New York District Court Invalidates Key Aspects of DOL’s Final Rule Implementing the Families First Coronavirus Response Act

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Earlier this week, a decision by the U.S. District Court for the Southern District of New York vacated several key aspects of the U.S. Department of Labor’s (“DOL”) final rule implementing the Families First Coronavirus Response Act (“FFCRA”). (For those who are unfamiliar with the FFCA, an overview can be found here.) The decision stems from a lawsuit filed against the DOL by the State of New York, which claimed that the DOL exceeded its agency authority based on the way in which it interpreted the FFCRA.
 
The decision, known as State of New York v. U.S. Department of Labor, et al. (“NY v. DOL”), specifically invalidates provisions relating to the following issues:
 

1. Employees who are on furlough. The FFCRA grants paid sick leave to employees who are "unable to work (or telework) due to a need for leave because of” any of six enumerated COVID-19-related reasons. The DOL's final rule excludes from coverage those employees whose employers "do … not have work" for them since, the DOL reasoned, they are not on leave because of COVID-19, but due to lack of work.  The Court found the DOL's explanation "unreasoned" and invalidated it. Thus, under the Court’s decision, employees who are on furlough and who also have qualifying reasons for leave may be entitled to FFCRA benefits.
2. Employees of “healthcare providers.” With respect to the FFCRA’s healthcare provider exemption, the DOL's final rule broadly defines "health care provider" based on the nature of the employer’s business, rather than the employee’s specific job function. Thus, the Court reasoned, DOL's definition would include, for example, an English professor employed by a university with a medical school. The Court disagreed with that reading, concluding instead that the FFCRA “requires at least a minimally role-specific determination.” While it is unclear exactly which roles the Court believes should be covered by the exemption, the Court did make clear that non-medical personnel are not exempted.
3. Intermittent Leave.   Although the DOL's final rule permits employees to take paid leave “intermittently”— in separate blocks of time rather than one continuous period)— they may do so only with their employer’s consent (and only in limited circumstances). The Court upheld intermittent leave restrictions for leave that implicates an employee's risk of COVID-19 transmission, e.g., when an employee or immediate family member contracts the virus. But for other qualifying reasons, such as needing to care for children whose school or childcare facility is closed, the Court struck down the DOL’s rule and found the employer-consent requirement invalid.
4. Documentation Prior to Leave Approval Under the DOL’s final rule, employers may require employees to provide their employers with documentation before taking foreseeable paid leave. The Court invalidated that requirement. Instead, an employee who provides requisite notice prior to taking leave will be entitled to leave pay upon the submission of appropriate documentation, even if that documentation is submitted at a later time.

The NY v. DOL decision will likely be appealed to the Second Circuit Court of Appeals, and it could be overturned. Moreover, it is unclear whether other federal district courts, if given the opportunity to weigh in, will agree with the decision. Nonetheless, unless and until further guidance is issued, employers who act contrary to this decision face significant risk. Employers are thus advised to follow the new interpretation of the FFCRA and notify employees of these changes.