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Judge Expands Virus Paid Leave Rule in Blow to Trump Agency (2)

Aug. 3, 2020, 2:47 PM; Updated: Aug. 3, 2020, 8:32 PM

Trump administration restrictions on which workers can access a temporary federal paid leave program are illegal and must be removed from a Labor Department rule so more employees can access emergency benefits, a Manhattan federal judge ruled.

The DOL’s regulation Implementing a virus relief law defied the intent of Congress by excluding virtually the entire health-care sector and other employees from up to 12 weeks of paid sick and family leave, Judge J. Paul Oetken of the U.S. District Court for the Southern District of New York said Monday.

Consequently, the judge vacated the sections of the DOL final rule that broadly define health-care exemptions, that allowed employers to deny leave if they didn’t have work available, and that mandated workers receive employer consent for taking intermittent leave. Oetken handed a crucial victory to the New York attorney general’s office, which filed the lawsuit in April.

Remaining pieces of the rule, including the carve-out for businesses with 500 or more workers, still stand.

Although the Trump administration now has a chance to appeal the ruling, the decision could reshape family decisions and small-to-midsize business operations at a moment when Covid-19 cases continue to spike and parents are struggling with how to balance work with child-care responsibilities.

For those who previously were denied leave or opted not to apply, Monday’s opinion will renew opportunities to seek paid time off if they’re ill with the virus or if they need to care for children. Employers, particularly at health-care facilities, will need to re-evaluate decisions to curb workers’ access to paid leave.

“It’s likely this will be appealed, and when it’s appealed it’s possible the Second Circuit might reinstate the regulation and keep it in place pending the review, but until that occurs, an employer acts at its peril if it relies on an exemption which has been struck down,” said Jonathan Segal, a partner in the labor and employment group at the management-side firm Duane Morris.

The law and the DOL regulation require 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.

Plaintiffs’ attorneys and worker advocates have struggled in the early enforcement period to find workers are covered by the law due to its exemptions. This led to the New York legal challenge seeking to open up the benefits to more employees across the U.S.

“This is a significant victory for working people,” said Tanya Goldman, a senior policy analyst focusing on paid leave at the Center for Law and Social Policy.

“DOL impermissibly narrowed which workers could access their right to paid leave and imposed additional barriers in accessing that leave,” she said. “Getting this right is more important than ever as jurisdictions around the country consider how to re-open schools and child care centers, which they can only do safely by maintaining low levels of community transmission.”

Attorneys for the Trump administration argued that the case should be dismissed because the state of New York lacks standing to sue, but the judge disagreed.

“This extraordinary crisis has required public and private entities alike to act decisively and swiftly in the face of massive uncertainty, and often with grave consequence,” Oetken wrote in the opinion. “But as much as this moment calls for flexibility and ingenuity, it also calls for renewed attention to the guardrails of our government. Here, DOL jumped the rail.”

The DOL declined to comment, deferring to the Justice Department. The DOJ also declined to comment..

Workers Urged to Apply

Even if the Trump administration were to immediately appeal the decision, it isn’t clear how employer responsibilities regarding the health-care exemption are changed. Workers at health-care facilities, such as janitors and cafeteria employees, now appear to have access to paid leave entitlements that were withheld from them in the DOL’s original interpretation of the Families First Coronavirus Response Act.

But the judge didn’t offer a replacement definition for the health-care exemption.

“I guess at this point there is no rule interpreting that language from the statute,” said Allyson Belovin, a partner at Levy Ratner in New York, who represented Service Employees International Union in an amicus brief supporting the New York AG in the case. “I would absolutely encourage any worker to seek these benefits, and then it’s on the employer to make a decision about whether the employer thinks they are a health-care provider and if they are whether or not they’re going to deny them the leave.”

But for companies that couldn’t afford to extend leave benefits in the severe downturn caused by the pandemic, Oetken’s decision is a setback, said Karen Harned, who heads the legal center at the National Federation of Independent Business.

“I definitely think it’s not helpful because DOL was trying to give employers needed flexibility with these requirements,” Harned said. “This is how you disincentive people from bringing people back to work, because it’s just so hard right now as it is.”

Daniela Nogueira, Fiona Jeannette Kaye, and Matthew Colangelo of the New York State Office of the Attorney General represent the state. Jennifer Jude and Stephen Seungkun Cha-Kim of the U.S. Attorney’s Office in New York represent the DOL.

The case is New York v. DOL, S.D.N.Y., No. 20-03020, ruling 8/3/20.

(Updated to reflect DOJ declining to comment)

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

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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