, New York argued that these provisions unduly restricted the paid leave, such that the DOL exceeded its authority as the agency tasked with writing the FFCRA regulations. The DOL responded that its regulations were consistent with the statute and offered a reasonable integration of the FFCRA’s ambiguous language. See generally, Opinion and Order, ECF. No. 27.

The U.S. District Court in the Southern District of New York disagreed and found that the DOL exceeded its authority, in part, on all four issues.

1. The Work-Availability Requirement

Noting the statute’s general purpose, the Court found the DOL’s work-availability requirement was “entirely unreasoned,” and that, “more fundamentally, the agency’s barebones explanation for the [requirement] is patently deficient.” Id. at 17 (citing the DOL’s Final Rule, which reasons that the work-availability requirement is justified “because the employee would be unable to work even if he or she” did not have a qualifying condition). In other words, the DOL’s “circular regurgitation” of the requirement failed to meet the standard of a reasoned decision and the Court struck the DOL’s work-availability requirement as written. Id.

2. The DOL’s Definition of Health Care Providers

The Court also ruled that the DOL’s regulations cut off too many workers with its overbroad definition of “health care providers,” whom the law allows employers to explicitly exclude from receiving the paid leave. The Court pointedly criticized the DOL on this point, finding the DOL’s broad definition swept in “an English professor, librarian, or cafeteria manager at a university with a medical school” as “health care providers.” Id. at 18. This too, the Court found, exceeded the DOL’s authority and the Court struck the entire definition and offered no replacement. Id. at 19.

3. Intermittent Leave

Addressing the DOL’s Final Rule on intermittent leave, requiring employer consent, the Court noted that only some of the DOL’s proffered rationales made sense: i.e., this requirement prevented employees who may be infected or contagious from returning intermittently to a worksite where they could transmit the virus. “Fair enough,” the Court wrote, “[b]ut that justification . . . utterly fails to explain why employer consent is required for the remaining qualifying conditions, which concededly do not implicate the same public-health considerations.” Id. at 22. Thus, this regulation also exceeded the DOL’s authority and the Court struck the same.

4. Documentation Requirements

Lastly, the Court found that the DOL’s documentation requirements, imposed on employees, were inconsistent with the statute. The Court found that the DOL actually imposed a “more stringent precondition” for leave than the FFCRA itself by requiring that the employee provide the employer notice prior to taking leave. To the extent the document requirement served as a precondition to leave, the Court found the DOL exceeded its authority and struck this requirement.

The Court concluded with a warning to the DOL and likely to all government agencies, when promulgating rules and regulations in these unique times of pandemic-driven urgency:

"This extraordinary crisis has required public and private entities alike to act decisively and swiftly in the face of massive uncertainty and often with grave consequence. But as much as this moment calls for flexibility and ingenuity, it also calls for renewed attention to the guardrails of our government. Here, DOL jumped the rail." Id. at 25.

After New York’s Challenge: FFCRA as It Stands

The New York ruling leaves the FFCRA—and employers—with uncertainty. First, it is unclear whether the Court’s ruling applies outside of New York, because the ruling itself is silent about its intended impact. Second, the DOL may appeal the ruling to the Second Circuit Court of Appeals. Until then, it is unclear if the DOL will promulgate new regulations to fill the holes left by the Court’s ruling; notably, the Court’s decision deprives the FFCRA of a working definition of “health care provider.”

For now, employers should proceed with caution when approaching paid leave issues under the FFCRA. In particular, extreme care should be taken before denying an employee leave on any of the four bases addressed in the New York ruling. Employers should consider seeking legal advice on the issue to help ensure compliance with the FFCRA and any updated changes thereto.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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