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Federal District Court Vacates Important Provisions of DOL’s Final Rule Interpreting the FFCRA Federal District Court Vacates Important Provisions of DOL’s Final Rule Interpreting the FFCRA

Federal District Court Vacates Important Provisions of DOL’s Final Rule Interpreting the FFCRA

On August 3, a federal district court in the Southern District of New York vacated a number of provisions of the U.S. Department of Labor’s Final Rule concerning the Families First Coronavirus Response Act (“FFCRA”). This decision has left employers—particularly those outside of New York—with renewed uncertainty about their administration of leaves under the FFCRA. All employers need to be aware of this decision and consider how and whether it impacts FFCRA leaves requested by its employees.

The New York Attorney General filed the lawsuit that lead to this decision in April. The New York Attorney General challenged certain parts of the Final Rule and argued that the DOL’s interpretation unduly restricted workers’ access to the emergency paid sick leave and the expanded emergency family leave provided for under the FFCRA.

The state of New York and the DOL both filed motions for summary judgment. In granting the state of New York’s motion in nearly all respects, the court first addressed the DOL’s interpretation of the FFCRA that employers could deny paid leave under the Act if there was no work available for an employee. In reading the Final Rule, the court only found language reflecting the DOL’s interpretation in the discussion of some of the qualifying reasons for leave under the FFCRA, but not all of them. Because the DOL could not explain the differing language, the court found that the Final Rule was invalid. In addition, the court concluded that the DOL’s reasoning for its interpretation that the statutory language required an individual be unable to work solely due to a qualifying reason for leave (and not, in part, because the employer has no work available) was a “terse, circular regurgitation” that failed to satisfy the “minimal requirement of reasoned decision-making” imposed on government agencies. Accordingly, the court vacated the provision allowing leave only when there is work available. As a result of this decision, employers (at least those in New York) could be required to provide leave to their employees who experience qualifying reasons for leave as long as the individuals are still employed (even if there is no work).

The court next agreed with the state that the DOL, in adopting an expansive definition of “health care provider,” had exceeded its rule-making authority. The FFCRA states that an employer of an employee who is a “health care provider” may elect to exclude the employee from the benefits of the Act’s expanded emergency paid family leave. When it issued its regulations, the DOL defined a “health care provider” as “anyone employed at a doctor’s office, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity.” The court concluded that the DOL’s definition was “vastly overbroad” because it allowed employers to deny leave to employees whose roles “bear no nexus whatsoever to the provision of health care services,” such as environmental services and administrative personnel. According to the court, only those “capable of providing health care services” (who are thereby essential to the public health response) were intended by Congress to be excluded from the Act’s leave benefits. As such, the court vacated the definition of “health care provider” set forth in the Final Rule. This may result in many more employees who are employed by an entity in health care being entitled to leave under the FFCRA.

The court then turned to the state’s argument that the provision in the Final Rule that no intermittent leave is available under the FFCRA without employer consent was unreasonable. The court concluded that the DOL’s prohibition of intermittent leave in certain circumstances (i.e., where an employee is subject to a government quarantine or isolation order or a doctor’s order to self-quarantine due to COVID-19 (or is caring for another who is so subject), is experiencing COVID-19 symptoms and pursuing a medical diagnosis, or is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services) was reasonable because doing so helped stem the spread of COVID-19 in workplaces. However, the court agreed with the state that the provision in the Final Rule that intermittent leave cannot be taken for other qualifying reasons without employer consent was unreasonable. The court specifically referred to leave requests associated with the closure or unavailability of schools or other places of care due to the virus. The DOL admitted that, unlike other qualifying reasons for leave, providing intermittent leave for school closures does not increase or affect the risk of virus transmission. Because the agency did not provide an alternative rationale, the court determined that giving employers the discretion as to whether to grant intermittent leave was “entirely unreasoned” and, as a result, vacated the provision requiring that employers agree to intermittent leave for reasons that do not increase the risk of a viral infection. 

Finally, the court vacated the provision in the Final Rule requiring employees, prior to taking leave, to submit documentation supporting their need for leave. Noting that the text of the FFCRA is clearly less restrictive with respect to the timing of gathering documentation from employees seeking leave, the court vacated the temporal provision of the Final Rule as inconsistent with the Act’s notice provisions.

To recap, the district court’s opinion results in the following for employers located within the New York:
  • Employers may only exclude employees whose roles involve providing health care services from receiving FFCRA leave.
  • Having no work available for an employee to perform is not a valid reason to refuse FFCRA leave. 
  • Employers may not refuse intermittent leave to qualified employees except in the specific circumstances set forth in the Act: where an employee is subject to a government quarantine or isolation order or a doctor’s order to self-quarantine due to COVID-19 (or is caring for another who is so subject), is experiencing COVID-19 symptoms and pursuing a medical diagnosis, or is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services. 
  • Employers may not require employees to provide documentation supporting the need for FFCRA leave prior to taking leave.
It is likely that the DOL will appeal the district court’s order to the Court of Appeals for the Second Circuit and ask that the vacated provisions be reinstated. Moreover, the Trump administration could direct the agency to produce a revised rule. In the meantime, legal challenges to denial of leave requests are likely to be brought in other jurisdictions asserting the same arguments lodged by New York’s Attorney General. Employers with operations in New York should consult with legal counsel immediately regarding the impact of the case on the implementation of their FFCRA leave policies. As for employers outside of New York, they are left with even more uncertainty. Such employers should keep this case in mind as they continue to administer leave under the FFCRA and consult legal counsel for guidance on how and whether to react to this decision.

We will continue to monitor this case, along with future guidance from the DOL and other legislation that may affect employers during this challenging time. If you have questions, please contact Manolis BoulukosTami Earnhart or Germaine Willett, or any other member of our Labor, Employment & Immigration Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
 
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