Federal Court in New York Strikes Down 4 Sections of FFCRA Regulations

Federal Court in New York Strikes Down 4 Sections of FFCRA Regulations

The Families First Coronavirus Response Act (“FFCRA”) was designed to provide employees with emergency paid sick leave and expanded family and medical leave related to COVID-19.  In order to quell confusion stemming from the FFCRA’s implementation, the United States Department of Labor (“DOL”) promulgated regulations and issued Q&A guidance documents explaining the application of the FFRCA.  A federal judge in New York has now restored a level of confusion by invalidating four key FFCRA regulation provisions.  Compounding the confusion further is the fact that it is not yet clear whether the New York judge’s ruling applies to employers outside of New York. 

The DOL issued its final FFCRA rule on April 1, 2020.  The State of New York brought suit in the Federal Court for the Southern District of New York claiming that the rule unlawfully denied leave to otherwise eligible employees and financially burdened the State of New York.  On August 3, 2020, that federal court tossed out four key provisions of the regulation.  Those provisions provided that:

  1. Employees are eligible for FFCRA leave only where the employer had work available to be performed;
  2. Employees must obtain consent from their employer for intermittent leave;
  3. Employees can be required by their employer to submit FFCRA leave documentation prior to taking leave; and
  4. The exemption for a “health care provider” applied to virtually all employees working for an organization providing health care.

Work Availability

Since the inception of the FFCRA, the DOL consistently expressed that employees were not eligible for leave if the employer had no work for them to perform, such as where employees were furloughed or had hours reduced.  The federal court invalidated this requirement for two reasons.  First, the court stated there was an unexplained inconsistency in the regulation that causes the job availability requirement to only apply to three of the six qualifying reasons for paid leave.  Second, the court found that the DOL’s justification for the requirement was not sufficient under the Administrative Procedure Act.

The invalidation of this requirement constitutes a significant alteration of the FFCRA scheme and essentially negates the DOL’s guidance document at Q&As 23-28.  It sets the stage for employees having entitlement to paid leave even when they would not otherwise be working.  All that seems to be required is that a reason for an employee not being able to work be related to the COVID-19 pandemic – more specifically, that the employee meet at least one of the FFCRA qualifying reasons regardless of whether the employee would otherwise be working.

Intermittent Leave

Under the DOL regulation, employees had the option to take intermittent leave under the FFCRA for certain qualifying reasons when both the employee and employer agreed.  The federal court ruled that the DOL failed to provide a sufficient explanation as to why employer consent was required and invalidated the provision.  While an employee would now be entitled to take FFCRA paid leave intermittently under the court’s ruling, an employer can still deny intermittent leave if granting it would reasonably place co-workers at risk of contracting COVID-19.

Documentation

The DOL’s regulation included a documentation requirement granting employers the right to require employees to submit specific information demonstrating the need for FFCRA leave before taking leave.  The court reasoned that the DOL’s regulation made the documentation requirement more rigorous than set forth in the FFCRA itself and it struck that specific part requiring prior written proof of the need for leave.  The court left intact that portion of the regulation permitting employers to require employees to use reasonable notice procedures after the first paid sick day, and in the case of expanded family leave, giving notice of FFCRA leave “as is practicable.”

Health Care Provider

Under the FFCRA, employers have the option to exclude “health care providers” from FFCRA leave benefits.  In its regulation, the DOL defined “health care provider” broadly so that hospitals, nursing homes, and other employers in the healthcare industry have applied the exemption to virtually all of their employees.  According to the federal court, the DOL’s definition was too broad.  It pointed to a situation where a librarian, cafeteria manager, or an English professor at a university with a medical school would fall under the DOL’s definition.

The court invalidated the DOL’s definition.  As a result, the Family and Medical Leave Act’s (FMLA) narrow definition of “health care provider” probably applies.  The FMLA’s definition is narrowly tailored to only include a “doctor of medicine or osteopathy” authorized to practice in the relevant state.  Under this definition, the exemption for “health care providers” would not apply nurses, technicians, or other important medical professionals or caregivers.

What Should You Do?

Unfortunately, the case from the Southern District of New York has caused tremendous confusion.  For instance, the court did not specify whether its ruling had retroactive effect.  We do not know whether back pay is owed to those how would have qualified for paid leave in the past several months.  Perhaps more importantly, we do not know whether this case is binding on employers outside of New York. 

Some lawyers believe the case is effective nationwide.  Our firm has concluded that, as of right now, the decision applies only in New York.  We reached this conclusion for two reasons.  First, the State of New York did not seek a nationwide remedy.  The case was tailored to an alleged “proprietary injury” to the State of New York (reduced tax revenue if employees were not on paid leave).  Second, the judge did not specifically state that his order was meant to apply nationwide.  Thus, the circumstances and text of the court’s opinion suggest that the immediate effect of the decision is limited to the state of New York.

Fortunately, it seems likely that the DOL will appeal the ruling to the Second Circuit Court of Appeals.  The geographic impact of the decision should be clarified by the appeal.  Of course, the Second Circuit may, or may not, reinstate the regulations on appeal.  The DOL may also engage in revisions to its regulations in the wake of this ruling which would have immediate effect nationwide.  Finally, we may see other courts ruling differently on these or similar issues.    The Masud Labor Law Group will continue to monitor the situation and alert our clients as this potentially game-changing development unfolds.

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