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New York, Trump Lawyers Square Off in Virus Paid Leave Lawsuit

May 12, 2020, 10:12 PM

A federal judge soon will decide whether to expand a new federal paid leave rule to cover health-care workers and others affected by the coronavirus, after listening to arguments in the New York Attorney General’s Office lawsuit over the Trump administration’s recent regulation.

Although Judge J. Paul Oetken posed tough questions of both sides at a telephone hearing Tuesday, the Manhattan judge appeared skeptical of the legal merits of Labor Department restrictions that deny paid leave to low-wage health-care aides and to workers whose bosses determine there’s no work available.

An attorney for New York urged the court to invalidate four provisions in the Labor Department’s paid sick and family leave rule, arguing that by limiting the rule’s scope the agency defied the intent of Congress in passing the Families First Coronavirus Response Act. The U.S. attorneys representing DOL countered that New York lacks standing to pursue the case, asking Oetken of the Southern District of New York to dismiss the lawsuit.

The oral arguments followed the state’s lawsuit filed in April, shortly after the rule went into effect April 1. New York wants the court to overturn aspects of the rule that exempt virtually all health-care employees; allow employers to deny paid leave when they don’t have work available; ban workers from taking their paid family leave or sick leave intermittently, unless approved by their employers; and mandate that employees provide extensive documentation to employers when seeking leave.

Oetken said he would issue an opinion “as soon as I can.”

The regulation requires employers with fewer than 500 workers to provide two weeks of paid sick leave to employees unable to work due to the virus. Those companies also must offer up to 10 weeks of partially paid leave under expanded Family and Medical Leave Act coverage to care for a child whose school or day care is closed because of the pandemic. The leave expires Dec. 31.

Judge Skeptical of Exclusions

The judge expressed doubt about the regulatory requirement that employers have work available on a given day in order for employees to be eligible for paid leave.

“This is what’s a little troubling: The people who want to invoke the sick leave provision—maybe they’re sick, maybe they’re in quarantine, maybe they’re taking care of a child, but whatever it is, they’re the ones who will call the boss and say I’ve got to stay home for two weeks,” Oetken said. All the boss “has to do is invoke the words, ‘I don’t have work for that person.’ ... It’s kind of a ham-handed exception in the rule without any basis really in the statute.”

Jennifer Jude, from the U.S. Attorney’s Office in New York, replied, “There isn’t an incentive for private employers to try to avoid paying leave where it’s supported entirely by tax credits, so this is essentially public-funded leave.”

Oetken said he’s sure there are some employers who act in good faith, “but I’m also sure there are some who are the opposite and they don’t want to wait for tax filing the next year to get their money.”

‘Isn’t it Perverse’?

The parties also debated whether the DOL had authority to include an expansive interpretation of the law’s exemption for health-care providers. The agency determined that the carveout applies to anyone employed at a doctor’s office, hospital, retirement facility, medical school, and other types of medical centers. Employers who contract to perform janitorial or food services at these facilities also would be exempted.

Oetken’s questions suggested that he could be leaning in either direction on this exemption. At one point he told the New York attorney, “When you talk about health-care providers essential to the pandemic we’re living in, it makes sense that it’s a much broader category, doesn’t it?”

But later the judge appeared sympathetic to the arguments raised by Service Employees International Union, which filed an amicus brief Monday supporting the state.

“When you look at the SEIU’s amicus brief and you have a situation where you have nursing care assistants who don’t make really high wages—they’re not doctors, they’re not nurses—and they get sick or they have symptoms, and because their employer has chosen to exclude them they may come in to work,” Oetken said. “Isn’t it perverse that the statute sweeps them into the exclusion potentially?”

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Karl Hardy at khardy@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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