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Railroads Duck Massachusetts Paid Sick Leave Law (1)

Aug. 13, 2018, 3:30 PMUpdated: Aug. 13, 2018, 5:38 PM

Massachusetts can’t apply its paid sick leave law to railroad employees who are protected by a federal unemployment insurance program, according to a federal district court.

The federal Railroad Unemployment Insurance Act is the exclusive remedy for rail workers who miss work because of illness or injury, Judge Nathaniel M. Gorton of the U.S. District Court for the District of Massachusetts ruled Aug. 10. Gorton’s decision means that railroad employees won’t be able to claim benefits under the Massachusetts Sick Leave Law, which entitles employees working in the state to accrue paid sick leave benefits.

Gorton’s decision, which upheld a challenge by CSX Transportation Inc. and several other railroads, isn’t the first ruling to block railroad employees from claiming sick leave benefits under state law. However, his decision is significant in holding that the RUIA prevents railroad employees from claiming state leave to care for their family members. The RUIA doesn’t provide family protections like the Massachusetts statute, but Gorton said Congress intended the federal law to pre-empt state sick leave laws in their entirety. He held that the Massachusetts law is unenforceable against railroads.

CSX, along with Amtrak and Springfield Terminal Railway Co., filed the lawsuit, seeking a court declaration that the RUIA pre-empts enforcement of the Massachusetts statute approved by voters in 2014. Massachusetts Attorney General Maura Healey opposed the employers’ complaint, as did several rail unions.

Railroad Act Blocks State Law

The RUIA provides unemployment benefits to railroad employees who can’t work because of sickness, injury, or pregnancy. A federal agency, the Railroad Retirement Board, pays employees if they miss work for more than four days.

Congress made “exclusive provision” for sickness benefits for railroad workers, according to the federal statute, which also states that railroad employees may not “have or assert” any right to “sickness benefits” under state law.

The railroads urged the court to rule the federal law precludes applying the Massachusetts sick leave benefit to rail employees. The employers also asked the court to declare that the RUIA pre-empts the state law to the extent it allows workers to use leave to care for their family members.

In 2017, the U.S. Court of Appeals for the First Circuit agreed with Gorton that the RUIA pre-empts enforcement of the Massachusetts sick leave law to sick or injured railroad workers, but it remanded the case to the judge to consider whether federal law also pre-empts the state from mandating railroads to allow employees to earn and use leave for the care of family members. Gorton resolved the question in favor of the railroads.

In enacting the RUIA, Congress sought a uniform national system of sick leave benefits to avoid having interstate railroads deal with different state laws, Gorton said. The court also said in using the phrase “sickness benefits” to describe state laws pre-empted by the RUIA, Congress chose to completely pre-empt the enforcement of state laws—like the Massachusetts Sick Leave Law—that allow rail employees to use their earned sick leave not only for themselves but also for the care of their family members.

Attorneys for the railroads declined to comment on the ruling. Attorneys representing the state didn’t immediately respond to a request for comment.

Jones Day represented the railroads. The Massachusetts Office of the Attorney General represented the state.

The case is CSX Transp., Inc. v. Healey, 2018 BL 286921, D. Mass., 15-12865-NMG, 8/10/18.

(Updated with additional reporting.)

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com