State of New York v. United States Department of Labor
On August 3rd, the U.S. District Court for the Southern District of New York issued an opinion invalidating some fundamental aspects of the Families First Coronavirus Response Act (FFCRA) regulations, written by the Department of Labor (DOL). FFCRA provides paid leave to employees who are affected by certain COVID-19-related issues.Although it is not unusual for a District Court to invalidate an agency’s regulations, this case is unconventional in that the Judge did not clarify whether the decision applies nationwide or only in New York.
This article summarizes the major changes that have been made by the Court’s decision, as well as what employers should know about applying the decision in Virginia.
For background information on FFCRA and the DOL regulations, our attorneys have written several summaries:
- Families First Coronavirus Response Act (Coronavirus and the Law: Legislative Alert #1)
- Clarifying Employee Leave – DOL Issues March 27 Guidance on FFCRA (Coronavirus and the Law)
- Additional Guidance on COVID-19 Emergency Leave – DOL Issues Temporary Rule (Coronavirus and the Law)
How Federal Regulations Work
When Congress passes a new law, they often also authorize an administrative agency, like the DOL, to write regulations that fill in the details of how the statute operates. However, these regulations can be declared invalid if a District Court finds the agency’s regulation to be “arbitrary and capricious,” meaning it does not directly follow from Congress’s new law.
The DOL’s authority has been checked in exactly this way. The State of New York sued the DOL under the Administrative Procedure Act (APA), asserting that parts of the DOL’s regulation do not directly follow from the FFCRA. As a result, several aspects of the regulations have been declared invalid.
Work Availability Requirement (Struck)
Congress’s statute says employees who are unable to work or telework do qualify for the two types of leave available under FFCRA, known as Emergency Paid Sick Leave Act (EPSLA) leave and Emergency Family and Medical Leave Act (EFMLA) leave.
The DOL regulations, however, added the rule that employees only qualify for paid leave if their employers would otherwise have work for them, if the employee could come to work.
The DOL’s work-availability requirement applies only to some of the qualifying reasons under EPSLA:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to quarantine;
- Under either the EPSLA or EFMLA, the employee is caring for a child if the school or place of child care has been closed, or the child care provider is unavailable, due to COVID-19 precautions.
The court decided this work-availability limitation is hugely consequential and does not directly follow from what Congress wrote in the FFCRA. Finding there was no good reason this requirement should only apply to some of the reasons an employee may qualify for paid leave, the Court declared the work-availability requirement to be invalid.
DOL argued the court should nonetheless apply this requirement to the remaining three conditions. The court declined to do so. The DOL, however, retains jurisdiction to make changes, so they may choose to amend this omission later on.
Definition of Health Care Provider (Struck)
Congress’s statute defines a health care provider as anyone capable of providing health care services. The DOL regulations define “health care professional” so expansively that it includes anyone whose work is remotely related to someone else’s provision of healthcare services—for example, an English professor at a university with a medical school. The Court held this definition is much too broad. According to the Court, the exception should only cover those employees who are essential to maintaining a functioning health care system during the pandemic.
Intermittent Leave (Struck as to Employer Consent Only)
The regulations say leave can be taken intermittently only when the employer consents and when the employee is taking leave to care for a child. The Court found the first part of this rule—requiring employer consent—is invalid. But the second part, banning intermittent leave unless the employee is caring for a child, is permissible.
Documentation Requirements (Struck as to Requiring Documentation Before Taking Leave)
The regulations require employees to submit to their employers, before taking leave, documentation stating the reasons for leave, the duration of the requested leave, and when relevant, the authority for the isolation or quarantine order.
The FFCRA, however, states an employee must give the employer as much notice of leave as possible when EFMLA is needed. For EPSL, an “employer may require the employee to follow reasonable notice procedures.”
The court held “to the extent the [regulation’s] documentation requirement imposes a different and more stringent precondition to leave, it is inconsistent with the statute’s unambiguous notice provisions” and is therefore invalid.
Nationwide or Local?
Judge Oetken elected not to issue a nationwide injunction preventing vacated parts of the new regulations from being used nationwide. As written, the decision is only binding in New York. This means, for now, employers in Virginia are likely better off applying the rules stated by the regulations until there is some clarification from the courts or DOL.
There are a few possible outcomes. The DOL may respond by changing the regulations to conform to Judge Oetken’s ruling, or it may DOL re-promulgate the same rules but with more thorough reasoning to convince courts of its point of view. Finally, the case could be appealed to the Second Circuit Court of Appeals.
It may also be safer for Virginia employers to rely on the DOL regulation rather than the New York case because of a safe harbor provision for relying on administrative decisions under the Portal-To-Portal Act. This Act is a part of the FLSA enforcement scheme, which the EPSLA has adopted.
As always, Woods Rogers’ Labor and Employment attorneys will continue to monitor this developing issue.