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Punching In: NY, Trump Head to Court Over Covid-19 Paid Leave

April 27, 2020, 9:49 AM

Monday morning musings for workplace watchers

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Ben Penn: Remember that New York attorney general’s office lawsuit accusing Labor Secretary Gene Scalia of unlawfully narrowing workers’ access to paid sick and family leave? Well, the Trump administration faces a Tuesday deadline to file its response defending the Labor Department rule, which went into effect April 1.

New York Attorney General Tish James hopes for a speedy outcome to open up paid leave to more health-care workers and others affected by Covid-19 who can’t work. James filed a summary judgment motion at the same time as the complaint against the rule.

Oral arguments (via telephone) are scheduled for May 12. Federal attorneys signaled last week that they’ll argue New York lacks standing to sue.

Companies and workers will have already adjusted to the DOL’s interpretation of the new paid leave requirements for six weeks by the time the hearing happens. If the court were to open eligibility to more workers retroactively, it would further complicate what’s been a rough early going for some businesses trying to figure out who qualifies for paid leave and when.

And what of workers who already have been denied paid leave, but could become newly eligible if the court sides with New York? That’s a welcome problem for those struggling to pay bills after being forced to go on unpaid leave while caring for children or parents.

DOL called the lawsuit an “unnecessary distraction” amid ongoing enforcement of the rule for what the agency said is hundreds of cases for employees seeking coverage. Not mentioned was the surge of standard FLSA complaints that employers are stiffing workers on their paychecks.

It’s worth pointing out their opposing counsel on the paid leave challenge has quite a bit on its plate, too. The New York AG’s office is also the leading plaintiff in the multi-state lawsuit over DOL’s joint-employer rule. The Trump administration is expected to file a motion to dismiss that suit by May 11.

Why is James’s office so focused on DOL regulations? One reason could be that Matthew Colangelo is one of the lead attorneys in both cases. Colangelo, who heads up federal initiatives for the attorney general, happens to have previously worked as chief of staff to former Labor Secretary Tom Perez during the Obama administration.

Chris Opfer: Labor lawyers on both sides of the aisle have long groused that the National Labor Relations Board’s enforcement of workplace rights sometimes seems to vary based on which regional office is involved. That certainly seems to be the case when it comes to union elections during the coronavirus pandemic.

After a two-week pause, the agency is leaving it up to NLRB regional directors to decide whether to permit union elections to proceed in person or by mail, if at all. That approach isn’t exactly pleasing unions that generally want the contests to continue, or business lawyers, who have called for ballot counting to be largely halted until the pandemic subsides.

Here are two examples of how that’s shaking out:

  • Region 4 (Philadelphia): A regional director postponed a union election at a Delaware newspaper and rejected the union’s request for a mail ballot election, citing the parties’ agreement to conduct the election in person.
  • Region 27 (Denver): A regional director approved a union’s request for a mail ballot election for workers at a Colorado food processing machine plant, rejecting the company’s argument that ballots should be cast on site.

The board says regional directors are in a better position to make calls based on the circumstances on the ground. Still, the decisions in these and other cases are likely to spur a wave of appeals from whoever winds up on the losing side.

Jaclyn Diaz: Are plaintiff’s lawyers gearing up for a “litigation tsunami” to try to catch companies with their pants down during the pandemic? Some business lobbyists and attorneys seem to think so.

“Based on the current movements of the plaintiffs’ bar, as well as the actions they have taken during past crises, litigation in several other areas is expected to develop,” the Chamber of Commerce’s Institute for Legal Reform said in an April 23 report. That includes misleading advertisements and other shady attempts to recruit massive groups of clients in short time spans, according to Harold Kim, who runs the institute.

Plaintiff’s attorneys say they’re keeping companies honest, not taking advantage of a crisis, during a time when bad actors are looking to strike.

The chamber is pointing to a flood of lawsuits that came after the 2010 Deepwater Horizon oil spill. As in that crisis situation—which resulted in litigation worth billions of dollars—coronavirus-related litigation could come in a wide variety, from labor and employment cases to securities and consumer suits.

The Atlantic recently detailedhow Texas lawyer Mikal Watts was criminally charged for allegedly inflating the claims of thousands of seafood workers for whom he obtained a $2 billion settlement related to the oil spill. Although Watts was found not guilty, Kim recently told me that’s an example of the “abusive tactics” he fears.

Some state legislatures already are looking to nip certain liability claims in the bud. New York, New Jersey, Illinois, Michigan, and Mississippi are among those that have moved to protect health-care providers from liability for injuries and deaths while treating the virus, except for those caused by gross negligence.

At least some form of “safe harbor” from certain liability for businesses is also very much in play for the next federal relief bill, lobbyists recently told us.

That “can be done through executive order or regulatory changes,” White House adviser Larry Kudlow told reporters April 24. “Some of it might require legislation. We’re looking at it right now. We’re looking at all the options.”

The liability issue already is dividing lawmakers on the House Education and Labor Committee.

Ranking Republican Virginia Foxx (N.C.) recently said Congress should focus on creating a “favorable environment for businesses to safely open” rather than “rewarding” trial lawyers.

Education and Labor Committee Chairman Bobby Scott (D-Va.) “would be skeptical” of “eroding our nation’s civil rights, workplace safety, and employment laws,” an aide said.

CO: Some California business lawyers want the Golden State to loosen up employers’ wage and hour obligations during the pandemic.

Gov. Gavin Newsom (D) should suspend California’s overtime law and workers’ ability to enforce their rights under the state’s Private Attorneys General Act, Littler Mendelson attorneys Michael Lotito and Bruce Sarchet said in a letter to Newsom. State law requires companies to pay many workers time-and-a-half wages for any hours worked beyond 40 per week. The PAGA law allows them to sue on behalf of themselves and coworkers for pay violations.

“Suspending these requirements will help provide needed operational flexibility so that small businesses which have been devastated by the COVID-19 pandemic can call employees back to work,” Lotito and Sarchet said.

Newsom already has waived mass-layoff notice requirements during the pandemic. Scheduling leeway probably would be helpful for social distancing purposes and there’s some precedent for pausing certain pay requirements in emergency situations. Still, taking a chunk out of the paychecks for many workers who put themselves at risk to punch in is probably going to be a bridge too far.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us. See you back here next Monday.

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To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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