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Federal Court in New York Takes Issue with Some Sections of the Rule Implementing the FFCRA: What Does It Mean for You? 

by Eric E. Kinder

Published: August, 2020

Submission: August, 2020

 



In response to a lawsuit filed by the State of New York, a judge in the Southern District of New York considered and invalidated parts of the Department of Labor's (“DOL”) Final Rule implementing the Families First Coronavirus Relief Act (“FFCRA”). The ruling, while currently only applying to employers in the Southern District of New York (i.e., New York City), could be instructive on how other courts consider the same provisions.

The FFCRA provides that employers with fewer than 500 employees must provide mandatory paid leave (and paid extended FMLA leave) under certain COVID-related reasons. For more details on the FFCRA, please see our Q&A on the Act from when it was enacted. As it was authorized to do under the law, the DOL issued a rule implementing the FFCRA on April 1, 2020 -- the same date on which the FFCRA became effective. The State of New York challenged a number of provisions of that rule under a theory that the DOL exceeded the agency’s authority in doing so. The Court agreed with the State of New York and found that several features of the final rule were not entitled to judicial deference and were invalid.

Work Availability Requirement
The DOL Final Rule says the benefits of the FFCRA are not available to employees for whom the employer does not have work. The DOL did this based on FFCRA language that paid leave is only available where the employee’s absence is “due to” one of the listed reasons and so, according to the DOL, the employee must be unable to work only because of the COVID-related reason. According to the DOL, in such circumstances the employee would be unable to work even if there was no COVID-related reason at play.

The Court found this logic unpersuasive and struck down the work availability requirement for two reasons. First, the DOL only fully spelled out the work availability requirement in three of the reasons, and this differing treatment was “entirely unreasoned” (though the agency’s discussion that accompanied the actual rule stated it was their intent to apply to this requirement across the board). Second, the Court was unpersuaded that saying the leave must be due to a qualifying reason means it must be the “but for” cause the employee is unable to work. The Court explained that teachers on leave remain on leave on snow days, even though there is no work on those days and thus this rule improperly narrows the scope of the FFCRA.

The Court, however, did not say expressly whether it was requiring employers to provide paid leave to employees who have been furloughed, as opposed to merely not having work on a given day.


Health Care Provider Definition
The FFCRA states that employers may exclude health care providers from leave benefits. The Final Rule defined “health care provider,” for this section and this section only, to mean any employee of, essentially, any health-related employer. The Court rejected this definition as overly expansive and far in excess of what the law itself allows. The DOL apparently took the position with the Court that an “English professor, librarian, or cafeteria manager at a university with a medical school” would be excluded as a health care provider, which was a “bridge too far” for the Court. Of all of the rules by the Court in this case, this one is the most likely to be adopted by other courts, and employers relying on the definition of health care provider in the final rule may want to revisit their policies. 


Intermittent Leave
The Final Rule limited the ability of employees to take FFCRA leave intermittently. The Court agreed that it makes sense not allow the use of intermittent leave where there is a public health concern (i.e., where an employee is quarantined or taking care of a COVID positive individual). However, the Court found no legitimate reasons to limit the use of intermittent leave where there was no health concern, such as where the leave is sought for child care reasons. The Final Rule only permitted the use of intermittent leave in those circumstances to where the employer consents or agrees to it use. The Court deemed this to not be a reasonable interpretation of the law, though the Court never addressed that intermittent leave is, by statute, only permitted in specific circumstances. The Court’s holding here, if adopted universally, would mean employers must allow intermittent leave for child care leave, along the same lines as with any other FMLA leave. Employers should be cautious and seek advice when faced with a request for intermittent leave for COVID-related child care issues. 


Documentation
The Court said that requiring documentation as a precondition for leave is not consistent with the FFCRA that only requires employees to provide notice of leave to the extent practicable. In response, employers should hold employees to the same notice and documentation standards that they would use for any FMLA request and not deny paid leave purely on a failure to provide the minimal documentation required prior to the beginning of leave, at least without seeking legal guidance.Again, there is nothing in this opinion that would indicate that it directly impacts employers outside of the Southern District of New York. It is very likely that the DOL will appeal the decision and seek a stay of the Court's ruling pending the appeal. In the interim, other courts may find this decision instructive if asked to consider similar questions, or may reject the Court’s reasoning and find the final rule to be valid. 


If you have any questions regarding how this Court’s decision impacts your business, please feel free to reach out to any member of the Spilman COVID-19 Task Force, and know that we will be following other rulings closely to provide proper guidance.
 

 



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