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Appeal Deadline Looms Over DOL Virus Paid-Leave Regulations (1)

Oct. 2, 2020, 2:31 PM; Updated: Oct. 2, 2020, 10:37 PM

The U.S. Justice Department faced a Friday deadline to appeal a federal court decision striking down core aspects of the Labor Department’s original paid-leave rule for workers affected by Covid-19, but the administration appears to have issued its final response weeks ago.

The administration may be content missing the due date because DOL issued a revised rule last month that addressed elements of the Aug. 3 ruling from the U.S. District Court for the Southern District of New York, lawyers monitoring the case said.

No DOJ appeal had been filed by the close of business and media representatives for the DOJ and DOL declined to comment when asked whether the government would appeal to the U.S. Court of Appeals for the Second Circuit.

In his August decision, Judge J. Paul Oetken found the department’s April 1 rule illegally interpreted the Families First Coronavirus Response Act to exclude too many health-care sector employees. That prompted DOL to amend the regulation Sept. 11 by narrowing the definition of health-care workers who are excluded from the law.

But, crucially, two other aspects of the original rule Oetken vacated remain in legal limbo because DOL chose to reaffirm them in its rule update, rather than conform to the judge’s decision.

Those provisions, which make it harder for people to qualify for benefits, say that employers may deny paid leave to a worker if they don’t have work available, and that workers must get an employer’s consent to take intermittent leave.

If DOL stands its ground on those points without also appealing, it could expose the department to arguments that it didn’t sufficiently reply to the judge’s order vacating the original rule’s language on work availability and employer consent.

“On these two issues, the DOL bolstered its rationale but reasonable people can disagree as to whether the DOL met the court’s objections in striking down these requirements,” said Jonathan Segal, a partner in the labor and employment group at the management-side firm Duane Morris. “It is always hard to predict what any government agency will do, but my best guess is that the DOL will not appeal on the basis that it satisfied the concerns of the New York court.”

Diminishing Returns

The DOL’s temporary emergency rule implementing the Families First law has remained in effect since April, providing workers with up to 12 weeks of paid sick or family leave in situations related to Covid-19, including caring for children whose schools have switched to remote instruction. The regulation excluded those employed at companies with more than 500 workers.

Worker advocates have argued that the original regulation’s language on work availability and consent for intermittent leave creates hurdles for workers to receive benefits that go beyond lawmakers’ intent in writing the law. Those provisions, along with the original language excluding all health-care workers, were challenged by the New York Attorney General’s Office, leading to Oetken’s ruling.

The judge said that while it is appropriate for DOL to have barred intermittent leave in situations where an employee could spread infection to a work site, the department offered no rationale for why employer consent would be necessary for employees to take intermittent family leave to care for a child whose school or day care is closed.

Oetken also said DOL also exceeded its authority on the work-availability requirement by providing what he called a “barebones explanation.”

In response, the Labor Department’s updated regulation advanced a fuller explanation of its stance on both issues. It said employer consent on intermittent leave adheres to the Family and Medical Leave Act principle that a worker’s reason for leave must be balanced against the employer’s need to avoid disruption to the business.

DOL also elaborated on the work-availability provision by arguing that leave would only be appropriate in situations where, if not for the qualifying reason, the employee would’ve been able to work.

While the administration could seek to use an appeal to support its legal position, that strategy may have diminishing returns at this stage. The original rule and the revised version both expire at year’s end, along with the virus-relief law itself—likely before the outcome of any appellate court action.

A spokeswoman for New York Attorney General Letitia James declined to comment this week when asked whether James was satisfied that DOL’s updated rule adequately responded to Oetken’s ruling.

Sherry Leiwant, co-president of A Better Balance, a group that runs a call center to help workers get pandemic paid-leave benefits, said DOL did a great job revising the health-care exemption, which she called the “most egregious violation” in the original rule.

Regarding the work availability and intermittent leave provisions, “there’s probably room to argue,” Leiwant said. “My guess is that they’re not going to appeal,” she added. “It seems they feel they’ve satisfied the court and they aren’t going to go any further.”

(Updated to reflect that an appeal wasn't filed as of close of business on Oct. 2.)

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

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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