On Monday, August 3, 2020, U.S District Judge J. Paul Oetken of the Southern District of New York issued a Decision and Order striking down portions of the Department of Labor (“DOL”) regulations implementing the Families First Coronavirus Response Act (“FFCRA”). Particularly, the order vacated the following portions of the DOL regulations:
- The requirement that work is available to the employee as a condition of eligibility for FFCRA leave;
- the definition of “health care provider”;
- the requirement that an employee secure employer consent for intermittent leave; and
- the requirement that an employee provide documentation prior to taking FFCRA leave.
The Work-Availability Requirement
The Court first held that the DOL exceeded its rulemaking authority by excluding from eligibility those employees for whom an employer does not have work available. The FFCRA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any one of six qualifying reasons related to COVID-19. However, the DOL regulations provided that FFCRA leave was not available to an employee whose employer did not have work available at the time of the leave. For example, if the employer conducted a temporary furlough due to a government shelter-in-place order or a lack of business, the DOL took the position that FFCRA leave would not be available. In doing so, the DOL required that the FFCRA qualifying reason was the “but-for” cause of the employee’s inability to work – if the employee would not have had employment available, even in the absence of the qualifying reason, then “but-for” causation did not exist.
The Court found that the language of the FFCRA making leave available when the employee is “unable to work (or telework) . . . ‘because of’” a qualifying reason is ambiguous, since it could require “but for” causation, or it could permit leave when the qualifying reason is one of several reasons why the employee is unable to work. Even though the Court seemed to acknowledge that the interpretation chosen by the DOL was a plausible interpretation of the statutory language, it struck down the DOL’s interpretation, finding that the agency had failed to adequately explain the basis for its interpretation during the rulemaking process.
Health Care Provider Definition
The FFCRA granted the DOL the authority to issue regulations permitting employers to exclude “health care providers” and emergency responders from the definition of employee under the FFCRA. Although, for other purposes, the regulations incorporate the FMLA’s definition of health care provider (i.e., doctors and others who provide health care services), the DOL regulations defined health care provider for purposes of the exclusion from coverage to include anyone employed at any doctor’s office, hospital, nursing facility, retirement facility, medical school, medical testing laboratory, pharmacy, or any similar site where medical services are performed.
The Court held that the FFCRA’s statutory language requires that the healthcare provider exclusion is limited to employees who are capable of furnishing healthcare services, and that the definition in the DOL regulations was “vastly overbroad,” because it included “employees whose roles bear no nexus whatsoever to the provision of healthcare services.” The Court noted that “an English professor, librarian, or cafeteria manager at a university with a medical school” would all be health care providers under the DOL regulation, and that such a result was inconsistent with the FFCRA.
On the issue of intermittent leave, the Court first noted that the FFCRA did not address intermittent leave at all, and that the DOL’s regulatory powers permit the agency to fill the gap left by Congress through reasonable rulemaking, as necessary to carry out the purposes of the Act. The Court upheld the DOL regulations insofar as they prohibit intermittent leave for on-site workers due to COVID-19 related illness, isolation or quarantine, because the prohibition of intermittent leave in those cases serves an important public health objective – reducing the risk of viral infection.
The DOL regulations permit intermittent leave for other qualifying reasons (such as COVID-19 related childcare) and for employees who can work remotely, but only if the employer and the employee agree to an intermittent leave arrangement. The Court held that the DOL had failed to offer any rationale for the requirement of employer consent to such intermittent leave and, therefore, vacated the DOL regulation insofar as it requires employer consent before an employee may take intermittent leave.
Finally, the Court vacated the portion of the regulations imposing a requirement to provide documentation containing information about the need for leave prior to taking paid leave under the FFCRA. The Court found this requirement is inconsistent with the statute’s unambiguous notice provisions, neither of which require that documentation be provided by an employee in advance of taking paid leave under the FFCRA. Notably, however, the Court held that the documentation requirements are invalid only to the extent that they are a precondition to obtaining leave. The Court allowed the substance of the DOL’s documentation requirements to stand. In other words, employees still must provide the same documentation of the need for leave under the FFCRA, but they simply cannot be required to provide it in advance.
The Court’s decision modifies the DOL regulations by vacating those provisions discussed above. The decision could have significant ramifications for employees who experience a qualifying reason for FFCRA leave, but are on temporary furlough for other reasons; for workers in the healthcare field; and for those who want to take intermittent leave for reasons permitted under the regulations. However, the ruling does not include a nationwide injunction, so it leaves open the possibility that other courts might uphold the regulations. To say the least, the decision creates significant uncertainty as to the validity of the portions of the regulations that have been vacated. The DOL might also appeal the Court’s ruling, or the agency could engage in a new rulemaking to bolster its justification for those portions of the regulations that the Court found to be lacking support.
For now, employers who rely upon those portions of the DOL regulations that were vacated by the ruling will risk violating the FFCRA if courts within their jurisdiction eventually agree with Judge Oetken’s decision. As such, pending further developments, we recommend that employers modify their FFCRA compliance processes to comply with the Court’s decision.
Should you have any questions or concerns about the impact of this decision on employer obligations, please contact any member of the McNees Labor & Employment Practice Group.